Significant Growth in Lighting as a Service Market

  • Convergence of Internet of Things (IoT) in lighting systems to drive the lighting as a service market.
  • Commercial Segment is Expected to Lead the Lighting as a Service Industry.
  • North America will be the leading market for lighting as a service.

The global lighting as a service market is projected to grow at a CAGR of 46.3% from 2016 to 2021, to reach a market size of $638.7 million by 2021. The global market is witnessing significant growth on account of the increase in demand for energy efficient lighting systems, and government policies supporting adoption of energy efficient lighting systems over traditional lighting. Increasing convergence of Internet of Things (IoT) with lighting is also expected to drive the demand for the lighting as a service market across the globe.

The commercial segment is expected to dominate the global lighting as a service market and is expected to maintain its leading position throughout the forecast period, whereas the municipal segment is expected to constitute the fastest growing segment, by end-user. Energy savings and cost reductions promised by lighting as a service constitute an attractive offer for commercial end users in view of the increasing corporate focus on sustainability and energy efficiency.

The indoor segment led the overall lighting as a service market owing to the increasing electricity demand from the commercial sector. However, the outdoor segment is expected to register the higher growth rate during the forecast period. Increasing convergence of IoT for street lighting design and efficient utilization is the main driver behind the growth of the outdoor installation segment in the lighting as a service market. Outdoor installation covers street lighting, park and recreational areas, and parking garages, among others. Growing commercial sector in developing countries is the main driver behind the growth of the indoor segment in the lighting as a service.

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North America: The leading market for lighting as a service

North America is expected to dominate the global lighting as a service market, owing to government support to replace traditional lighting system by energy efficient lighting systems. North America lighting as a service market growth is driven by demand from commercial establishments keen to leverage the cost saving potential of efficient lighting systems and government policy support to phase out traditional lighting systems to reduce energy consumption in the region. It is closely followed by Europe.

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The development of smart cities across the globe is expected to drive the growth of the lighting as a service. Key benefits of using lighting as a service to end users include no upfront costs, reduced energy consumption, continuing cost savings, improved lighting experience, no maintenance liability, and the ability to procure add-on functions, and systems such as data collection, inter-device communication and remote management. Low quality LED products flooding the market have resulted in poor performance of the service. This poses a huge challenge for the market.

Market Ecosystem:

The life cycle of the global lighting as a service market starts with energy auditing. In an energy audit the existing lighting, electricity consumption, existing intensity and needs of the customer are assessed and an efficient lighting system is provided. After auditing, lighting components such as LED chips, circuit boards, casings, and others are selected and installed according to the customer’s need. The last step is lighting maintenance, in which a customer’s lighting consumption is analyzed and off- site & on-site maintenance is provided.

To enable an in-depth understanding of the competitive landscape, the report includes profiles of some of the leading players in the lighting as a service market. These players include Koninklijke Philips N.V (Netherlands), General Electric Lighting (U.S.), Zumtobel Group AG (Austria), SIB Lighting (U.S.), Lunera Lighting (U.S.), Igor Inc. (U.S.) and Cree Inc. (U.S.). Leading players are trying to penetrate developing economies and are adopting various strategies to increase their market share.

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Siddhant Patil

Energy & Power Consultant

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