LED Lighting Market Size, Share & Trends Analysis Report By End-use (Residential, Commercial), By Product (Lamps, Luminaires), By Application (Indoor, Outdoor), By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global LED lighting market size was valued at USD 50.91 billion in 2020 and is expected to witness a compound annual growth rate (CAGR) of 12.5% from 2021 to 2028. Stringent regulations to ban or limit the use of inefficient lighting technologies and government rebate and retrofit programs to encourage the deployment of LED lighting are contributing to the market growth. LED lighting is comparatively expensive; however, it offers better service life and high lumen power at less wattage compared to incandescent, CFL, and halogen light sources. Moreover, continuously declining prices of LED lamps and luminaires and the availability of smart lighting solutions, coupled with updated energy policies across the world, are expected to provide an impetus for the market growth over the forecast period.

LEDs are highly efficient, reliable, and offer a longer life span, which is anticipated to boost their application in both indoor and outdoor settings. These lights are cost-effective compared to incandescent lights, delivering around 50,000 hours of illumination with a small amount of energy consumed. Low cost of operation and reduced heat losses also make them a suitable replacement for incandescent lights. Technological advancements, shift from conventional to green lighting, and enhanced energy-efficiency standards have also spurred the product demand.

In addition, stringent regulatory policies regarding conventional lighting and energy consumption across the U.S., the European Union (EU), China, and Canada are anticipated to favor the product demand over the forecast period. Corresponding ratings and design standards categorizing energy efficiency, such as Comprehensive Assessment System for Built Environment Efficiency (CASBEE) in Japan, Building Research Establishment Environmental Assessment Method (BREEAM) in the EU, and standards for green construction in China, are projected to bode well for the light-emitting-diode lighting market growth. In the U.S., the products are required to meet multiple regulations, including Energy Star Program, United Nations Environment Programme (UNEP), and National Electric Code (NEC).

Governments offer incentives and rebates on the replacement of traditional lamps with LED products, and this is helping improve the adoption of LED products worldwide. Smart illuminations are also anticipated to offer lucrative opportunities for application in industrial and commercial areas. They can adjust light using control zones. Smart city schemes have become predominant in the U.S. and several European nations with the rising focus on strategies to reduce peak power demand and overall energy consumption.

In 2020, the Covid-19 pandemic disrupted the overall market growth. Major players, such as Acuity Brands Lighting and Signify Holdings, incurred revenue losses owing to a decline in demand, disruption in supply and distribution, and delay in completion of construction projects (that help create the demand for lighting). In addition, the temporary lockdown and partial ban on mobility led to a declined contribution to the market from the industrial and commercial sectors, such as retail, manufacturing, and hospitality.

China is the largest product exporter as well as manufacturer and has also gained prominence in terms of adoption across the country. However, it was the first country to be affected by Covid-19, which disrupted the supply of product components across the world and created the supply-demand gap. However, the availability of the Covid-19 vaccine and the decline in the rate of infections in 2021 are expected to redirect the market toward growth as businesses resume operations.

Product Insights

The LED luminaires segment dominated the market in 2020 and accounted for over 55% of the global revenue share. Based on product, the market has been segmented into lamps and luminaires. Luminaires are widely used in commercial and industrial segments. New installations predominantly drive the demand for LED luminaires. The segment includes lights used in streetlights, high bays, downlights, track lights, troffers, and suspended pendants for various applications. LED luminaires deliver more light per output power.

They are easier to control and permit optic designers to use them more proficiently and use less light to illuminate the same area. The U.S. Environment Protection Agency (EPA) predicts that LED would dominate light bulb technology in the coming years, provided the awareness and promotion of LED bulbs by manufacturers, distributors, and retailers are strong. LED manufacturers upgrading their products or adding new lighting solutions to their portfolios had to cancel offline events owing to Covid-19. However, they were able to launch their offerings through online conferences.

The LED lamps segment is anticipated to register the highest CAGR over the forecast period owing to their increasing adoption in developing countries. These lamps have various advantages over incandescent lamps, including robustness, energy efficiency, and right temporal stability. Moreover, they are available in multiple designs and applications, such as T-lamps, reflectors, A-lamps, and MR-16 lamps. The accentuated regulation roadmaps to phase out incompetent light bulbs are expected to contribute to the demand for these lamps in residential and commercial applications.

End-use Insights

The commercial segment dominated the market in 2020 and accounted for more than 52% of the global revenue share. The demand for LED troffers and downlights is driving the commercial segment. The high-end lighting for commercial end-use mainly includes galleries, museums, and other exhibition lighting applications that primarily use reflectors, projectors, and downlights. High brightness LED lights are anticipated to witness major demand from the industrial lighting segment. These lights must comply with industrial lighting standards and regulations defined by various governments. For instance, in the U.S., Occupational Safety and Health Administration (OSHA) sets standards for lighting in the workplace. Some of the mandates under the OSHA standards include covering light fixtures with protective plates, installing fixtures at least 7 feet above the work surface, and covering exposed parts of lighting and wire fittings.

The residential application includes portable plug-in fixtures, such as table lamps, pendants, and floor lamps, as well as permanently installed fixtures, such as under recessed sconces and cabinet lights. The residential segment has witnessed high growth in the last few years as the adoption of LED A-type lamps has increased exponentially owing to reduced product prices and increased subsidy programs by various governments and agencies. However, the demand in the residential sector was negatively impacted during the pandemic as some of the vendors announced a rise in the prices due to the increased expenses of product manufacturing.

Application Insights

The indoor segment led the market and accounted for over 68% share of the global market in 2020. The segment is expected to retain its dominant position throughout the forecast period due to high product adoption as an alternative to fluorescent, High-Intensity Discharge (HID), and incandescent lamps. The use of LED lights in offices, retail stores and malls, hospitals, and education buildings has increased over the past few years.

Outdoor applications include airports, corporate campuses, industrial, government, and healthcare infrastructure; highways and roadways; and public places, such as signage and traffic signals. The product demand in outdoor applications can be profoundly affected by public policy interventions and municipality support. Government initiatives, such as the LightSavers program undertaken by The Climate Group, are expected to trigger the substitution of traditional lighting solutions.

Regional Insights

Asia Pacific accounted for the largest market share exceeding 42% in 2020 and is likely to retain the leading position growing at the fastest CAGR over the forecast period. Taiwan, Japan, and China are the key contributors to the regional market growth owing to the initiatives undertaken by the respective governments for adopting light-emitting diodes along with the presence of a large number of market players. The fastest-developing countries in the region, which are China, Indonesia, India, Vietnam, and Malaysia, have a booming construction industry owing to increasing local and migrated population and changing lifestyles. Thus, the rapidly growing construction sector in APAC is also contributing to the product demand in the regional market. However, as the commercial, industrial, and residential construction projects were delayed due to the lack of workforce during the pandemic, the expected growth in demand in 2020 slumped, leading to a decline in the overall market growth.

Asia Pacific is recognized as the major supplier of LED chips and packages, with manufacturing facilities in China, Taiwan, South Korea, and Japan, hence, is playing a decisive role in the pricing of LED luminaires. The debt crisis in Europe adversely impacted the demand for LEDs, as their production requires enormous capital investments. In recent times, Europe and North America have witnessed a boom in the demand for LED lighting owing to government support and the growing use of ultra-modern lighting in several industries. The trade war between the U.S. and China caused a rise in import duties and an eventual increase in the overall product prices. This factor is expected to benefit the European manufacturers.

A strong dollar policy is likely to help the U.S. become a significant growth driver for the overall product demand. The country has also been a strong advocate of light-emitting diode lighting with announcements of new policies and guidelines regarding the use of LED technology; investments in R&D of energy-efficient lighting solutions; extended use in commercial, industrial, and residential applications; and participation in public-private partnerships to boost local markets. This factor is expected to boost the North American regional market growth over the forecast period.

Key Companies & Market Share Insights

The market is highly competitive and concentrated with the top five companies accounting for most of the revenue share of the market. New product developments, improvements in the existing product lines, and mergers & acquisitions are some of the strategies adopted by key players to maintain their market shares. The practice of forward integration is trending in the market with semiconductor manufacturers trying to establish themselves as lighting manufacturers.

However, light manufacturers are looking forward to more significant opportunities through direct selling and building their distribution network, as it is highly essential to achieve economies of scale for improving profitability. The number of assembly units is much higher as compared to that of core manufacturers; these companies import low-cost components from Chinese suppliers and assemble them at their facilities to gain higher profits. However, in recent years, stringent compliance regulations have forbidden these companies from procuring generic components from Chinese suppliers, as they need to adhere to energy labels.

Amid the news of shifting manufacturing facilities out of China, GE lighting moved its production of Walmart’s Great Value lightbulbs to China in 2020 as the company is unable to economically continue its operation line in Ohio, U.S. Moreover, the lack of workforce and the disruption in the supply of electronic components due to the pandemic have negatively affected the company's revenue in 2020. Companies, such as Acuity Brand Lighting and Signify Holding, have resumed their manufacturing facilities and are expecting positive outcomes by the end of 2021. Some prominent players in the global LED lighting market include:

• Acuity Brands Lighting Inc.

• Cree Lighting (IDEAL INDUSTRIES INC.)

• Dialight

• Digital Lumens Inc.

• Hubbell

• LSI Industries Inc.

• LumiGrow

• Panasonic Corporation

• Siteco GmbH

• Signify Holding

• Semiconductor Co. Ltd. (Seoul Semiconductor)

• Zumtobel Group Ag

LED Lighting Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2028. For the purpose of this study, Grand View Research has segmented the global LED lighting market report on the basis of product, application, end-use, and region:

• Product Outlook (Revenue, USD Billion, 2016 - 2028)

  • Lamps

    • A-Lamps

    • T-Lamps

    • Others

  • Luminaires

    • Streetlights

    • Downlights

    • Troffers

    • Others

• Application Outlook (Revenue, USD Billion, 2016 - 2028)

  • Indoor

  • Outdoor

• End-use Outlook (Revenue, USD Billion, 2016 - 2028)

  • Commercial

  • Residential

  • Industrial

  • Others

• Regional Outlook (Revenue, USD Billion 2016 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa