Lighting as a Service (LaaS) Market Size, Industry Analysis Report, Regional Outlook (U.S., Canada, UK, Germany, France, Italy, Russia, Spain, China, India, Japan, Australia, Brazil, Mexico, GCC, South Africa), Growth Potential, Competitive Market Share & Forecast, 2019 – 2025
Report ID: GMI4251
Lighting as a Service Market size is set to rise exponentially during the forecast period driven by need for low-cost and energy-efficient lighting systems. Conventional lighting sources, such as fluorescent tube lights and mercury vapor bulbs (which consume more energy and have health risks), are increasingly being replaced by smarter and energy-efficient lighting solutions such as LEDs. The gaining popularity of LED-based lighting has caused many enterprises to switch from conventional lighting, but they are experiencing problems such as high upfront costs, lack of expertise, and maintenance issues. LaaS providers are leveraging the opportunity by providing such enterprises with subscription-based and low-cost lighting systems including annual maintenance coverage. The LaaS works on a pay-as-you-go (PAYG) model that requires no upfront investment on the part of the enterprise but instead charges a monthly subscription fee. However, the energy savings per month after deploying LaaS are usually greater than the cost of Lighting as a Service subscription. These energy savings are an additional cash flow for enterprises.
Another major driving force for the Lighting as a Service market is the advantage of ownership of the infrastructure. As LaaS is not a lease, enterprises will be owners of the new lighting system once the original installation cost is covered. This option is especially beneficial for small enterprises that cannot afford lease or loan facilities for an infrastructure upgrade, making Lighting as a Service an attractive option for them.
The Lighting as a Service market is currently in its nascent stage and the lack of awareness by enterprises has hindered its growth. However, the integration of IoT with LaaS is expected to create opportunities in the market. With IoT-based Lighting as a Service systems, employees can personalize lighting and temperature at their workspaces using a smartphone app, creating a better work environment. The IoT-based LaaS will also help facility managers track usage patterns of lights, reducing them where not required and significantly decreasing the building’s carbon footprint.
The commercial enterprise is the leading segment in the Lighting as a Service (LaaS) market. This is due to their increased migration to the subscription model of LaaS rather than owning and maintaining the lighting infrastructure. The municipal sector is expected to have the fastest growth rate due to the adoption of LaaS by major cities and towns that are attracted by its energy-saving benefits over traditional lighting solutions. The indoor lighting segment has the highest market share due to the rapid adoption of Lighting as a Service in commercial offices and business venues.
North America is the leading region in the Lighting as a Service market. The rapid development of smart cities in the U.S. has surged the need for energy-efficient lighting systems. Nearly 40% of a city’s energy budget in the U.S. is consumed by street lighting and LaaS-based efficient lighting can save up to 50% of these costs, making it an attractive option for several U.S. Municipal corporations. The growing demand for energy-saving lighting solutions by large warehouses and manufacturing units in the U.S. has also accelerated the adoption of these types of services. Also, as most of the U.S. enterprises are moving toward IoT-based solutions, they find it easier to adopt Lighting as a Service due to its ability to integrate with IoT. This provides additional benefits such as remote access to light levels, customized illumination, and color warmth.
Europe is the fastest-growing region in the Lighting as a Service market due to the widespread adoption of the LaaS model by the UK and German enterprises. The European Union draft on Circular Economy Package, providing benefits to enterprises that use recyclable energy solutions, has made LaaS a viable energy-saving option for many European firms. Asia Pacific has also seen steady growth as Indian and Chinese governments are endorsing smart lighting solutions on a wide scale. The UJAALA scheme by the Indian government distributed 350 million LED bulbs as of June 15, 2019, paving a way for the adoption of Lighting as a Service services in this region.
Some of the major players operating the Lighting as a Service market are Digital Lumens, Eaton, Future Energy Solutions, SIB Lighting, Cree Inc., RCG Lighthouse, Lutron Electronics Co., Lunera, General Electric Company, Osram Licht Ag, Itelecom, Igor Inc, UltraVolt, and Koninklijke Philips N.V. With the market still being in its early stages, LaaS providers are investing in R&D for integrating IoT-based lighting and improving the efficiency of semiconductor chips in LED lights. In 2017, Cisco invested in R&D development of NuLED, an American manufacturer of low-voltage LEDs, for app-based lighting controls of its server rooms.
Lighting as a Service (LaaS) Market, By End User, 2014-2025 (USD Million)
Lighting as a Service Market, By Installation, 2014-2025 (USD Million)
LaaS Market, By Component, 2014-2025 (USD Million)
- Luminaire and Control Equipment
- Software and Communication System
- Maintenance and Other Services
The above information has been provided for the following regions and countries:
- North America
- Asia Pacific
- Australia & New Zealand (ANZ)
- South Korea
- Latin America
- South Africa
- Cree Inc.
- Digital Lumens
- Future Energy Solutions
- General Electric Company
- Igor Inc
- Koninklijke Philips N.V.
- Lutron Electronics co.
- Osram Licht Ag
- RCG Lighthouse
- SIB Lighting
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