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The industrial and commercial LED lighting market size is estimated to grow by USD 13.70 billion at a CAGR of 7.08% between 2023 and 2028. LED lighting has emerged as a preferred choice for various applications due to its declining manufacturing costs and superior energy efficiency. Traditional lighting technologies, such as halogen, incandescent, fluorescent, and High-Intensity Discharge (HID) lamps, are being phased out due to their higher energy consumption and shorter lifespan. In industries and hazardous areas, the adoption of LED lighting is increasingly popular due to its robustness and longevity. LED lights are resistant to shock, vibration, and extreme temperatures, making them ideal for use in challenging environments. Furthermore, LEDs emit light in specific directions, reducing the need for reflectors and diffusers, thereby minimizing the risk of shattering and potential hazards. The shift towards LED lighting is not only cost-effective but also environmentally friendly, as it consumes less energy and has a longer lifespan compared to traditional lighting technologies.
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The market is witnessing significant growth due to the increasing adoption of energy-efficient lighting solutions. Traditional incandescent lights, which use electrical energy to produce heat energy and light energy, are being gradually replaced by LED lights. Semiconductor technology is the backbone of LED lighting, which converts electrical energy into light energy more efficiently. LED lamps, available in various forms such as compact fluorescent lamps and LED fixtures, are gaining popularity in sectors like commercial offices, hospitality & Leisure, retail outlets, healthcare facilities, factories, warehouses, and offices. LED lighting is used for both indoor and outdoor applications, including backlighting and luminaries. Direct sales and wholesalers are major distribution channels for industrial and commercial LED lighting. Architects and integrators also play a crucial role in the market by specifying and designing LED lighting systems. Retrofit kits are another significant growth area, as they enable the replacement of old incandescent bulbs with energy-efficient LED alternatives. The market for industrial and commercial LED lighting is diverse, catering to various sectors like retail spaces, hospitality & Leisure, healthcare facilities, and factories. The adoption of LED lighting is expected to continue to grow due to its energy efficiency and longer lifespan compared to traditional incandescent bulbs. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Declining manufacturing cost of LED is notably driving market growth. The market has experienced significant growth due to the declining manufacturing cost of Light-emitting diodes (LEDs). This cost reduction is primarily driven by the decreasing Average Selling Prices (ASPs) of chips and components used in the production of LED devices. The decline in LED manufacturing costs is also resulting in reduced initial installation costs for LED lamps and fixtures, thereby accelerating their adoption in various sectors.
Furthermore, indoor applications, such as healthcare facilities, offices, and retail spaces, as well as outdoor applications, including factories, warehouses, and outdoor lighting, are benefiting from the shift towards energy-efficient LED solutions. Government initiatives, such as tax credits, subsidies, and rebates, are also promoting the adoption of LED lighting. The use of SiC Power Semiconductors in LED manufacturing is further driving cost reductions and improving efficiency. Smart lighting controls are also gaining popularity, with smart LED solutions offering enhanced energy savings and improved lighting quality. Overall, the declining manufacturing cost of LEDs is set to drive the growth of the market in the coming years. Thus, such factors are driving the growth of the market during the forecast period.
Growing traction for intelligent lighting systems is the key trend in the market. The market is witnessing significant growth due to the adoption of energy-efficient lighting solutions, such as Light-emitting diodes (LED), in various sectors including factories, warehouses, offices, retail spaces, and healthcare facilities. LED Fixtures offer numerous advantages over traditional lighting systems, such as Indoor and Outdoor LED lighting, which provide superior energy efficiency, longer lifespan, and lower maintenance costs. The use of SiC Power Semiconductors in LED lighting enables better heat dissipation and higher power handling capabilities. Smart lighting controls, including Smart LED solutions, are gaining popularity due to their ability to adapt to changing space needs. These systems offer features such as dimming, timer, and color-changing functionalities, enabling users to customize lighting according to their preferences. .
Tax credits, subsidies, and rebates offered by governments and energy companies further incentivize the adoption of energy-efficient lighting solutions. Smart LED bulbs offer additional benefits, such as color change and improved ambiance, making them an attractive option for both residential and commercial applications. These bulbs can be controlled via a hub and mobile apps, allowing users to manage lighting remotely and efficiently. The integration of sensors and controls in LED lighting systems enhances their functionality and adaptability, making them a preferred choice for modern lighting requirements. Thus, such trends will shape the growth of the market during the forecast period.
Limited thermal tolerance of LEDs installed in industrial facilities is the major challenge that affects the growth of the market. Industrial and commercial lighting markets have witnessed a significant shift towards light-emitting diodes (LED) due to their energy-efficiency and long lifespan. However, the use of LEDs in industrial and commercial settings, particularly for indoor and outdoor lighting, presents unique challenges. High temperatures, moisture, and hazardous environments common in factories, warehouses, healthcare facilities, offices, and retail spaces can negatively impact the performance and longevity of LED fixtures.
Furthermore, SiC power semiconductors in LED drivers help dissipate heat, but when temperatures exceed the case temperature (Tc) point, the internal temperature of the driver rises, potentially damaging the LED. Premature failure of LED lamps and fixtures connected to external LED drivers can result from high operating temperatures. To mitigate these challenges, energy-efficient lighting solutions incorporate smart lighting controls, tax credits, subsidies, and rebates for the adoption of LED technology. Smart LED solutions offer energy savings, improved lighting quality, and enhanced safety features, making them an attractive investment for businesses. Hence, the above factors will impede the growth of the market during the forecast period
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Dialight Plc - The company offers industrial and commercial LED lighting such as ProSite Floodlight.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market share growth by the LED lamps segment will be significant during the forecast period. The global market is witnessing significant growth due to the declining preference for incandescent light bulbs and the increasing adoption of energy-efficient LED lamps. LED lamps, which include compact fluorescent lamps (CFLs), light-emitting diodes (LEDs), organic light-emitting diodes (OLEDs), and backlighting, accounted for the largest and fastest-growing product segment in 2023.
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The LED lamps segment was valued at USD 15.40 billion in 2018. The primary reason for this growth is the gradual phase-out of traditional filament bulbs and the implementation of regulations limiting their use in favor of more energy-efficient alternatives. LED lamps are increasingly used for indoor and outdoor lighting applications, including ceiling lights, display, and LED fixtures, in various sectors such as commercial offices, retail, hospitality & leisure, healthcare, energy consumption, and light-manufacturing production. The long shelf life, lower energy consumption, and reduced pollution make LED lamps a preferred choice over traditional lighting. The market is driven by the demand for smart lighting systems, retrofit kits, and the increasing role of direct sales, wholesalers, architects, and integrators in promoting the adoption of LED lighting solutions. LED chips and components are also witnessing significant growth due to the increasing production of LED lamps.
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Europe is estimated to contribute 27% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The European region dominates the market due to the presence of numerous industries, such as automotive, power, construction, and mining, which have adopted LED lighting solutions. For instance, Volkswagen AG, a German automaker, opened a production factory in Poland to manufacture LED-equipped vehicles in collaboration with Austrian lighting manufacturer Zumtobel Group. Europe's focus on energy efficiency is further driving the market growth, with initiatives like Ireland's Green Line Infrastructure Upgrade Project extending LUAS platforms by 10m and integrating LED lighting. LED lighting, including compact fluorescent lamps, backlighting, organic light-emitting diodes (OLED), and LED chips, is increasingly replacing traditional incandescent light bulbs due to their energy efficiency and longer shelf life. LED fixtures and luminaries are used extensively in indoor and outdoor lighting applications, such as commercial offices, retail, hospitality & leisure, healthcare, and industrial manufacturing production. LED components, including filaments, semiconductors, and smart lighting systems, are also gaining popularity for their energy-saving capabilities and ability to reduce pollution. Direct sales, wholesalers, architects, integrators, and retail outlets are key players in the market, with color rendering index and energy consumption being crucial factors in the purchasing decision.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion " for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
Industrial Lighting Market: Analysis APAC, Europe, North America, South America, Middle East and Africa - US, China, Japan, Germany, UK - Size and Forecast
Led Lighting Market: Analysis APAC, Europe, North America, Middle East and Africa, South America - US, China, Japan, Germany, UK - Size and Forecast
India LED Lighting Market: by Product, Application, and Distribution Channel - Forecast and Analysis
The market is witnessing significant growth due to the shift from traditional Incandescent light bulbs to energy-efficient LED lighting solutions. Unlike Incandescent bulbs that produce light through a filament and emit a large amount of Heat energy, LED lighting converts Electrical energy into Light energy using Semiconductor technology. This results in longer Shelf life, lower Energy consumption, and reduced Pollution. LED lamps, including compact fluorescent lamps, Backlighting, and Organic Light-emitting Diodes (OLED), are increasingly being adopted for Indoor lighting and Outdoor lighting applications. LED fixtures, which house LED chips and other LED components, are used in various sectors such as Industrial lighting, commercial lighting, and Smart lighting systems. For effective indoor lighting and outdoor lighting, a variety of options are available, including compact fluorescent lamp, cold cathode fluorescent lamp, and LED fixture, each providing different benefits in terms of energy efficiency and brightness.
Furthermore, capital budgets for energy-efficient lighting solutions are on the rise, driving demand for LED lamps and fixtures. Direct sales, wholesalers, architects, integrators, and commercial offices are key buyers of these products. Retail outlets, hospitality & Leisure, healthcare, and energy-intensive manufacturing industries are also significant consumers of LED lighting. The market for LED lighting is diverse, with various types of luminaries, including Ceiling lights, Display lights, and LED chips, catering to different applications. Retrofit kits are also gaining popularity for their cost-effectiveness and ease of installation. The Color rendering index is a crucial factor in selecting the right LED lighting solution for various applications. Access Fixtures and other LED lighting manufacturers are continuously innovating to meet the evolving needs of different industries.
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Market Scope |
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Report Coverage |
Details |
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Page number |
139 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 7.08% |
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Market growth 2024-2028 |
USD 13.70 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
6.49 |
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Regional analysis |
Europe, APAC, North America, Middle East and Africa, and South America |
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Performing market contribution |
Europe at 27% |
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Key countries |
US, China, Germany, India, and UK |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Acuity Brands Inc., Cree LED, DECO Lighting Inc., Dialight Plc, Eaton Corp. Plc, ELBA SA, Havells India Ltd., Hubbell Inc., Iwasaki Electric Co. Ltd., Koninklijke Philips N.V., LSI Industries Inc., Luxon SP ZOO, OSRAM Licht AG, Panasonic Holdings Corp., Savant Systems Inc., Signify NV, Syska Led Lights Pvt. Ltd., Toshiba Corp., Wolfspeed Inc., and Zumtobel Group AG |
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Market dynamics |
Parent market analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for Market forecast period |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product Type
7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Opportunity/Restraints
10 Competitive Landscape
11 Competitive Analysis
12 Appendix
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