LEDs to make up half of commercial lighting market within 10 years

Light Emitting Diodes (LEDs) will account for almost half of the $4.4bn a year commercial lighting market within 10 years, according to a major new report published this week.

The study from analyst firm Pike Research, titled Energy-Efficient Lighting for Commercial Markets, predicts that by 2020, LED lighting will account for 46 per cent of all lighting in the commercial, industrial, and outdoor stationary sectors.

The rapid expansion in the LED market will be driven by continually falling costs in solid-state lighting, combined with performance increases that will see adoption of the technology reach an inflection point within the next five years, according to Clint Wheelock, managing director at Pike Research.

Wheelock said that LED lighting is already widely used in traffic signals and exit signs, predicting that those markets will become saturated in the next few years. He said that as a result LED manufacturers will switch their attention to concentrate on the outdoor stationary sector, followed by lighting for retail, professional and institutional buildings.

However, the report predicted that other forms of energy efficient lighting will continue to play a sizable role in the market until the cost of LED lighting falls substantially. For example, it said fluorescent lamps will overtake incandescent lamps as the most popular form of lighting technology before LED lighting truly reaches the mainstream.

Lighting accounts for 17.5 per cent of all electricity use within the United States, according to Pike Research, adding that the majority of lighting energy is consumed by commercial buildings.

The news comes as the Indian government begins to explore ways to reduce the cost of LED lighting in a bid to establish the country as a major manufacturing hub for the technology.

Its National Manufacturing Competitiveness Council has formed a new committee that has recommended aggregating demand for LEDs in various Indian states in order to encouraging domestic manufacturing and reduce costs.

Domestic manufacturing of LEDs, starting with the non-semiconductor chip portion, is crucial to bringing down costs in region, the committee said. According to reports, the committee is hoping to put in place targets for price and performance in LED applications such as institutions and public lighting, in consultation with manufacturers and potential customers.