The LED lighting market was valued at USD 75.81 billion in 2020, and it is expected to reach USD 160.03 billion by 2026, at a CAGR of 14.25% over the forecast period 2021 - 2026. An estimated savings of USD 18 billion in electricity costs can be achieved by transitioning to energy-efficient LEDs. Furthermore, more than 160 million metric tons of carbon dioxide emissions can be avoided every year.
- Lighting accounts for nearly 10% of electricity usage in households and 18–40% of commercial premises. There is a growing need for energy saving across the world, which is creating scope for the market. It is expected that the transition to energy-efficient lighting would reduce the global electricity demand for lighting by 30-40% in 2030.
- Countries across the world are widely adopting LED lighting. For instance, New York planned to replace 250,000 streetlights with LEDs, which was to be followed by the replacement of decorative lights in the urban areas. Barcelona (Spain) deployed more than 3,000 smart streetlights based on LED technology, which gathers information about pollution, humidity, noise, and the overall environment.
- Moreover, the US Department of Energy (DOE) anticipated that, by 2020, more than 75% of the outdoor luminaire shipments would be light-emitting diodes (LEDs). Moreover, assuming the efficacy of LED luminaires surges an additional 50% over current levels by 2020.
- The growing consumer awareness about the environment and the durability of these lights and the government mandates for energy efficiency are the drivers for the growing adoption of LEDs. For instance, as part of its green initiatives, the Chennai Airport bought six sets of LED base lights for disaster relief to make its lights and fixtures energy-friendly.
- Smart lighting is expected to be the future of LED lighting, with various companies, like Philips, Magiclight, and Xiaomi, investing in the technology. Philips is one of the market leaders with its product, Philips Hue, which can be integrated with voice assistants.
Key Market Trends
Commercial Segment Expected to Witness Significant Growth Rate
- In the current market scenario, LED light bulbs are enduring the early adoption phase of the product life cycle. However, continued technological advancement in LED lighting poised these product offerings to enter and advance through the growth phase.
- Recent advancements in light-emitting diode technology have allowed LED lighting products to penetrate the commercial lighting market, with enormous potential for growth. Commercial buildings, including offices, stores, restaurants, hospitals, and schools, account for almost twenty percent of the United States’ total energy consumption, and thirty-eight percent of this energy consumption is attributed to lighting.
- In addition, major American manufacturers are actively developing the LED lighting business with the rising LED lighting penetration rate. LED commercial lighting demand is strong in the US market, among which demand for Troffer, panel lights, tunnel lights, and high bay lights grows fastest, and they begin to develop towards intelligence and optical communications and other new application areas.
- For instance, Technical Consumer Products Inc. offers its selectable commercial recessed downlight that comes with choices for color temperatures and wattages, making these adaptable for many corporate settings.
- Overall, the rapid urbanization and the increasing construction activities in the commercial sectors of different countries are expected to fuel the studied market demand in the foreseen period. However, with the onset of the COVID-19 pandemic, the short-term forecast indicates a decline in demand as several commercial constructions halted temporarily.
Latin America is Expected to Occupy Significant Market Share
- In Latin America, nearly 80% of the total population resides in urban areas, which is expected to rise during the forecast period. By the end of 2045, urban dwellers are estimated to increase by two billion globally. Thus, in such a scenario, it becomes essential for countries to use energy more efficiently and fuel the market's growth.
- The growth of the LED lighting market in the region can be attributed to the declining manufacturing cost of LEDs and the increasing demand for energy-efficient and sustainable lighting. For instance, Brazil, which used to export LEDs, has now set up many manufacturing facilities to accelerate its adoption in commercial, industrial, and government public sectors.
- Moreover, the Brazilian government issued a decree to replace incandescent bulbs with LED lighting products used in various road lighting and tunnel lighting. Also, healthy economic growth, robust industrialization, and urbanization tend to be some of the market's macroeconomic factors.
- Furthermore, growing awareness over the importance of energy efficiency, coupled with the regional government mandates to set higher standards for more energy efficiency and continuous innovations in LED technology by the leading manufacturers, is a significant factor driving the growth of the market in the region.
- Buildings are among the largest consumers of electricity worldwide. However, according to estimates, 80% of the energy efficiency potential of the buildings is not utilized. For instance, Rio de Janeiro consumes 60% more public lighting energy than New York City.
The LED lighting market is fragmented due to many regional and international players across the world like Heliospectra AB, Dialight PLC, Eaton Corporation, General Electric Company (Savant Systems Inc.), and OSRAM GmbH. With a prominent share in the market, these major players are focusing on expanding their customer base across foreign countries. These companies are leveraging strategic collaborative initiatives to increase their market share and increase their profitability. However, with technological advancements and product innovations, mid-size to smaller companies are increasing their market presence by securing new contracts and by tapping new markets.
- June 2021- Syska announced the launch of new LED Lights under the ‘T5 LED Batten’ brand in India for only Rs 449 and Rs 549. Syska T5 LED Batten (PC) and Syska T5 LED Batten (AL) LED has surged the protection of 4KV and are installed with 440V OVP(Over Voltage protection).
- The market estimate (ME) sheet in Excel format
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1.2 Scope of the Study
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Buyers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Industry Value Chain/Supply Chain Analysis
4.4 Market Drivers
4.4.1 Declining Prices of LED Products
4.4.2 Increase in Need for Energy-efficient Lighting Systems
4.5 Market Restraints
4.5.1 High Initial Investment
4.5.2 Development of Alternative Technologies
5.1.1 Commercial Offices
5.1.5 Highway and Roadway
5.1.7 Public Places
5.2 Product Type
5.3 Distribution Channel
5.3.1 Direct Sales
5.3.2 Wholesale Retail
5.4.1 North America
184.108.40.206 United States
220.127.116.11 United Kingdom
18.104.22.168 Rest of Europe
5.4.3 Asia Pacific
22.214.171.124 Rest of Asia Pacific
5.4.4 Latin America
5.4.5 Middle East and Africa
6.1.1 Heliospectra AB
6.1.2 Dialight PLC
6.1.3 Nichia Corporation
6.1.4 Savant Systems Inc.
6.1.5 OSRAM GmbH
6.1.6 Signify NV (Philips Lighting)
6.1.7 Panasonic Corporation
6.1.8 Acuity Brands Inc.
6.1.9 Hubbell Incorporated
A selection of companies mentioned in this report includes:
- Heliospectra AB
- Dialight PLC
- Nichia Corporation
- Savant Systems Inc.
- OSRAM GmbH
- Signify NV (Philips Lighting)
- Panasonic Corporation
- Acuity Brands Inc.
- Hubbell Incorporated