LED lighting Market size forecast to witness growth at 28 % CAGR from 2016 to 2023
LED lighting market size was valued around USD 16 billion in 2014 and is expected to grow at CAGR of over 28% from 2016 to 2023. It is anticipated to reach over USD 45 billion over the forecast period. The industry is likely to achieve share of around 84% of lumen-hour market sales in the general illumination market by 2030.
In 2014, UK LED lighting market size was anticipated to be valued over USD 400 million at manufacturers’ selling prices (MSP); this includes all finished products, non-domestic and domestic used within building and construction sectors.
The commercial LED lighting market is primarily driven by energy efficiency and enhanced controllability over the forecast period. The consumers are willing to pay for a new lighting fixture for the first installation. For residential and office lighting sectors, the average cost increases to 30% and 39% respectively. However, for all application areas, the overall cost increases to around 30%. This transformational provides several opportunities across OEM’s, but also presents huge strategic challenges to top industry players in terms of business model and technology change.
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In addition, stringent regulatory policies across the European Union (EU), U.S., Canada, and China regarding bans of inefficient lighting and energy consumption are expected to favor the industry demand over the forecast period. It was further helped by programs undertaken by the U.S. government such as the rebates offered by utilities in order to reduce lighting energy utilization by around 40%.
Significant LED market price reductions in recent years have in large part enhanced adoption globally. Intense competition among various key manufacturers is expected to drive continuous innovation in LED chip, system design and package. However, dominance of fluorescent lamps coupled with high initial cost is expected to hamper the industry growth from 2016 to 2023.
In 2014, the largest applications for LED lighting market included residential, architectural, retail and outdoor. Among all the applications, architectural sector leads the industry by gaining maximum percentage of shares. Others application areas are also expected to grow at a swift rate over the forecast period. The fastest growing applications are industrial, hospitality and office. Industrial sector is likely to grow from a low base, while adoption in the large office space would amplify outside of the headquarters buildings that were more of the architectural adopters.
LED lighting is cost effective as compared to the incandescent lights, offering around 50,000 hours of illumination with a small portion of the energy consumed by traditional incandescent bulbs. They are long lasting and also generate 90% less heat than other incandescent bulbs. The LED’s are experiencing a surge in growth owing to the acceptance of new technologies in the mainstream lighting industry from 2016 to 2023. The industry is mostly reliant on new installation and system upgrades applications. In 2013, non-domestic was the foremost application segment accounted for over 80% of industry share.
Key application markets include industrial lighting, outdoor lighting, architectural lighting and commercial lighting. The industry can be further bifurcated on the basis of region which includes North America, Europe, Asia Pacific, Latin America and MEA. Asia Pacific LED lighting market developed relatively earlier and accounted for over 40% of the overall share in 2014. China LED lighting market is expected to grow at a CAGR of over 35% from 2016 to 2023.
Key manufacturers for the global LED lighting market share include Cree, Epistar, GE Lighting Solutions, Everlight Electronics, GYLED, Lite-On Technology, Mitsubishi, Osram, Philips, Lighting Science Group, Solid State Lighting Systems, Samsung, Avances Lumínicos Plus S.A. de, Black Dog LED, Bridgelux, Litecontrol, Lowcled and Toshiba among others.
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