Lighting as a Service (LaaS) Market size is set to grow exponentially over 2021-2027. This is driven by the myriad benefits of the service including the reduction of the overall lighting-related costs and generation of free cash flow, along with the maintenance of the lighting systems and hardware. Furthermore, the high energy efficiency and low maintenance costs of LaaS as compared to conventional lighting will also amplify the industry demand over the projected timeframe. Lighting as a Service refers to a method of offering lighting retrofit projects without the need to make upfront capital expenses. The service works by charging the customers for a lighting retrofit or upgrade, rolling it into an ongoing purchase plan or agreement, and spreading out the cost over months or years.
Shifting preference towards sustainable lighting solutions and the emergence of LED as an energy-efficient lighting technology are the key trends characterizing the Lighting as a Service (LaaS) market outlook over 2021-2027. Various Lighting as a Service providers, such as Renewable Partnerships, have been offering LED lighting solutions with no associated investment costs to reduce carbon dioxide emissions. Moreover, the rapid advances in technology including IoT will further augment the demand for Light as a Service, given the increasing interest towards the business model from the smart lighting industry.
The industrial end-user segment will hold a significant share in the Lighting as a Service market by 2027. This is a result of the rising incidences of accidents caused by unsafe lighting and insufficient safeguarding in industrial environments. Growth from the segment is also credited to the mounting installation of LED technology across industrial sites to yield superior light quality, cost savings, and improved energy efficiency.
Asia Pacific Lighting as a Service (LaaS) industry will register considerable revenue by 2027, owing to the rapid production of sustainable lighting systems by regional manufacturers. In 2021, Japan-based NICHIA unveiled its 219F series of high-power LEDs, designed for use as an alternative to High Pressure Sodium lamps. Furthermore, increasing expenditure on home alterations and the robust demand for lighting fixtures and lamps in countries like Australia will boost the adoption of the LaaS business model in the region.
Some of the key players in the global Lighting as a Service market include Koninklijke Philips N.V., UltraVolt, Igor, Inc., Itelecom, Osram Licht Ag (ams), General Electric Company, Lunera, Lutron Electronics Co, RCG Lighthouse, Cree Inc., SIB Lighting, Future Energy Solutions, Eaton Corporation, and Digital Lumens, among others. Innovative service launches, collaborations, and acquisitions are some of the prominent strategies being employed by these firms to gain a competitive advantage over rivals in the global market.
The novel coronavirus pandemic and the subsequent implementation of containment measures have dealt a severe blow to commercial real estate demand, especially across the hotel, retail, and office sectors. Reduced store hours and empty office buildings during the crisis have shuttered businesses, in turn hampering the adoption of LaaS for commercial applications worldwide.
However, the significant recovery of the housing sector, due to the increasing new home construction in regions like the Southern US, has supported the sales of lighting fixtures from residential applications. In addition, a spike in home enhancement activity has boosted the consumption of lighting systems. Factors such as these could help the Lighting as a Service industry to grow over the foreseeable future, given the steady increase in the residential lighting business.