The global smart lighting market size is estimated to be USD 10.9 billion in 2021 and projected to reach USD 27.7 billion by 2026, at a CAGR of 20.5% during the forecast period. In recent years, the market for smart lighting has experienced significant growth, primarily due to the ongoing and upcoming smart city projects in developing economies, improved acceptance of standard protocols for lighting control systems, and the introduction of new features such as data analytics and API event generation. These factors will drive market growth through the end of the forecast period. Moreover, the surge in the demand for IoT-enabled lighting fixtures and smart lighting solutions, and increasing use of LED lights and luminaires in outdoor lighting will drive the demand of smart lighting in the near future.
Market Dynamics:
Driver: Increasing use of
LED lights and luminaires in outdoor lighting
The key reasons for installing
LEDs over conventional lights include energy and cost savings. LEDs are
replacing conventional light sources such as fluorescent, high-intensity
discharge (HID), incandescent, and high-pressure sodium lamps in outdoor
lighting applications. Outdoor lighting applications primarily include
highways, roadways, public places, and stadiums. According to the US DOE, LED
lighting would represent 86% of all lighting sales by 2035 due to the benefits
offered by LED lights over their conventional counterparts.
Although LED light sources are
energy efficient, over 30% of lighting energy consumption would be wasted if
appropriate controls are not used. Lighting control systems combined with LEDs
could increase the life of an LED light source, which would minimize
maintenance costs, further reducing the duration of the payback period. Hence,
LED lighting solutions equipped with a dynamic lighting control system would
reduce the amount of lighting energy consumed. These advantages have encouraged
construction enterprises associated with building highways and stadiums to
deploy LED lighting systems.
Restraint: High initial
costs of smart lighting equipment and accessories
Though smart lighting systems
are energy-efficient lighting solutions that can save costs in the long run,
the initial cost is high due to the cost of the equipment and the cost of
integration and installation services. Smart lighting systems comprise various
hardware components such as dimmers, switches, sensors, control systems, and
software. Hence, the installation cost of smart lighting is higher than that of
conventional lighting systems. This is primarily due to the requirement for
highly expensive software, control systems, and LED light sources for smart
lighting solutions. This factor hampers the adoption of smart lighting control
systems. However, factors such as the falling prices of LEDs and energy savings
by installing energy-efficient lighting control systems are expected to
minimize the impact of this restraint in the near future.
Opportunity: Development
of human-centric lighting solutions
Lighting solutions have a
biological and emotional impact on human beings. Human-centric lighting
solutions can boost the well-being, mood, and health of individuals as
they can be adjusted in terms of directions, correlated color temperatures
(CCTs), and illuminance. These lighting solutions can improve concentration,
safety, and efficiency in workplaces and educational environments. In
healthcare applications, human-centric lighting solutions can support healing
processes, prevent chronic diseases in individuals with irregular daily
routines, and improve the overall sense of well-being among patients. The
increasing demand for human-centric lighting solutions has created new growth
prospects for the manufacturers of smart lighting solutions. Leading smart
lighting manufacturers such as Signify (Netherlands), and Hubbell (US) are
developing luminaires that support the tuning of light according to circadian
rhythms and the emotional requirements of humans.
Challenge: Interoperability
issues between different network components
Currently, lighting control
systems are facing the biggest challenge of integrating multiple interoperable
technologies under one roof. Users have a wide range of options to choose from when
it comes to lighting control; however, there are no uniform standards, so it is
difficult to integrate the solutions they have. A lack of interoperability and
incompatibility among components causes problems for end users. Hardware and
software for traditional lighting control systems are typically manufactured by
the same company, while controls for connected lighting solutions are developed
by different businesses. Lighting systems suffer from
interoperability problems, resulting in communication problems between
different network components. To develop compatible products, standard
protocols must be established. It is being attempted by a number of
organizations, including the ZigBee Alliance and the Connected Lighting
Alliance, to standardize the protocols used in connected lighting technology.
This would enhance the ability for luminaires to collect and share data for
analytics purposes through the use of connected technology.
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In smart lighting systems,
ZigBee, EnOcean, Z-Wave, and Wi-Fi are the most common wireless technologies.
ZigBee is one of the most widely used wireless communication protocols among
system manufacturers. In order to gain a competitive advantage in the market,
all manufacturers follow their own proprietary protocols and standards. Due to
the intense competition in the market, common standards and communication
protocols cannot be developed, thus preventing the growth of the market.
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