The Global Smart Lighting Market is Poised for Growth

Published on 27 Jul, 2017

Smart Lighting Market Analysis

Factors such as government subsidies, growing demand for energy-efficiency, as well as next generation intelligent utility and facilities management solutions will drive the smart lighting market.

Smart lighting refers to an ecosystem of efficient luminaires, lighting control systems, sensors, and microcontrollers, among others. Lighting control systems use factors such as occupancy, available daylight, and time of day to turn lights on or off, thus providing noteworthy energy and cost savings.

Smart lighting technology is utilized for area-specific lighting. It works by calculating and managing the need for light in a particular area. End users can control cost and eliminate lighting wastage by managing the system via connected devices.

With the advent of smart cities, smart buildings, as well as concepts such as the Internet of Things (IOT) and connected devices, there has been a resultant increase in the adoption of smart lighting solutions.

Energy Conservation and Government Initiatives are Key Growth Drivers for Smart Lighting

The global market for smart lighting solutions, currently valued at USD 2.1 billion, is expected to grow at a CAGR of 22% to USD 8.5 billion by 2023.

This market is expected to grow exponentially due to the rapidly growing demand for energy conservation. The drive among governments to conserve energy would spur the deployment of adaptive street lighting, further boosting the use of LEDs and other components of the smart lighting ecosystem.

Greater investment in smart homes and cities would expand the addressable market for smart lighting. Meanwhile, upcoming IOT-based home energy management architecture is integrating smart lighting to deliver a complete offering in smart homes.

Industries and commercial spaces have already realized the long-term economic and environmental benefits of using smart lighting, thus reducing power bills and also their carbon footprint. When coupled with cloud computing, smart lighting systems provide facility managers the means to control energy usage across hundreds of buildings through a single tablet. A portfolio of building lighting control systems would generate large amounts of data, which, when properly analyzed, can be used to automatically evaluate and diagnose several issues and assist in optimizing energy usage.

According to Juergen Sturm, Secretary General Lighting Europe Association, “Smart lighting is becoming part of integrated solutions which will enhance our daily life. These solutions will not only contribute to better lighting quality and energy efficiency within buildings, but will impact on the use of our built environment. Intelligent integration of indoor and outdoor lighting systems will contribute to safer, more aesthetic and energy efficient cities. New applications in health care, urban horticulture, education and workplaces will re-define lighting as we know it today and will become an integral factor in addressing the challenges of our societies.”

Emerging Markets to Follow Their Developed Counterparts in Adoption of Smart Lighting Solutions

The penetration of smart lighting was highest in European regions, followed by North America, driven by factors such as greater awareness, government regulations, and higher disposable income.

Emerging markets such as China, India, and South Africa among Asia-Pacific (APAC) regions and the rest of the world (RoW) are projected to show the highest growth in the forecast period. Stricter laws and efforts to lower energy costs are factors expected to drive the market in APAC and RoW. These countries have started by incorporating a part of the smart lighting ecosystem (LED lamps), intending to integrate better into the ecosystem in the future.

Government-led initiatives to spur the adoption of LEDs in public lighting systems along with increased use in industrial and residential sectors have resulted in greater demand for LEDs. For example, India heavily subsidizes LED lamps for retail to encourage the adoption of LED lighting. Most major cities in the country have LED-lit streets.

Countries including China, South Korea, Thailand, and Philippines are drafting regulations to ban incandescent light bulbs, replacing them with LED to conserve energy and adopt sustainable lighting solutions.

Despite its Nascent Stage, there’s Intense Competition in the Smart Lighting Industry

The current market for smart lighting is served by multiple players worldwide, including Koninklijke Philips, Osram Licht AG, General Electric Company, Acuity Brands Lighting, Inc., AMS, Daintree Networks, Echelon Corporation, and Hubbell Lighting Inc.

Leading players such as Philips and Osram offer end-to-end smart lighting solutions, and provide solutions to several smart cities across the world, e.g., Semarang, Indonesia and Los Angeles, USA. These players are now collaborating with governments and municipalities to set up connected lighting solutions to cut utility costs and improve lighting conditions.

Along with public projects, leading companies are now collaborating with real estate developers to offer smart lighting as an integral part of smart homes.

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