Smart Lighting Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2025 - 2032)

Smart Lighting Market Trends & Growth Drivers

Greener Lighting Solutions Are Trending Worldwide

• The increasing worldwide demand for energy is responsible for the rise in energy prices, tight supplies, and growing anxiety about climate change and related liabilities.
• The global energy demand is rapidly outpacing the supply, with consumption further predicted to increase by more than 50% in the next 20 to 25 years.
• Meeting this demand would require approximately 700 new power plants rated at an average of 500 Megawatts each, which would cost approximately USD 1 trillion.
• This has, in turn, has led to an increase in the demand for energy-efficient lighting systems capable of saving hugely on energy consumption and operational cost.
• Although has been in use for nearly a decade, the real paradigm shifts in the lighting industry came through digitization.
• Digitization, with the adoption of smart automation and connected technologies, is impacting all applications, including housing, retail, office spaces, and government buildings, by revolutionizing the way lighting systems use energy and interact with their surroundings.
• Apart from this, the advent of IoT and new wireless and wired hybrid protocols for lighting solutions is accelerating the global market growth.

Development of Smart Cities Boosting Technology Uptake

• According to the United Nations Human Settlements Program, today’s cities consume more than 75% of the world’s energy.
• The advent of advanced communication and digital technologies has helped address many of the challenges in the development of smart infrastructure projects.
• With the minimization of such challenges and use of data sharing & analysis and intelligent designs, smart cities would make lives better and healthier, by reducing GHG emissions.
• In addition, the growth in the development of smart cities has further led to an increase in the demand for smart lighting solutions, thus driving the global smart lighting market.
• Since smart cities use sensors and embedded devices, from streets and power meters to traffic signals, the consumption of energy reduces by a great extent.
• Apart from this, smart city initiatives relying on open, connected infrastructures require the streamlining of operation and energy conservation, to make living cheaper and convenient.
• The integration of connected and multi-sensor nodes enables the creation of a powerful sensing network, which gathers information related to the smart city environment, such as humidity, CO2, UVA light, and human activities and helps municipalities in reducing energy consumption and maintenance cost of smart cities.
• Moreover, such technologies can improve transportation revenue through energy-efficient traffic lights and lower night accident rates through connected street lights.

Advancements in Lighting Control Offer Opportunities

• Advanced lighting control systems have been increasingly prevalent in recent years.
• The global smart lighting market players have ample opportunity to tap this market space with development of sophisticated and advanced automation, and lighting control systems through smart lights and electronic equipment.
• Lighting controls save energy and cost by ensuring lights are turned off when not in use or reducing the amount of illumination while sensing the nearby environment and brightness.
• Energy and cost savings through advanced lighting controls are dependent on the specific applications and site utilization rates.
• Rapid developments and advancements in occupancy/vacancy sensors, plug and play lighting systems, personal dimming and brightening controls, and lighting control circuit breakers to reduce energy waste via intelligent, building-wide control systems, are expected to further bring this opportunity in mainstream and provide significant space for the growth of global smart lighting market during the forecast period.

Smart Lighting Market Analysis

Installation Type Analysis

New installation holds the larger share, of around 60%, because of the strong need to eliminate traditional lighting systems from the mainstream and install novel lamps and associated controls. Moreover, the whole system is being changed and updated with the latest equipment, and it is being widely used in the newly constructed commercial, industrial, and residential spaces.

The retrofit category will witness the higher CAGR due to people’s increasing awareness of the benefits of smart, controllable lights. As per the World Green Building Council buildings are responsible for 39% of the global GHG emissions. Similarly, the IEA says that built infrastructure accounts for 30% of the worldwide final energy consumption. Smart lights, especially LEDs, can reduce energy usage for lighting by up to 15%. Further, new ways of retrofitting lights into existing fixtures make the process easier, quicker, and affordable.

These installation types are covered:

• New (Larger Category)
• Retrofit (Faster-Growing Category)

Component Analysis

Hardware holds the larger share, of around 55% in 2024. This is because the actual luminaires are the primary part of a smart lighting system. The dominance of this category is credited to the rising demand for smart, connected lights, ambient lights with changeable colors and intensity, and the accompanying controls and sensors for automation. The market growth is also attributed to the rising rate of technological advancements and ever-changing smart lighting system controls. Lighting controls, which include ballasts, switches, dimmers, relay units, and gateways, provide the latest functionalities with standard protocols and distributed control systems. These components enable advanced applications of various products, such as LEDs and HIDs.

Software will witness the higher CAGR over the forecast period. The sensors and controls work with cutting-edge software, which continues to advance with extensive R&D. The software not only makes the lights controllable remotely, via mobile phones, smartwatches, and tablets, but also automates the fixtures, for instance, according to the availability of natura light. With the growing popularity of building management systems and predictive maintenance, software facilitates real-time data sharing with utilities and light manufacturers.

The report covers the following components:

• Hardware (Larger Category)
  • Lights & luminaires
  • Lighting controls
  • LED drivers & ballasts
  • Sensors
  • Switches
  • Dimmers
    • Wired dimmers
    • Wireless dimmers
  • Relay units
  • Gateways
• Software (Faster-Growing Category)

Source Analysis

LEDs lead the market with 60% share, and they will account for the fastest growth in the smart lighting market, due to the advent of new, smart technologies in LED lighting. The market is also driven by the high consumer awareness of the benefits of shifting from the traditional incandescent lamps to more-energy-efficient and reliable lighting sources. According to the U.S. Energy Information Administration, around half the U.S. households use LED bulbs for most of their indoor lighting purposes.

The sources studied are mentioned below:

• Light Emitting Diode (LED) (Largest and Fastest-Growing Category)
• Fluorescent Lamp
• High Intensity Discharge (HID) Lamp
• Others

Connectivity Analysis

The wireless category is expected to witness the higher CAGR during the forecast period. This is due to the increasing demand for Wi-Fi-based lighting solutions, declining costs of smart LED lights, and growing penetration of wireless internet across households. Wireless connectivity is preferred among consumers who require connections within a small range, thus making it the faster-growing category over the forecast period. Wireless technologies, such as Wi-Fi, Bluetooth, SmartThings, Z-Wave, and ZigBee, connect lighting fixtures with smartphone apps, to offer remote control. The residential sector has widely adopted wireless technology to control the luminaire’s hues and colors, for aesthetic purposes, within a confined space.

The increasing deployment of wireless technologies for lighting applications across sectors is credited to the heavy investment in and the high customer demand for wireless lighting solutions.

The segment has the following categories:

• Wired (Larger Category)
  • Digital addressable lighting interface
  • Powerline communication
  • Power-over-Ethernet
  • Others
• Wireless (Faster-Growing Category)
  • Wi-Fi
  • Bluetooth
  • Zigbee
  • Others

Application Analysis

The indoor category dominates the market, with a revenue share of around 65% in 2024. This is due to the increasing pace of advancements in indoor smart lighting solutions, right from ceiling lamps to temperature control lighting systems. The indoor application is further categorized into residential, commercial, and industrial. Among these, the residential category will witness a high growth rate over the forecast period due to the rising popularity of smart bulbs and fixtures that can be controlled by users for setting varying mood-based illumination.

Additionally, the demand for intelligent lighting in commercial and industrial spaces is propelled by the requirement to control energy consumption by office spaces and warehouses that are functional 24x7. Installing smart lights with inbuilt sensors ensures the lights are used only as required, based on the movement of people, which is captured by sensors. Additionally, the brightness can automatically be increased or decreased based on the amount of natural light coming in from outside.

The higher CAGR is expected from outdoor applications due to the rapid adoption of smart outdoor lighting solution by municipalities of smart cities. Additionally, the rise in the deployment of connected street lighting systems in emerging economies and growth in outdoor smart garden and lawn lighting adoption across medium-sized and large residential spaces, globally.

Here are the applications part of the research scope:

• Indoor (Larger Category)
  • Residential
  • Commercial
  • Others
• Outdoor (Faster-Growing Category)
  • Highways & roadways
  • Public places
  • Others

Regional Analysis

• Europe has the leading position in the smart lighting market, with a revenue share of around 30% in 2024, and it will hold the same in the coming years as well.
• The growth in the region is attributed to the rising adoption of tech-enabled workspaces and the booming adoption of standard protocols for lighting control systems.
• The market is also driven by the rising concerns for the environment. The European lighting industry, along with European regulators, has aimed to increase the adoption of intelligent and human-centric lighting and smart buildings.
• North America is the second-largest region due to the increasing adoption of smart and energy-efficient lighting solutions to address the lighting and large energy bill issues in the region.
• The Asia-Pacific region is expected to showcase the highest CAGR in the coming years. This is due to the rise in the demand for residential and commercial illumination.
• The rising investments in smart city projects is also expected to propel the growth of the market.
• For instance, China has invested in over 500 smart city projects to improve the lives of the urban populations, which would drive the demand for intelligent and energy-efficient luminaires, fixtures, and the associated controls and software.

Below is the regional breakdown of the market:

• North America
  • U.S. (Larger and Faster-Growing Country Market)
  • Canada
• Europe (Largest Regional Market)
  • Germany (Largest and Fastest-Growing Country Market)
  • France
  • U.K.
  • Italy
  • Spain
  • Rest of Europe
• Asia-Pacific (APAC (Fastest-Growing Regional Market)
  • China (Largest Country Market)
  • India (Fastest-Growing Country Market)
  • Japan
  • South Korea
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest and Fastest-Growing Country Market)
  • Mexico
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia
  • South Africa
  • U.A.E. (Largest and Fastest-Growing Country Market)
  • Rest of MEA

Smart Lighting Market Share

The market is fragmented because there are a large number of light manufacturers around the world. The rapid advancements in technology and the falling costs of LEDs have made smart lights affordable to develop. Further, players work with an array of communication technologies, which means varying expertise for different companies. Additionally, there are no real regulations on energy consumption specifically for smart lights, which means than even local, regional, and new companies find it easy to reach customers. The players also have access to a variety of distribution channels, from hypermarkets and local electrician stores to dedicated home furnishing chains and e-commerce websites.

Smart Lighting Market News

• In December 2024, Honeywell International Inc. signed a 25-year contract to provide building energy management solutions to Melton Hospital, in Victoria, Australia.
• In December 2024, ams Osram AG and Valeo signed an agreement to integrate the former’s OSIRE E3731i intelligent LEDs with the latter’s dynamic ambient lighting systems to offer personalized and responsive automotive interior lighting.
• In November 2024, Acuity Brands Inc. launched REBL LED High Bay under its Lithonia Lighting brand. The lights feature adjustable lumens and correlated color temperature, Field Install SensorSwitch TLS Sensor, and micro-prism optics.
• In September 2024, Signify N.V. introduced the Philips Hue Play HDMI sync box 8K, which allows gaming devices using the HDMI 2.1 video standard to synchronizes lights, with refresh rates up to 120 Hz and resolutions up to 8K.