Outdoor Lighting Market Overview
The global outdoor lighting market was valued at $8,740.0 million in 2017 and is forecasted to witness a CAGR of 8.0% during 2018–2023. Growing adoption of energy-saving and cost-efficient lighting products and increased government focus on energy conservation are the major factors driving the market growth.
APAC OUTDOOR LIGHTING MARKET, BY LIGHTING TYPE, $M (2013-2023)
Based on lighting type, the outdoor lighting market has been categorized into high-intensity discharge (HID) lamps, light-emitting diode (LED) lights, fluorescent lights, and plasma lamps. In 2017, HID lamps dominated the market, accounting for more than 58% revenue share. During the forecast period, the market is projected to witness the highest growth in the category of LED lights, on account of their increasing penetration as an energy-efficient lighting source and the growing government support toward the use of these lights for outdoor lighting applications in countries such as India, China, Germany, and the U.S.
The outdoor lighting market has also been categorized into fixture and control lighting components. The fixture component held more than 62% revenue share in the market in 2017. During the forecast period, the control component is expected to witness higher growth in the market. This can be attributed to the government initiative toward the development of smart cities in various countries, including India, Australia, and the U.K., which requires installation of smart street lights.
On the basis of application, the outdoor lighting market has been classified into streets, highways, parking lots, stadiums, tunnels, and others, where “others” include gardens, parks, business parks, and farms. Among these, streets were the largest application area of outdoor lights during the historical period. They accounted for about 22% revenue share in the market in 2017 and are also expected to be the fastest-growing category in the market during the forecast period. The market growth of this category will be mainly due to the development of smart cities, across the globe, where installation of smart street lights will help save energy, reduce maintenance costs, control the light intensity, and reduce carbon emissions.
Based on distribution channel, the outdoor lighting market has been categorized into commercial and retail channels. Revenue from commercial channels has been higher in the market, as compared to that from retail channels, because outdoor lights are typically sold in bulk, based on their utility, by the companies or specialist distributors.
Globally, Asia-Pacific (APAC) was the largest revenue contributor to the outdoor lighting market in 2017, as it is a major hub for the manufacturing and distribution of LED-based lighting systems and a major exporter of energy-efficient lighting solutions. The region is expected to continue accounting for the largest revenue share in the market in the coming years as well. Besides, during the forecast period, the market is expected to witness the fastest growth in APAC, on account of the development of smart cities in the region.
Outdoor Lighting Market Dynamics
The concept of smart outdoor lighting is gaining popularity, as it finds promising application in roadways and highways, city parks and public areas, commercial sites, outdoor parking lots, and university and college campuses. As electricity prices are constantly on the rise, more number of municipalities are switching to smart outdoor lighting solutions to reduce functional costs while improving efficiency and safety. Benefits associated with the deployment of smart outdoor lighting solutions include up to 40%–50% energy savings and the real-time monitoring and control of connected smart street light infrastructure.
Growing adoption of energy-efficient and economical products and increased government focus on energy conservation are encouraging the penetration of energy-saving lighting sources, such as LEDs, which, in turn, is boosting the growth of the outdoor lighting market. LEDs are particularly beneficial in outdoor lighting applications, as they work efficiently for long hours and have low maintenance costs. LED lights offer several advantages over incandescent, fluorescent, and even high-pressure sodium lights, such as higher efficiency, lower maintenance costs, resilience to vibration, and intelligent control. These, in turn, lead to substantial savings, in terms of both energy and operational costs.
Implementation of outdoor lighting solutions in public places is an important part of the government’s strategic asset management of cities and municipalities. Thus, growing government initiatives toward energy conservation are a key factor driving the growth of the outdoor lighting market. Governments across the world are banning the use of inefficient technologies and passing stringent legislations on energy efficiency. This is likely to propel the demand for energy-efficient lighting solutions, such as LEDs, in the coming years.
High import duties on lighting solutions are expected to hinder the growth of the outdoor lighting market. Also, due to the political impact, import rates in countries such as Brazil, Argentina, and Italy are quite high, which, in turn, lead to an increase in the prices of different technology-based lighting solutions in these countries. However, governments of countries like India and Australia are supporting the usage of energy-efficient lighting sources, due to which import duties in these countries are expected to reduce during the forecast period.
Advancements in the LED lighting technology, such as the use of chip-on-board (COB) technology, have led to the development of energy-efficient and economical LED lighting products. This is expected to encourage consumers to switch from traditional lighting solutions to LED lighting solutions for outdoors. In addition, the arrival of smart technologies, such as daylight sensors and control systems for the remote monitoring of smart street lights, has changed the paradigm of the industry from conventional lighting to smart lighting solutions. This change can be viewed as a growth opportunity for the players in the outdoor lighting market.
Outdoor Lighting Market Competitive Landscape
Major players in the outdoor lighting market, such as Syska LED and Philips Lighting Holding B.V., offer LED lights, to meet the growing demand. Players like General Electric, Osram Litch AG, and Hubbell Incorporated have stopped manufacturing HID lamps, as these lamps have become obsolete.
Some of the key players operating in the market are General Electric, Osram Light AG, Hubbell Incorporated, Cree Inc., Eaton Corporation plc, Philips Lighting Holding B.V., Syska LED, Virtual Extension, Dialight plc, and Zumtobel Group AG.