Energy Efficient Lighting Market Expected to Reach $370.4 Billion by 2027, at a Growing CAGR of 8.4% - Research DiveDownload Sample Reports Overview
The global energy efficient lighting market is valued at $370.4 billion by 2027, surging from $193.6 billion in 2019 at a noteworthy CAGR of 8.4%.
Impact Analysis of COVID-19 on the Energy Efficient Lighting Market
The global market for energy efficient lighting is predicted to experience a lower growth rate during the COVID-19 pandemic, due to the companies incurring losses during the lockdown. The pandemic that began from China took no time to spread to the other parts of the world. The government-imposed shutdown caused disruption in supply chain, as most of the vendors were dependent on China for electronics supply. This resulted in a delay in completion of smart projects that and fluctuation in prices of energy efficient lights.
On the other hand, research’s that are ongoing during the pandemic have found that UV-emitting LED lights can be used as a disinfectant at home or other spaces. For instance, on Aug, 2020, U.S. Food and Drug Administration announced that LEDs that emit UV rays can be used as disinfectants for nonporous surfaces, air, and water. This will increase the adoption of energy efficient lighting such as UV-LEDs and eventually bolster the market globally. These factors may lead to creating great opportunities for the investors during the forecast period.
Energy Efficient Lighting Market Analysis:
The enormous growth of the global energy efficient lighting market is mainly attributed to the increasing interest of people towards energy efficient lights. Moreover, growing awareness about lights that release less carbon and also government initiatives for energy efficiency are driving forces for the increase in adoption of energy efficient lights. In addition, key market players are following strategic alliances, business expansion and technological innovations to achieve a large share in the global industry. For instance, in July 2020, Savant Systems Inc., announced complete acquisition of GE Lighting and this acquisition will support the development of cost-effective, unique, and smart home solutions with intelligent lighting for its customers. Such offerings may lead to a surge in the demand for energy efficient lighting in the global market.
However, higher manufacturing costs may have a negative effect on global energy efficient lighting market. Furthermore, the price of energy efficient lighting is higher compared to other conventional incandescent lamps, which may obstruct the growth of the global market.
The global energy efficient lighting industry is growing extensively particularly in China, India, and Brazil. People are shifting towards smart technologies and this is further accelerating the growth of smart LEDs across the globe. Moreover, the adoption of lighting with low carbon release is predicted to bolster the growth of the market. Furthermore, significant energy efficient lighting providers are offering various technologies for more attractive and enhanced customer experiences. For instance, Philips on November 2019 announced the launch of Philips Smart Wi-Fi LED light bulb; these bulbs are easy to use and can be connected with Wi-Fi network. These lights can be controlled by mobile apps like Google assistant, Amazon Alexa and voice assistants including Siri. These factors may provide lucrative opportunities for the global energy efficient lighting market, in the coming years.
The light emitting diodes (LED) sub-segment of the energy efficient lighting market will have the fastest and a dominant growth and it is projected to surpass $169.6 billion by 2027, with an increase from $85.8 billion in 2019. There are many initiatives taken by governments to overcome the issues such as pollution, carbon emissions and so on. Therefore, governments across many nations are coming forward with their strategic steps to use LEDs in replacement of normal lights. All such factors will ultimately surge the growth of this segment, during the projected period.
Home sub-segment from application segment for the energy efficient lighting industry shall have the fastest growth and it is anticipated to generate a revenue of $115.0 billion by 2027, during the forecast period. There are many initiatives taken by governments to use energy efficient lights for home use and others. According to the US department of energy, suitable lighting options for home are compact fluorescent lamps (CFLs), halogen incandescent and light-emitting diodes (LEDs) will offer lucrative opportunities for the growth of this segment during the forecast timeframe.
However, the commercial sub-segment of the global market shall have the fastest growth and is projected to reach up to $142.1 billion by 2027, at 8.6% CAGR. Several government initiatives and their offerings of energy efficient lights will bolster the growth of sub-segment. For instance, according to the ENERGY EFFICIENCY & RENEWABLE ENERGY department, have provided different types of product categories of LED for commercial use such as commercial 2'x4' LED luminaires; all these LEDs are cost-effective and qualified by ENERGY STAR. All such factors may create massive opportunities for the segment, during the forecast timeframe.
The energy efficient lighting market for the North American region will dominate the global market. This market generated revenue of $68.3 billion in 2019 and is further projected to reach up to $119.6 billion by 2027. The demand for energy efficient lighting solutions is surging in the North America region, specifically because of the increasing adoption of LED lights in the region. Moreover, there are many energy-efficiency programs running in region that are projected to accelerate the growth of the market. For instance, The ENERGY STAR program was started by the US Department of Energy for promoting the of use energy-efficient lighting solutions for industries, homes, and buildings. Higher government support for ENERGY STAR programs has encouraged the adoption of ENERGY STAR certification products worldwide.
The Europe energy efficient lighting market shall have the fastest market growth and is anticipated to reach up to $118.0 billion by the end of 2027 since environmental and technical awareness among the European countries such as Spain, UK, Luxembourg, and Denmark is extensively increasing. According to the European Efficient Residential Lighting Initiative (ENERLIN), more than 14% electricity consumption in Europe is due to consumption of lights and inefficient lights can cause flow of unessential energy and carbon dioxide. Therefore, using CFLs (compact fluorescent lamp) in place of GLS (general lighting service) can save energy up to 11 TWh and cause 1.2 Mt of less emission of CO2 per annum. These initiatives may lead to creating a positive impact on the Asia-pacific energy efficient lighting market, during the forecast period.
Top Leading Energy Efficient Lighting Market Players include –
- General Electric
- Toshiba Corporation
- Schneider Electric
- Advanced Lighting Technologies Australia Inc.
- NICHIA CORPORATION
- Digital Lumens, Inc.
Porter’s Five Forces Analysis for Energy Efficient Lighting Market:
- Bargaining Power of Suppliers: The companies involved in the energy efficient lighting business are extensively high in number. Thus, the negotiation power of energy efficient lights provider decreases. So, there will be a lower threat from the supplier side. Thus, the bargaining power of the supplier is Moderate.
- Bargaining Power of Buyer: Buyers have a high bargaining power, primarily because of the huge number of energy efficient light providers. Therefore, the buyer can choose the service that best fits their preferences. The bargaining power of the buyer is High.
- Threat of New Entrants: The startups entering this market are providing advanced LEDs and bulbs to the customers. However, the switching cost of buyers is not prohibitively high. Thus, the bargaining power of the new entrant is Moderate.
- Threat of Substitutes: Low-cost lights are one of the substitutes available in this market. However, they are not convenient and energy efficient as compared to LEDs. Therefore, the threat of substitute is Low.
- Competitive Rivalry in the Market: The ventures operating in the global energy efficient lighting services are opting for various businesses development strategies to stronghold a position in the market. The key players of the market such as Philips are investing heavily to provide integrated services to the customers. Therefore the competitive rivalry in the market is High.