LED lighting market grows at the speed of light

LED lighting market grows at the speed of light

Market news |
By eeNews Europe

Currently the market penetration for LED lighting is 3 percent at best, said Frost & Sullivan Senior Research Analyst Neetha Jayanth. The long way to go to the dominant lighting technology will be covered at high speed: By 2017, the global market for LED lighting technology products will be as big as $1.89 billion, up from $ 491 in 2010. The primary growth driver will be technological improvements and legal regulations, Jayanth said. These improvements will facilitate a more sweeping deployment of LEDs in lighting applications.

In Europe and North America legislators already have taken measures to phase out production, sales and utilization of incandescent bulbs and establish efficiency criteria in lighting technology. These measures will by time cause incandescent technology to be displaced by more energy efficient technologies including LEDs.

Room for improvements of LEDs are efficiency (still), light quality, color rendering and temperature management. While engineers across the world are working in improving these properties, LEDs will remain the most expensive lighting technology at the market. The price difference between LEDs and the its main competitor in terms of energy efficiency, the compact fluorescent lamp (CFL), is still significant – in favor of the CFL. While the price difference will narrow in the long run, it will delay broader acceptance among consumers. The market for LED lighting is price sensitive in all its segments, commercial and private usage.

Driving the acceptance is the fact that due to its better energy efficiency LED lights lead to lower operating costs. The upfront investment however is still rather high, slowing down market acceptance, said Jayanth. The ability of the vendors to realize price reductions therefore will be a critical factor for the market grwoth.

"As long as there are no economies of scale for LED lighting, the market conditions will remain difficult", Jayanth explained. "Vendors could focus on bringing higher-quality products to the markets – that is lamps with more lumens per watt at the constant price level. This will reduce the payback period for the consumers, and LEDs will become more competitive with regard to other energy efficient technologies."

The market researcher suggested that manufacturers and sales channels to collaborate in strengthening the conscience of the consumers. In this context, it should be pointed out that LEDs are associated with much lower maintenance costs than any other lighting technology. This consciousness could help to do overcome the unwillingness to make the upfront investment.

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