LED Lighting Market by Size, Share, Market Growth & Industry
[271 Pages Report] The global LED lighting market is projected to grow from USD 78.9 billion in 2024 to USD 118.4 billion by 2029, registering a CAGR of 8.5% during the forecast period. The LED lighting market is driven by a confluence of factors and trends. Energy efficiency remains a paramount driver, with LED technology offering substantial reductions in energy consumption compared to traditional lighting sources. Environmental sustainability is a key trend, influencing consumers and businesses to choose LED lighting for its lower carbon footprint and absence of hazardous materials. Technological advancements, coupled with decreasing production costs, enhance the affordability and versatility of LED lighting solutions, driving market growth.
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Market Dynamics:
Driver: Favourable government initiatives and regulations for energy efficient LED lighting solutions across the world
Governments worldwide are increasingly recognizing the importance of energy efficiency and sustainability, leading to the implementation of favorable regulations that promote the adoption of LED lighting solutions. These regulations are designed to drive the transition from traditional lighting technologies to more energy-efficient and environmentally friendly alternatives.
According to US Department of Energy, the use of energy-efficient lighting technological products such as ENERGY STAR rated residential LEDs tend to use 75% lesser energy and tend to last 25 times longer than incandescent lighting solutions used in the country. As per the department of energy’s forecast, By the year 2035, it is expected that the predominant choice for lighting installations will be LED technology. The energy efficiency gains from widespread LED lighting adoption could reach an impressive 569 terawatt-hours annually by 2035. This amount is equivalent to the yearly energy output of over 92 power plants each generating 1,000 megawatts. This projection underscores the significant impact and growing prevalence of LED lighting in the global energy landscape.
In June 2023, the Biden-Harris Administration, in collaboration with the U.S. Department of Energy (DOE), has unveiled the initial group of recipients for the Renew America’s Schools grant program. This competitive initiative aims to facilitate energy enhancements in K–12 schools nationwide. A total of 24 Local Education Agencies (LEAs) in 22 states have been selected to collectively receive approximately $178 million in funding. This financial support will empower these educational entities to undertake a range of projects focused on reducing energy expenditures, minimizing emissions, and fostering the development of healthier, safer, and more conducive learning environments within their respective schools. This grant includes the funding for setting up of newer LED lighting solutions as an alternative to traditional energy-consuming lighting products.
Also, government offers various benefits for adopting LED lighting solutions instead of traditional lighting solutions. Numerous governments provide financial incentives in the form of rebates for both individuals and businesses undertaking the installation of energy-efficient lighting solutions. These rebates serve as a means to alleviate the upfront expenses associated with acquiring energy-efficient bulbs, thus rendering the transition to such lighting options more economically viable. Also, in certain nations, governmental authorities extend tax incentives to encourage the adoption of energy-efficient lighting systems. These incentives manifest as tax credits or deductions, enabling individuals and businesses to retain a greater portion of their financial resources while contributing to environmental conservation. By leveraging these tax incentives, users not only benefit from cost savings but also actively participate in initiatives aimed at promoting sustainable practices and reducing overall energy consumption.
Restraint: Functional problems associated with LED technology
While LED (Light Emitting Diode) technology offers numerous advantages, there are some functional problems and challenges associated with it. Generally, LEDs produce heat, and if not managed effectively, it can affect their performance and lifespan. Overheating leads to color shifting, reduced brightness, and a shorter overall lifespan. Adequate heat sinks and thermal management systems are crucial to mitigate this issue. Achieving consistent color across different LED products and over time can be a challenge. Variations in color temperature and color rendering occur, impacting the quality of lighting and making it difficult to match colors accurately, especially in commercial or industrial applications.
?While LED technology has made significant strides in improving color rendering, some LEDs still struggle to accurately represent certain colors, affecting the overall quality of illumination. Thus, Color Rendering Index (CRI) issues are there to be solved. Advances in phosphor technology and color-mixing techniques aim to address this challenge. Also, LED drivers, which convert AC power to the DC power required for LEDs, introduce power quality issues such as harmonics and electromagnetic interference (EMI). These issues may impact the performance of other electronic devices sharing the same power supply. Thus, power quality issues are also there.
Opportunity: Rising adoption of LED lighting in horticulture sector
The use of LED lighting in horticulture has gained significant traction as a cutting-edge technology that offers numerous benefits to enhance plant growth and optimize crop yields. LED lighting is employed in controlled environment agriculture (CEA) systems, such as greenhouses and vertical farms, to provide artificial light that complements or replaces natural sunlight. LED lighting allows precise control over the light spectrum, enabling farmers to tailor the wavelengths emitted by the LEDs to meet the specific needs of different crops at various growth stages. This spectral control influences factors such as flowering, fruiting, and overall plant development. From the energy efficiency perspective, LED lights are highly energy-efficient, converting a larger proportion of energy into usable light for plants. This efficiency results in reduced energy consumption compared to traditional lighting sources, making LED lighting a sustainable and cost-effective choice for indoor farming operations.
With LED technology, growers can create customized light recipes by adjusting the intensity and spectrum of light. This level of customization allows for the optimization of plant characteristics, such as taste, texture, color, and nutritional content, catering to specific market preferences. LED lighting enables year-round cultivation independent of natural sunlight conditions. This is especially valuable in regions with extreme climates or limited sunlight hours during certain seasons, as it ensures a consistent and reliable environment for plant growth.
Challenge: Lack of common open standards for LED lighting
The lack of common open standards for LED lights is a notable challenge in the LED lighting industry. Common open standards play a crucial role in ensuring interoperability, compatibility, and seamless communication among different devices and systems. The absence of standardized communication protocols results in interoperability challenges. Different manufacturers adopt proprietary protocols, making it difficult for LED lighting products from different vendors to work together seamlessly. This limits the choices available to consumers and creates complexities in building automation systems. Also, proprietary protocols and closed systems lead to vendor lock-in, where consumers become dependent on a specific manufacturer's products and technologies. This lack of flexibility hinders innovation and limits consumers' ability to choose the best solutions for their needs.
Building automation systems often involves the integration of various devices and systems, including lighting, HVAC, security, and more. Without common open standards, integrating LED lighting with other building automation components becomes more complex and costly. Common open standards enable plug-and-play functionality, allowing devices to work together seamlessly without extensive configuration. The absence of such standards requires more manual configuration and troubleshooting during installation and integration processes. Also, smart lighting solutions often rely on standardized communication protocols for effective control and automation. The lack of common open standards slows down the adoption of smart lighting systems as consumers and businesses hesitate to invest in technologies that are not interoperable or future-proof.
LED lighting Market Ecosystem
Key companies in this market include well-established, financially stable providers of LED lighting products. These companies have been operating in the market for several years and possess a diversified portfolio of LED lighting which caters to a wide range of applications. Prominent companies in this market include Signify Holding (Netherlands), Acuity Brands, Inc. (US), Cree Lighting USA LLC (US), ams OSRAM AG (Germany), LG Electronics (South Korea), Dialight (UK), Panasonic Corporation (Japan), Hubbell (US), Savant Systems, Inc. (US), and Zumtobel Group (Germany).
By Application, outdoor segment likely to exhibit the highest CAGR during the forecast period
The outdoor application segment is poised to register the highest CAGR in the LED lighting market due to a surge in urbanization, infrastructure development, and a growing emphasis on outdoor illumination. Governments worldwide are investing in smart city initiatives, and the need for energy-efficient, durable, and environmentally friendly outdoor lighting solutions is escalating. LEDs, with their adaptability to various outdoor environments, longer lifespan, and lower energy consumption, are becoming the preferred choice for street lighting, architectural lighting, and landscape illumination. Additionally, the increasing demand for enhanced security and safety measures in outdoor spaces further propels the adoption of LED lighting.
By sales channel, retail is expected to account for largest share between 2024 and 2029.
The retail/wholesale segment is poised to dominate the market share from 2024 to 2029, emerging as the favored choice among consumers. The prevalence of numerous retail outlets, coupled with the inherent benefits of this option, including superior product quality, on-site verification, and immediate product availability, contributes significantly to the segment's expansion. Products are distributed through retailers, dealers, and affiliates within the retail or wholesale category. Typically, these channel partners boast a well-established local presence, enabling cost-effective customer reach in their respective markets.
By product, luminaire segment to exhibit highest CAGR from 2024 to 2029
The luminaire product segment is anticipated to exhibit the highest growth rate owing to a confluence of factors driving its demand. Luminaire products, encompassing a variety of lighting fixtures, are integral to modern lighting solutions across residential, commercial, and industrial settings. The increasing emphasis on energy efficiency and sustainability in lighting solutions has spurred the adoption of advanced luminaire products, particularly those incorporating LED technology. Technological innovations, such as smart and connected luminaires, are gaining traction, further boosting the growth of this segment. The flexibility, design versatility, and adaptability of luminaires to diverse lighting requirements contribute to their escalating popularity.
Asia Pacific region is projected to experience the highest growth in the overall LED lighting market during the forecast period
LED Lighting Market by Region
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The LED lighting market in India is projected to experience the most significant CAGR from 2024 to 2029. In recent years, LED lighting has emerged as the predominant form of artificial illumination, surpassing traditional lighting options including incandescent bulbs, compact fluorescent lamps (CFLs), fluorescent lamps, high-pressure sodium lamps, and metal halide lamps within the country. LED bulbs and luminaires dominate nearly all lighting applications, including offices, retail stores, hospitality facilities, industrial plants, roads, and now even in sports complexes. The country has witnessed a disruptive change, making conventional lighting sources obsolete, and due to this reason, India is likely to witness tremendous growth in the LED lighting market in the coming years.
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Key Market Players
Signify Holding (Netherlands), Acuity Brands, Inc. (US), Cree Lighting USA LLC (US), ams OSRAM AG (Germany), LG Electronics (South Korea), Dialight (UK), Panasonic Corporation (Japan), Hubbell (US), Savant Systems, Inc. (US), and Zumtobel Group (Germany) are the major companies in the LED lighting companies.
Scope of the Report
Report Metric
Details
Market Size Available for Years
2020–2029
Base Year Considered
2023
Forecast Period
2024–2029
Forecast Units
Value (USD Million/Billion)
Segments Covered
Product Type, Application, Installation, Sales Channel, and Region
Geographies Covered
Asia Pacific, North America, Europe, Middle East, Africa, and South America
Key Companies Covered
Signify Holding (Netherlands), Acuity Brands, Inc.(US), Cree Lighting USA LLC (US), ams-OSRAM AG (Austria), LG Electronics (South Korea), Dialight (UK), Panasonic Corporation (Japan), Hubbell (US), Zumtobel Group (Germany), Savant Systems, Inc. (US)
LED Lighting Market Highlights
In this report, the LED Lighting Market has been segmented into the following categories:
Segment
Subsegment
By Product Type:
By Application:
By Installation:
By Sales Channel:
By Region: