Another year has slipped by and what a doozy it has been: geopolitical issues impacting the global supply chain as well as escalating prices on transportation, manufacturing, and compliance testing—all while factory salaries and profit levels have taken a hit with out-of-control inflation. It should come as no surprise that a safety evaluation on a single luminaire has increased over 1,300% since 1970, from an average of $400 per unit to currently fluctuating around $6,000 per unit—with some prices approaching $10,000 for a wet-location product.
Let’s dissect how the lighting industry silently ended up with such exorbitant compliance testing pricing and what, if anything, can be done about the cost increases. While many details could be covered in the last 55 years, I will focus on a birds-eye view of strategic events that led to price increases.
The story begins in 1871, when Chicago, a bustling metropolis of commerce, caught fire and resulted in the death of more than 300 people and the destruction of over 17,000 structures. The structures at that time were primarily constructed of wood, so when the fire started, it didn’t take long to burn uncontrollably.
Chicago was rebuilt, and in 1893, it hosted the World’s Colombian Exposition (also known as the Chicago World’s Fair) and highlighted a “Palace of Electricity,” which showcased commercial uses for electricity. Based on the previous disaster in Chicago, an engineer from Boston, William Henry Merrill, was hired by the exposition’s insurance companies to examine the electrical wiring, which was prone to catching fire during the exhibition. Merrill would eventually go on to found Underwriters Laboratories (UL) in 1903, a firm dedicated to “Testing for Public Safety.”
“We as an industry must be vocal this year in asking all members of the compliance industry, including governmental agencies, to trim the fat from significantly increased costs”
Around the same time, in 1896, The National Fire Protection Association (NFPA) was formed to evaluate and standardize fire sprinkler standards. Both the NFPA and UL had a symbiotic relationship where the NFPA would publish the National Electrical Code and train municipal electrical inspectors and electrical contractors on safe electrical installations. UL assumed the task of conducting research on building materials and went on to publish many safety standards that were used to evaluate and create a list of products approved for use in buildings.
Many of the technical committees of the NFPA and UL shared members, and the voluntary system of product compliance began and worked quite well in mitigating losses of life, personal injury, and property destruction. Municipalities recognized the work done by NFPA and started to legislate building codes that required products to be UL listed for purpose and installed by qualified personnel where the installation was inspected for compliance to the NEC.
Fast forward to the mid 1970s, when the workload at UL increased substantially leading many electrical manufacturers to claim that UL delayed projects and had become a monopoly, which violated U.S. Federal antitrust laws. A lawsuit was brought to Federal court by Maryland Electrical Laboratories (MET Labs) in Baltimore that claimed that many other laboratories were qualified to test electrical products and that the system should establish a way for other independent laboratories to conduct the testing to UL safety standards. MET Labs won the court battle, and shortly thereafter, the Occupational Safety and Health Administration (OSHA) was tasked with creating and administrating the National Recognized Testing Laboratories (NRTL) program that is in use today. Currently, there are more than 19 NRTLs recognized by OSHA for various products.
Early on, OSHA, which was originally created to ensure that employers maintain a safe environment for employees, was going to also evaluate laboratories that performed product certifications to be designated an NRTL. While the NRTL program opened the door for competing laboratories, the cost of the OSHA evaluations and yearly follow-up inspections was to be borne by the manufacturers. Also, a division of UL still publishes, creates, and bears the cost of most of the safety standards used by NRTLs.
OSHA initially used ISO Guide 25, created by the European International Electrotechnical Commission as a standard for evaluating safety laboratories as a comparable standard did not exist in the U.S. ISO Guide 25 was then replaced with ISO/IEC 17025 and ISO/IEC 17065, which introduced NRTL safety laboratories and American manufacturers to formalized quality standards. Not only did the NRTLs have to be audited yearly by OSHA, but any laboratory used to test a product to a UL safety standard was also required to be audited for compliance to ISO/IEC 17025. Keep in mind that monitoring of any system ensures the integrity of the system, but when surveillance continues to evolve over time, there must be a point where a reduction of surveillance can be accomplished without effecting overall integrity.
The original idea of creating competition for UL has resulted in many more options for manufacturers. Governmental oversight, however, has resulted in a substantial increase in testing and yearly recurring fees—all of which are now negatively impacting lighting manufacturers. The lighting industry relies on small high-tech companies to incubate and innovate new directions, and the high sustaining fees will reduce the ability of newcomers to enter our market.
We as an industry must be vocal this year in asking all members of the compliance industry, including governmental agencies, to trim the fat from significantly increased costs by reducing actions that do not reflect keeping the public-at-large safe. Safety compliance to published standards is a good thing, but while following this path, we should not stymie our future innovators.
Jerry Plank, LC, is the CEO/founder of Wilger Testing, an accredited third-party laboratory testing for product safety and performance.