It’s cliché in the lighting industry to state that there has been a light bulb moment, however the evolution of light bulbs from cheap incandescent bulbs to affordable LED lighting solutions has had a massive impact on the lighting industry as a whole and the trend is set to continue. For businesses, it brings lucrative opportunities while playing to the card of sustainability for corporate responsibility. Demands for sustainable solutions and lower energy prices have made LED lights become the lighting commodity of choice. As LED light bulbs and their energy consumption costs fall, a sharp rise in demand is expected across the residential and commercial markets. This has created a chasm in the lighting market which lighting manufacturers are keen to exploit over the coming years.
Political forces are at play
The Paris Agreement; which was signed by more than 190 countries to commit to further emission cuts of 20% by the year 2020 in order to combat global warming. The Australian government is leading by example by offering subsidies at State levels (such as Victoria’s VEET and New South Wales ESS initiatives). Even the Indian government has taken action by planning to purchase 200 million LED light bulbs by the end of 2016 and has already issued tenders for businesses to retrofit streetlights across the country.
Furthermore, the World Bank launched the initiative Lighting Africa program to enable more than 250 million people across sub-Saharan Africa to gain access to sustainable lighting solutions, in which LED lights will play a huge role in the success of the project.
Impact on the lighting market
UK based lighting company Starlite claim that LED lighting is the greatest development in the lighting industry since Thomas Edison presented the world with an electric lamp in 1880. In today’s $110 billion USD lighting market, LED lights are estimated to make up $30.5 billion USD. Analysts have predicted the LED market to eat away at the market share in the lighting industry, as can be seen in the graph below.
Based on the growing market, several businesses are working to penetrate the market. LEDinside.com’s feature story ‘Silent rise of high-end commercial lighting in the LED market’ supports claims about rising demands for LEDs.
PWC’s 2012 report shared insights into increased venture capitalist funding by over 80% in 12 months in order for LED providers to become more competitive, since more businesses were predicted to enter the market.
Additionally, Australian LED specialists LEDified are also penetrating their local market with their eco-friendly and cost reduction based sales model in order to grow their market share. The core of their success is due to the value model that they can demonstrate to potential customers, as highlighted below.
Their product range of LED light tubes and commercial LED downlights have been at the heart of LEDified’s penetration of the LED lights market in Australia.
Social awareness about sustainable initiatives will continue to be at the forefront.
Many businesses and residents are taking sustainability seriously. Brands are realigning their brand values to compliment sustainable activities that can be implemented into their business model. Sustainable motives are more conscious among consumers, however businesses that are able to compliment these with pricing and cost motivators will be in a strong position to ride the commercial growth of sustainable products. LED lights are already at the forefront of the trend and it has created a billion dollar industry that will continue to be driven by social and market forces.
The future is bright for LEDs in the lighting industry. Businesses who are able to position their brand and business model to compliment these lighting trends will not only fill the new chasm in the lighting market, but will pioneer the new era of wealth that sustainable lighting products provide.