Evolution of the Smart Lighting Industry- Market Size and Growth rate

The smart lighting market is projected to reach USD 27.7 billion by 2026 from USD 10.9 billion in 2021; it is expected to grow at a CAGR of 20.5% from 2021 to 2026. The most significant factor driving the growth of this market is the requirement of energy-efficient connected lighting controls and ongoing and upcoming smart city projects in developing economies. This requirement is attributed to the increased awareness toward reducing energy consumption. The advent of integrated lighting control systems, upcoming smart city projects in developing economies, increasing adoption and decreasing cost of LEDs, integration of lighting solutions with smart devices, and growing awareness about energy savings among consumers and governments worldwide are the major factors contributing to the growth of the smart lighting market. On the other hand, factors such as the high initial cost of deployment, and security and reliability issues of smart with IoT-based lighting systems are restraining the growth of the smart lighting market. Growing smart office and smart retail trends, geographical opportunities in APAC and RoW regions, development of human-centric lighting solutions, growing demand for PoE-based lighting solutions in commercial and healthcare applications, the rapid transition from traditional lighting to connected lighting, and the growing inclination toward energy-efficient lighting solutions are the major opportunities for the smart lighting market.

The smart lighting market in APAC is expected to grow at the highest CAGR during the forecast period. This growth can be attributed to the rapid infrastructure building activities being undertaken in APAC, mainly in China, where smart lighting paves the way for the modernization of infrastructure. The modernization and development of infrastructure such as smart cities across the region would also drive the demand for smart streetlights, thereby driving the market for smart lighting in this region. Europe is projected to hold the largest market share of smart lighting market during the forecast period. The smart lighting market in Germany is expected to dominate the European smart lighting market during the forecast period. It held the largest share in 2020, mainly due to its robust economy, high standard of living of its citizens, and its commitment to reduce its carbon footprint. The adoption of Industry 4.0 is expected to further boost the market for smart lighting for indoor end-use applications in the country. The increasing innovations and the presence of companies such as Osram Licht AG in the region also boost the smart lighting market in Germany.

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Driver: Improved acceptance of standard protocols for lighting control systems

A standard protocol defines the methods for data representation, signaling, authentication, and error detection to ensure control or enable the connection, communication, and data transfer between computing or control endpoints. Digital protocols may be either one-way or two-way. Two-way (bidirectional) protocols allow luminaires or devices to exchange data for effective communication. At present, ZigBee and DALI are the predominantly installed protocols in lighting solutions. The adoption of standard protocols such as KNX and DALI for controlling applications has improved the operational efficiency of lighting systems.

Opportunity: Geographical opportunities in APAC and RoW regions

APAC is expected to be the fastest-growing market for smart lighting. The smart lighting market has enormous growth potential in this region, as connected lighting systems are rapidly being adopted in different applications. Lighting manufacturers based in China are giving fierce competition to companies based in North America and Europe. Chinese cities are offering a perfect mix of cheap land, good infrastructure, and abundant workforce to attract investments in industrial development. China’s New-Style Urbanization Plan is promoting a greener and more environment-friendly society. This will further increase the adoption of smart lighting within the country.

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