Solar Street Lighting Market Overview
The global solar street lighting market size was valued at $2.8 billion in 2016, and it is forecasted to grow at 21.2% CAGR during 2017 - 2023. As compared to on-grid type, the standalone type of solar street lights held larger market share. Out of various applications, the solar street lighting market for commercial applications has been the maximum, while among the lighting types, LED lighting witnessed maximum growth rate in historical period.
GLOBAL SOLAR STREET LIGHTING MARKET, BY PRODUCT TYPE, $M (2013 – 2023)
The emergence of smart cities globally has been a key factor leading the growth of solar street lighting market. The United Nations has estimated that by 2030, over 60% of the global population will be living in urban areas. With rapid urbanization, the demand for resources such as energy, water and sanitation will increase. Rapid urbanization emphasizes on the necessity to use resources more efficiently or judiciously. This justifies the need to develop smart cities to meet the needs of residents. Responding to these needs, numerous smart city projects have emerged worldwide, especially in the developing countries.
Currently, various smart city projects underway include Amsterdam, San Francisco, Cafeidian, Barcelona, Lavasa Beijing, Konza, Masdar, Kashiwa-noha, Santander, Shanghai, Shenyang, Sant Cugat, Singapore, Songdo, Wuxi, Tianjin, and 100 smart cities projects launched recently by the government of India. In addition to sharp solar panel price decline, various government incentives have made solar energy one of the major renewable sources of energy for powering smart cities in the future, which will also include demand of solar street lights.
A major trend in the solar street lighting market is the growing demand of cellular-connected solar street lights. The governments of various developing countries are adopting the use of cellular-connected solar powered street lights as they can be run at a very low cost and ease the monitoring of lights. Solar street lights, when connected to a mobile network, can be controlled remotely through an IoT enabled device.
The decreasing price of solar lighting units is another trend in solar street lighting market. As per a report by the NREL, it was found that cost of using solar PV for power generation dropped by 60% between 2009 and 2016. In 2009, the cost of using solar PV was around $7.06 per watt as compared to just $2.93 per watt in 2016. From 1998 to 2013, the cost of installing residential solar PV declined from 6% to 7% per year, and by 12% during 2012–2013. As the solar PV are an inextricable part of solar street lights, the decrease in cost of solar PV will also decrease the cost of solar street lights.
There has been a significant drop in the price of photovoltaic panels over the past few years which is expected to go down further, thus accelerating the adoption of solar street lights. Although, the tax credits and other incentives provided by governments of various developed countries, such as the U.S., that pushed the industry, may get expired in the next few years, there is no shortage of investors in the market and there also exists a tremendous support from The World Bank to the developing countries such as Nigeria.
Solar Street Lighting Market Dynamics
The stringent government regulations and support is the major factor driving the solar street lighting market across the globe. Governments of many countries such as India, China, and the U.S. have made stringent regulations and schemes such as feed in tariffs and quota based renewable portfolio standards (RPS), or promotion of renewable sources of energy such as solar, wind power and others. Regulations are further made more stringent with a target to reduce carbon footprint in the environment, which are rising due to the use of nonrenewable sources of energy.
In many countries, government is providing financial support as well as subsidies for using renewable sources of energy. Various schemes, campaigns and programs introduced by The World Bank and International Finance Corporation to promote solar power solutions have led to increasing global solar street lighting market. World Bank has been providing support to various countries to increase the use of renewable sources of energy over conventional sources, on account of providing a cleaner fuel to the environment. For instance, in March 2017, The World Bank approved $100 million funding for large scale solar parks in India.
The reserves of fossil fuels such as coal and gas, which are the key sources for providing conventional energy, are depleting very fast. The declining levels of coal and gas reserves has led to increase in their extraction costs, and surge in tariff for power usage. Further, continuously increasing network charges, for instance, the charge on the delivery of energy via transmission lines, are increasing the cost of electricity. Due to the rising cost, governments in various countries are focusing on opting for solutions such as solar LED lights, which are more reliable and efficient than the conventional sources of lighting systems.
As of 2014, over 1.2 billion population across the globe had no access to grid electricity. The situation does not seem to have changed much since then the highest demand for off grid electricity is arising from Asia-Pacific and Africa, where urbanization is increasing at a high rate. This huge demand for electricity can be catered by standalone systems, which do not require grid connectivity to provide lighting, rather they can generate power by taking energy from sun. This factor is benefitting the standalone solar street lighting market throughout the globe.
Absence of global LED standardization is one of the major factors restraining the growth of the solar street lighting market. The governments of various countries have passed stringent laws for the use of energy-efficient technologies, with no focus toward standardizing product specifications at global level.
Hence, the standards for LED in solar street lights vary across countries. It further acts as a hurdle for suppliers as they need to qualify the standards in countries where they intend to do business. Stiff competition on account of penetration of counterfeit products in the market is another factor restraining the growth of solar street lighting market. In some parts of the world, although the demand of solar street products is high, their low availability has led to intrusion of inferior quality products with equivalent costs. The high penetration of counterfeit products in the market has resulted in increased competition.
Solar Street Lighting Market Competitive Landscape
Leading manufacturers in solar street lighting market are focusing on expanding their production units across developing economies, such as India and China. Asia-Pacific is expected to be the most lucrative market for solar street lights due to large number of constructions taking place, such as streets, highways, airports and fly overs.
Some of the major players operating in the solar street lighting market include Carmanah Technologies Corp., Koninklijke Philips N.V., Omega Solar, Sunna Design, Su-Kam Power Systems Ltd., Sokoyo Solar Group, Urja Global Ltd., Dragons Breath Solar, Solektra International, and Solar Street Lights USA.