The global 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.
Light-emitting diodes (LEDs) are gradually taking over the global lighting market. While in 2019, almost half of all light sources in the world were LEDs, it is projected that by 2030, some 87% of all light sources will be LEDs.
The LED lighting market size is estimated to be USD 75.3 billion in 2022. It is projected to reach USD 124.7 billion by 2027, at a CAGR of 10.6% from 2022 to 2027.
Competitive manufacturing costs, high economic growth rates, and large-scale industrial constructions in residential and commercial segments are some of the other major factors driving the growth of the LED lighting market.
The US LED market was valued at USD 8.58 billion in 2020, and it is expected to reach a value of USD 15.23 billion by 2026, registering a CAGR of 9.85% over the forecast period (2021-2026).
The U.S. LED market is growing at an increasing rate. The LED lighting business is experiencing rapid growth thanks to the growing penetration of LEDs in American homes and the demand for commercial lighting.
It is estimated that US$18 billion in electricity costs can be saved annually by switching to energy-efficient LEDs. By 2030, it is estimated that energy-efficient lighting will reduce the global electricity demand for lighting by 30-40%.
In the United States, LED light installations are forecast to increase from 1.4 billion units in 2017 to 7.9 billion units in 2035.
Around 15% of the world's electricity is used for lighting. Additionally, lights contribute about 5% to global carbon emissions.
LED bulbs typically use 50% less energy than traditional incandescent, fluorescent, or halogen bulbs. Electricity costs can be reduced by USD 18 billion per year by using energy-efficient LEDs. As a result, more than 160 million tonnes of carbon dioxide emissions can be avoided annually.
Due to their absence of filaments and enclosures, LEDs are strong, break-resistant, and highly resistant to vibrations and other impacts.
In contrast to incandescent bulbs, LEDs keep working for a long time and last much longer than bulbs that burn out over time. LEDs have a lifespan of 50,000 to 100,000 hours or more. By comparison, an incandescent bulb only lives about 1-5% as long (about 1,200 hours).
By 2050, the cost of one kilolumen should drop to around 0.3 U.S. dollars from around 0.7 in 2017. The price forecasts for warm and cool white LED lamps are even more optimistic, with discounts projected to 0.33 U.S. dollars per kilolumen in 2035.
The result is significant energy cost savings, especially in places where light bulbs are left on indefinitely.
LEDs are currently among the most effective lighting sources and are expected to become the industry standard within a few years. By 2030, it is estimated that energy-efficient lighting will reduce the global electricity demand for lighting by 30-40%.
To reduce carbon emissions, the UN Environment Programme (UNEP) has published guidelines for energy-efficient lighting solutions. In cities that are growing rapidly and where economic growth is rising, LED lighting demand is expected to rise.
A study of industrial and commercial LED lighting trends suggests that Asia Pacific is set to hold the largest market share in terms of industrial and commercial LED lighting.
The LED lighting market in Latin America, Africa, and the Middle East (LAMEA) is expected to grow the fastest over the forecast period, as it is in its introductory phase of LED adoption.
LEDs are expected to be the most popular light source in all sectors by 2025, with 93% of outdoor lighting being LED. Public lighting projects that use a smart light pole will be a popular choice for governments across the globe.
Smart LED lighting systems are connected to other electronic devices and can be controlled remotely. They are becoming increasingly popular as more and more features for smart homes are implemented in common households.
Residential LEDs are predicted to grow in North America between 2019 and 2024. The market is expected to grow from about 40 million U.S. dollars in 2019 to around 48 million U.S. dollars in 2024.
Between 2020 and 2035, LED lights are predicted to gain popularity in the United States, particularly for outdoor applications.
The North America Street Lighting market is expected to register a CAGR of 9.4% during the period 2022-2027. The primary factor driving North America's street lighting market growth is the growing adoption of LED lighting for energy-efficient lighting systems, increasing awareness regarding low power consumption, and the rising adoption of smart cities in North America.
The U.S. government takes various initiatives to implement innovative street light solutions in smart cities, growing the demand for street lighting in the region. For instance, Barcelona, Los Angeles, and San Jose have recently stepped into evolving the connected smart city by implementing Philips SmartPole pilots.
The SmartPole initiative provides the City of San Jose with more energy conservation, reduced expenditures on energy and maintenance, implementation of LED lighting on dark city streets, and an enhanced broadband experience for the residents in the city.
One of the major factors driving LED market growth in North America is the country's strict energy consumption regulations. Governments are playing a major role in smart cities by regulating and fostering the deployment of smart lights in their infrastructure.
Smart lighting is key to meeting sustainable development challenges on an industrial and commercial scale. The market size for smart cities was $517.63 billion in 2017 and is expected to reach $2,402.12 billion by 2025, registering a CAGR of 21.28% from 2018 to 2025.
In the next two decades, smart lighting demand is expected to increase due to
LEDs are approximately 90% more energy-efficient than fluorescent and incandescent bulbs. Since LEDs convert 95% of their energy to light and only 5% into heat, they are more energy-efficient than traditional lighting.
The bulbs in conventional lighting use a lot of energy and are filled with multiple coatings and gases. LEDs, however, convert electricity directly into light energy, so they consume less power and are more dependable. This is one of the main reasons why LEDs are replacing traditional lighting.
LEDs are also high in demand due to their small size, compact design, and durability.
Smart street lighting can help cities monitor the environment, increase public and traffic safety, upgrade connectivity as WiFi hotspots, and deliver location-based services like smart parking and smart navigation.
The installation of outdoor LEDs will see a substantial rise in the next 15 years. Most outdoor lights will be replaced by LEDs by 2035.
COVID-19 disrupted the supply chain and slowed production in the LED lighting market. Thus, industrial output growth decreased, as did light manufacturing output across significant manufacturing hubs.
Some of the majorly affected areas include:
Around the world, construction work was halted or delayed because of the pandemic. Within the United States, 30 states declared construction activities essential, and 45 restricted work due to the pandemic caused by COVID-19.
As new LED installations are made in new buildings, this negatively affects the market. (Pages 15-16)
LEDs are built from compound semiconductor materials (also known as III-V materials). These include chemical materials, such as gallium arsenide (GaAs) and gallium phosphide (GaP), produced by the chemical industry.
As you may know, there was a supply shortage during the lockdown. This created inflation in the price of these chemicals, consequently increasing the price of LEDs.
Lumileds, for example, has announced that the prices of their LED lights will increase by 4% in April 2020 to offset costs incurred during the pandemic. (Pages 15-16)
LED lighting adoption would see a decline if vendors continue to raise prices on LED lighting products.
The healthcare sector, however, played a huge role in the purchase of new LED products over the past few years. The LED lights sold during the pandemic were predominantly in healthcare sectors, specifically hospitals, and some companies have shifted to manufacturing LEDs specifically for hospitals. (Pages 15-16)
The healthcare sector saw an increase in demand for LED lighting due to
BrightShot, one of the leading vendors of LED lighting solutions, has changed its manufacturing approach and now offers COVID-19 decontamination products. Keeping indoor environments safe from COVID-19 contamination, BriteShot's air filtration system AirAffair and decontamination tent help prevent infection in indoor environments.
Lighting accounts for roughly 10% of household electricity consumption and 18-40% of commercial electricity consumption. Smart lighting is expected to be the future of LED lighting.
As reported by Markets and Marketers, shutdowns causing a loss in production have considerably hurt the market for smart lighting hardware. In 2020, the global market for smart lighting is estimated to grow from USD 9.4 billion and reach USD 24.2 billion by 2025, growing at a CAGR of 20.9%.
The projection for 2025 is projected to be 21% lower than the pre-Covid-19 estimation.
Nevertheless, the availability of the Covid-19 vaccine and the decline in infection rates expected in 2021 is anticipated to redirect the market back to growth as businesses reopen.
The lighting industry has experienced an evolution of various technological trends over the last few years.
Almost everything is now wireless and compact. Wireless trends have also been adopted by the lighting industry, especially in the retrofitting of homes.
Retrofitting means updating a building's old systems to improve its energy efficiency. It saves energy and lowers costs since it reduces energy consumption.
Additionally, there are systems based on radio frequency, such as power-line communication. These transmit and receive data via power lines. Wired lighting systems are being replaced by wireless lighting technology. All controls can be controlled this way without the use of cables.
The Internet of Things not only connects smartphones and computers to the internet, but also connects things like appliances, lighting fixtures, and even entertainment systems.
Smartphones can now be used to remotely control lighting fixtures. It is now possible to switch on and off lights remotely from any smartphone or computer connected to the inbuilt sensors.
LED bulbs are now available with technology that converts power into light by converting the main electricity source. Modern lighting energy technologies offer many benefits and are widely available.
The primary source of power for lighting today is LED chips. Many firms have adopted other lighting technologies that have made LED drivers obsolete.
The latest development in lighting technology is lighting powered by Ethernet, which provides electricity through data cables.
WiFi's next evolution is LiFi, where data is transmitted by lighting sources. Both the Internet and the lighting industry will be changed by this lighting technology. Consequently, this innovative technology will have a positive effect on almost every aspect of our lives.
There is no doubt that LiFi will improve workflow across many industries. Using this revolutionary technology, data can be transmitted at high speeds in a secure, safe, and private setting. In short, all the major industries are likely to benefit one way or another from LiFi.
Researchers have studied the concept of the effect of color on mood. The wavelength, color, and temperature of light are known to influence the mood and productivity of an individual.
This trend will lead to more interest in health-oriented lighting in the coming year. Healthy lighting technology is combined with LEDs to produce an extraordinary lighting effect. Healthy light technology is being used in hospitals to calm patients during intensive surgery and to promote a faster recovery period.
The market for LED lighting in the US is highly competitive, and the top five companies account for the majority of market revenue.
The key players use new product developments, improvements in existing product lines, and mergers and acquisitions to maintain their share of the market.
Located in Ferguson, Missouri, Emerson Electric Co. is an American multinational corporation. The company has approximately 83,500 employees and 200 manufacturing locations worldwide.
The net sales of Emerson were generally fluctuating from 2012 to 2019. Emerson reported a lower-than-expected decrease in net sales for the fiscal year of 2020, with sales just under 16.8 billion dollars.
Signify (formerly known as Philips Lighting) provides smart light solutions and is one of the top companies using IoT for LED lighting features.
Signify generated the majority of its revenue in the United States as of 2020. In the last year, Signify generated more than two billion euros in revenue from the U.S., compared with 517 and 395 million euros from Germany and the Netherlands, respectively.
In May 2022, Signify acquired Fluence from ams OSRAM.
Founded in Munich, Germany, Osram Licht AG is a global lighting company. It uses the brand name Sylviana for many of its products in the US market.
In terms of revenue, Osram OS ranked first among global automotive LED suppliers in 2020. The company generated revenue of about 926 million dollars.
In March 2022, ams OSRAM Agreed to sell its independent and dedicated Automotive Lighting Systems GmBH systems to Platic Omnium.
Nichia is the world’s largest supplier of LEDs. They design, manufacture, and market LEDs for use in display, LCD backlighting, automotive applications, and general lighting. Throughout Nichia's history, it has made some notable discoveries regarding white LEDs.
With a revenue of 608 million U.S. dollars in 2020, Nichia ranked second among global automotive LED suppliers.
Acuity Brands is a market-leading industrial technology company that provides lighting products, controls, software, and services. The company is the leader in North America for lighting solutions both indoors and outdoors and one of the top lighting companies in the world.
In the 2020 fiscal year, Acuity Brands reported a net income of approximately 248.3 million U.S. dollars, a decrease of almost 25 % from the previous year.
LED Lighting Market by Installation (2022- 2027)
