US & Europe LED Lighting Market - Growth, Trends, Forecasts (2022 - 2027)

The US & Europe LED lighting market is expected to grow at a CAGR of 19.10% during the forecast period. The demand for LED lighting solutions is growing at a fast pace, and with the advent of energy-efficient lighting solutions, the adoption rate of LED is expected to increase further. According to the IEA, in 2019, the global LED sales reached over 10 billion units, including both light sources and luminaires, and expects that the LEDs are expected to make up over 90% of sales by 2030.

Key Highlights

• With LED technology continuing to progress, retailers in the region are looking beyond established benefits like energy efficiency and considering what more can be achieved with LED light. For instance, the ever-improving color range and controllability of LEDs means they are increasingly being deployed to heighten both visual and emotional appeal.
• In Germany, a supermarket chain owner is experimenting with new LED technologies that move beyond straightforward product illumination. An EDEKA store installed lights using innovative Vitasolis LEDs from NICHIA. Vitasolis provides a unique color spectrum that recreates the effect of natural light on people.
• Owing to the growing demand, LED ecosystem players are expected to focus on increasing their production capacities and partner with other value chain players to fulfil their order demands. For instance, in March 2020, Epistar decided to increase its capital expenditure to expand capacity for Mini LED chip production owing to the growing demand.
• Moreover, the North American region is rapidly deploying smart streetlighting solutions and replacing conventional lighting solutions with LED fixtures and other enhanced streetlighting solutions. For instance, in July 2018, the streetlight services division of San Francisco Public Utilities completed the replacement of 18,500 streetlights, with more efficient LED fixtures.
• Further, declining prices of LED lighting over past ten years in also favouring the rapid adoption in commercial building. Likewise, switching to LED lighting could result in the retail store reducing its lighting-related energy consumption by up to 75%, leading to significant savings.

Key Market Trends

Increasing Spending on Street Lighting by the Governments in Expected to Drive the Market

• The majority of North American and European countries, aim at net-zero carbon emissions by 2050. Therefore local manufacturing companies are highly investing in Lighting innovations based on such an agenda. Therefore, the manufacturers are innovating to keep up with the environmental norms.​
• For instance, Linmore LED and pureLiFi have introduced the first LiFi-enabled LED light bars that are designed to replace fluorescent tube lighting. The early adopters of this technology are those that require greater security of data transmission and include federal government and defense, banking, financial institutions, and hospitals. Most of the United States-based vendors are investing in LiFi-enabled LEDs, such as Acuity Brands Inc. and General Electric, as they have an abundant scope for this technology in the future.
• Additionally, the UK councils are moving towards LED lights in a bid to cut carbon emissions and energy bills. It is expected that 70% of councils responsible for street lighting now operate or are planning dimming and partial night-time switch-off regimes for lamps in different areas. Some councils are responsible for a small number of lights, like for footways, parks, or in rural areas.
• Kent County Council stated that the switch to LEDs for its 118,000 lights would save more than 16,000 tonnes of carbon dioxide per year and EUR 5.2 million based on current energy prices. Northumberland County Council has almost converted all its 46,500 lights to LED, which, combined with dimming lights, would save 6,675 tonnes over the lifetime of the project. The council stated It is reducing energy consumption by 63.6%, which equates to a current annual saving of EUR 1.25 million.
• In February 2020, Suffolk County Council's (SCC) cabinet announced a proposal, which would see more than 40,000 of Suffolk’s (UK) lights replaced with more energy-efficient LEDs. If approved, the streetlights throughout Suffolk could all be LEDs by autumn 2022. There are currently more than 60,000 streetlights in the county, which SCC is responsible for maintaining.
• Additionally, in January 2020, Signify Switzerland AG announced a project that includes the upgrade of streetlights to LED sources in the Alpine village of Davos, Switzerland. The project includes the deployment of solid-state lighting (SSL), including installation of the Philips Interact City connected lighting and Internet of Things (IoT) platform. According to the Italian metropolis government, savings of about EUR 10 million can be achieved with the upgrade to the LED streetlamps.

Growing Energy Consumption in Commercial Sector and Efforts to Reduce the Price is Expected to Drive the Market

• Cities are increasingly investing in energy-efficient street lighting systems to replace or enhance their outdated systems. While reliable and bright public lighting reduces accidents and crime and allows for economic activity after sunset, modern energy-efficient street-lighting technology can also lower energy consumption as well as operation and maintenance costs significantly.
• Further, various government implementation is leading to more adoption of LED lighting, which is catering to the market growth of lighting as a service. In 2019, the Trump administration announced it plans to use much more energy-efficient light bulbs to reduce the energy consumption rate and to help in controlling carbon emission, that primarily gets generated in the United States from natural gas-powered plants for electricity generation. As per the plan, all light bulbs sold in the United States must be either LED or fluorescent to meet energy standards.
• UrbanVolt project managed the retrofit of the entire premises, replacing a total of 1,181 fittings with 797 custom-made LED light fittings in just two weeks’ time. As a result of the retrofit, Syncreon has cut its energy consumption by 442,851 kWh annually, which amounts to an almost 70% reduction in the facility’s lighting energy spend.
• LEDs require significantly lower maintenance compared to conventional lighting systems along with lower replacement cycle. For instance, Zero Mountain, a cold storage service provider operating four state-of-the-art facilities in Arkansas, upgraded two of its facilities to next-generation LED lighting by Dialight Corporation. This resulted in the company consuming nearly one million kWh a year in energy consumption and saved nearly USD 100,000 annually while bringing its lighting maintenance demand and cost to zero.
• Also, in the case of California, every new construction or renovation project is subject to the 2013 California Energy Efficiency Standard, also known as Title 24. LED products are very good solutions to meet or exceed the stringent energy consumption requirements outlined in this standard.

Competitive Landscape

The US & Europe LED lighting market is concentrated due to higher initial investments. It is dominated by a few major players like Cree Inc., Dialight PLC, Eaton Corporation, General Electric Company, and OSRAM GmbH. These significant players, with a prominent share in the market, are focusing on expanding their customer base across foreign countries. These companies are leveraging strategic collaborative initiatives to increase their market share and increase their profitability. However, with technological advancements and product innovations, mid-size to smaller companies are growing their market presence by securing new contracts and tapping new markets.

• June 2020 - The New York Power Authority (NYPA) partnered with Signify to support Smart Street Lighting NY. The project, launched in early 2018 by New York Governor Andrew Cuomo, aims to replace at least half of the more than one million streetlights in the State of New York with energy-efficient and sustainable alternatives. Through the program, NYPA provides financial, logistical, technical, and informational support for cities that want to upgrade their street lighting systems.
• February 2020 - US LED, announced the launch of its new Lighting as a Service (LaaS) program - Light Now. Lighting as a Service (LaaS) reduces overall energy consumption and eliminates maintenance. It's an all-inclusive subscription that allows business owners the ability to have energy-efficient LED lighting with no upfront capital. Monthly payments divide the cost of the new LED lighting, the installation, and the maintenance. Because Lighting as a Service is defined as a service agreement, it's designated as an operating expense and not a capital expenditure on the books.

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