North America Commercial LED Lighting Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)
The North American Commercial LED Lighting Market is expected to register a CAGR of 9.5% over the forecast period. Technological advancements and rising concerns over environmental protection have propelled the need for energy-efficient lighting products for commercial, industrial, and residential applications across North America. Key Highlights
Key Market TrendsSmart Lighting is Expected to be the Future of Commercial LED Lighting
- North America houses important factors essential to commercial area lighting. The requirements are greater light coverage in the lumen, increased durability, and the right power source. LED can address those key requirements. Thus, it is preferred over other existing technologies. It has higher fuel savings, wider light coverage, and more than 100,000 lumens and is comparatively cheaper to own and maintain.
- The integration of intelligent features for connected lighting is emerging as one of the significant drivers in the studied market, as LED is one of the major components. Government initiatives for smart cities contributed to the rising demand for smart lighting solutions. Connected lighting systems are anticipated to emerge as one of the most critical components of the smart city infrastructure.
- According to the Department of Energy (DOE), LED is a highly energy-efficient lighting technology and has the potential to change the future of lighting in the United States fundamentally. The widespread use of LED lighting has a large potential impact on energy savings in the US. Further, by 2035, the majority of lighting installations are expected to use LED technology.
- Retail stores, offices, and Government aided sectors such as public properties are gaining traction in implementing LED solutions on a large scale to reduce energy consumption and increase energy utilization efficiency. For instance, in June 2021, Fluence by OSRAM and Prospiant, a Cincinnati, Ohio-based provider of complete ecosystems for controlled environment agriculture (CEA) and extraction technologies, announced that Fluence would serve as the preferred LED technology supplier within Prospiant's full ecosystem offerings.
- Additionally, Canada is anticipated to grow faster over the forecast period. The growth in the region can be attributed to the rise in real estate infrastructure development and investments across Vancouver and Toronto. The increasing adoption of advanced A-lamps and T-lamps across commercial space is driving market growth in the region.
- Since the outbreak of COVID-19, various businesses have faced challenges in the supply chain. The LED industry was no exception. As a prominent share of the raw materials for producing LEDs and drivers originated from Asian countries, the industry was significantly affected during March and April, as the region was under the severe clutches of the COVID-19 pandemic.
- However, owing to the increase in import duties from China, several companies have started shifting production lines, and sourcing LED lighting solutions and components from other countries, which has further increased the installation cost of manufacturing facilities and the bargaining power of the raw material suppliers.
- To attract industrial customers, customizing light output in accordance with the environment is a common trend among manufacturers. Hence, tunable LED lighting solutions have been witnessing improved adoption in the last few years. In the United States market, mergers, acquisitions, and collaborations are prevailing trends adopted among the market players for product innovation and inorganic growth.
United States to Hold Major Market Share
- Every commercial environment requires work-centric uniform illumination, owing to various applications. LEDs' high efficiency and directional nature make them ideal for several applications such as in Retail, Offices, and Hospitality, among others. In addition, LEDs offer up to 90% greater efficiency than the conventional HID systems used for such applications.
- The United States is a developed and commercialized society, with Americans using significant energy across businesses and industries. According to American Geo Sciences (AGI), the industrial sector consumes 32% of all power, including electricity, facilities, and equipment used for manufacturing, mining, agriculture, and construction. With the region's high energy consumption, the government should invest significantly in greener, smarter, and more efficient solutions.
- The advent of the Internet of Things (IoT) and the subsequent introduction of new business models, such as Lighting-as-a-Service (LaaS), has eliminated the need for high upfront payments, allowing the market to shift to an OPEX model. The leasing model has enabled large-scale installations of LED lights and their adoption in the commercial segment.
- Owing to the rising need to save energy, leading players in the market, such as Verizon, have introduced innovative and cost-effective measures for streetlights. The Verizon Intelligent Lighting platform converts LED fixtures into sensor-equipped smart devices that capture and transmit data in near real-time such that one can get full control over all lights, insights into the state of lighting infrastructure, and access to an array of lighting applications and services.
- Further, in July 2021, Smart labs, a pioneer in smart lighting and electrical control, announced the launch of Nokia Smart Lighting, a suite of IoT-powered lighting and electrical control products. The first-ever Nokia Smart Lighting products are designed to make smart lighting straightforward to buy, easy to install, and intuitive for office spaces and hospitality solutions.
- According to the US Energy Information Administration, LED lights have become the second most common bulb type in commercial buildings. Laws such as the Energy Independent and Safety Act of 2007 have had a significant impact on the growing use of more efficient lighting options by establishing minimum efficiency requirements for producing new light bulbs.
- According to the long-term energy forecast for Annual Energy Outlook 2021 (AEO2021), the US Energy Information Administration expects LED lighting to continue to grow, meeting up to 95% of the commercial lighting demand by 2050.
- Moreover, the controllability of LED lights is also driving their demand in the commercial sector. Capabilities, such as dimmability, daylighting, occupancy sensors, and timers, are enticing vendors to implement the solutions in their facilities.
- Companies are innovating new LED solutions to sustain themselves in the market. For instance, in July 2021, Lumileds Holding, with its operational headquarters in the United States, introduced its new LUXEON 2835 Commercial LEDs. These LEDs are engineered and designed to support the increasing demand for a high volume, high-efficacy mid-power LED to serve commercial indoor lighting applications. Typical commercial indoor applications include troffers, panels, and high-bay, among other formats.
- Additionally, the government is also regulating the lighting systems used in commercial spaces, limiting energy consumption. For example, the Federal Energy Management Program (FEMP) provides guidance for the acquisition of commercial light-emitting diode (LED) luminaires in the United States. Such trends are anticipated to drive the growth of the market studied during the forecast period.
The North America Commercial LED Lighting Market is highly competitive and consists of several major players. Leading players are engaged in strategic acquisitions to enhance their market dominance and are also focusing on product development, which has been a key strategy adopted to move ahead in the evolving market. Some of the developments in the market are:
- October 2021 - Dialight, the global leader in hazardous and industrial LED lighting innovation, in celebration of Energy Awareness Month, announced the availability of one of the world’s most efficient commercially available heavy industrial rated lighting fixture, the Ultra-Efficient Vigilant LED High Bay.
- June 2021 - Signify’s Interact City lighting System helped municipalities in New York by converting the streetlights to connected LEDs. This will help New York to cut energy usage, lower emissions, and create a platform for smart city deployments. Interact City shares data collected from sensors with the IT systems of firefighters, emergency medical services, and other first responders, enabling it to react quickly during any incidents.
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
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- 1 INTRODUCTION
- 1.1 Study Assumptions and Market Definition
- 1.2 Scope of the Study
- 2 RESEARCH METHODOLOGY
- 3 EXECUTIVE SUMMARY
- 4 MARKET INSIGHTS
- 4.1 Market Overview
- 4.2 Industry Value Chain Analysis
- 4.3 Industry Attractiveness - Porter's Five Forces Analysis
- 4.3.1 Bargaining Power of Suppliers
- 4.3.2 Bargaining Power of Consumers
- 4.3.3 Threat of New Entrants
- 4.3.4 Threat of Substitutes
- 4.3.5 Intensity of Competitive Rivalry
- 4.4 Assessment of COVID-19 Impact on the Market
- 5 MARKET DYNAMICS
- 5.1 Market Drivers
- 5.1.1 Increasing Smart Lighting and Human Centric Lighting Applications
- 5.1.2 Increasing Awareness and Emergence of New Business Models, such as Lighting-as-a-Service
- 5.2 Market Challenges
- 5.2.1 Declining Prices of LED Products is Impacting the Profit margin of the vendors
- 5.2.2 Implementation Scenarios and Standards/Regulations
- 6 MARKET SEGMENTATION
- 6.1 By Application
- 6.1.1 Retail Stores (Showrooms, Malls, Shop Lighting, etc.)
- 6.1.2 Office
- 6.1.3 Hospitality Sector (Restaurants, Casinos, Hotels etc.)
- 6.1.4 Architectural Sector (Decorative Lighting Applications)
- 6.1.5 Other Applications (Healthcare and Education)
- 6.2 By Form Factor
- 6.2.1 Troffers
- 6.2.2 Downlights
- 6.2.3 High Bay
- 6.2.4 Track Lights
- 6.2.5 Suspended Pendants
- 6.2.6 Other Type of Form Factors
- 6.3 By Distribution Channel
- 6.3.1 Direct Sales
- 6.3.2 Retail/Wholesale
- 6.4 By Country
- 6.4.1 United States
- 6.4.2 Canada
- 7 COMPETITIVE LANDSCAPE
- 7.1 Company Profiles
- 7.1.1 Cree Inc.
- 7.1.2 Daylight PLC
- 7.1.3 US LED Limited
- 7.1.4 Osram Licht Group
- 7.1.5 Acuity Brands Inc.
- 7.1.6 Hubbel Brands Inc.
- 7.1.7 Signify Holding (Philips Lighting and Cooper Lighting)
- 7.1.8 Technical Consumer Products Inc.
- 8 INVESTMENT ANALYSIS
- 9 FUTURE OF THE MARKET