High costs, quality concerns thwart market for energy-efficient lighting
In its recent study titled "European Energy Efficient Lighting Market", Frost & Sullivan Research Associate Vivek Wali comes to the conclusion that the high purchase price for energy efficient lighting technology currently is slowing down the market acceptance, in particular in the price sensitive segment of private households. "Private consumers, which represent the largest end user segment in the lighting market, also favor the light quality of incandescent bulbs over more energy efficient alternatives", Wali said.
Currently, compact fluorescent (CFL) lamps are the biggest product segment. However, Frost & Sullivan expects that the LED market will continue to grow swiftly, boosted by improved technology and falling prices. For 2011, the market watchers estimate the European market volume to 1.15 billion US dollars; in 2018 they expect this volume to grow to 1.92 billion dollars. The goal of the European Commission of reducing the carbon oxide emissions by a margin of 20 percent until 2020 has led to the adoption of several directives such as the EuP Directive on Energy Using Products, which set standards as to the energy efficiency of buildings and the deployment of lighting products. For this reason, incandescent bulbs and other inefficient light sources are about to be phased out.
In order to secure a good position in the market for energy efficient lighting, vendors need to implement a competitive pricing strategy and offer reliable, high-quality products, Wali explains. The manufacturers must guarantee that their products meet the promises regarding light quality and lifetime the vendors spread in their advertising. "While the price for CFL and LED lamps is determined to high degree by the market pressure in the upstream segment of the value chain, it is up to the vendors to ensure the quality of their products", Wali said. "In addition, they should focus on keeping competitive price levels and thus gain market share".
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