Light emitting diodes are becoming the most dominant lighting technology - Global Revenues will approach $2 billion by 2017
From a mere 3 per cent penetration in the lighting market, light emitting diodes (LEDs) are set to grow into the most dominant lighting technologies in the future.
New analysis from Frost & Sullivan (http://www.buildingtechnologies.frost.com), World LED Lighting Market, finds that the market earned revenues of $491.1 million in 2010 and estimates this to reach $1,895.5 million in 2017.
"The world LED market will expand strongly, driven largely by improvements in technology," notes Frost & Sullivan Senior Research Analyst Neetha Jayanth. "Such advances will enable their wider application in illumination and will be further reinforced by measures adopted by authorities to support energy efficient lighting."
In Europe and North America, measures have been adopted to phase out incandescent lighting or impose minimum efficiency criteria on lighting technologies. This will lead to incandescent lighting being replaced by more energy-efficient equivalents such as LEDs.
"Simultaneously, suppliers across the globe are undertaking to improve the quality of LED lamps by enhancing their efficiency, quality of light output, color rendition and thermal management," states Jayanth. "Thus, LED lamps are set to become better equipped for use in functional lighting across all building sectors, even as public authorities reinforce the need to employ them."
While the improvements in LED will make it a better technology in the long run, it remains the most expensive lighting technology in the market. Currently, the price difference between LED lamps and other energy-efficient technologies such as compact fluorescent lamp (CFL) is significant. Although such price differences are anticipated to narrow over time, it will still dampen more widespread adoption by end users.
The market for indoor lighting – both residential and commercial – is price sensitive. These segments are untapped and offer considerable potential for future growth. LEDs, being energy efficient involve lower maintenance costs for the user. However, the initial investment is very high and thus restrains uptake. Unless suppliers can work on reducing prices, market growth could be hampered.
"However, price reduction is difficult till economies of scale enter the market," explains Jayanth. "Instead, suppliers could focus on providing better quality lamps – that is lamps with increased lumens per watt – at the prevailing prices, so that payback period on the investment is reduced and the product becomes competitive with competing energy-efficient technologies."
At the same time, manufacturers and distributors will need to work together to increase consumer awareness about the benefits of using LEDs and the energy savings that could result in the long run from its adoption. Emphasis on the fact that LEDs are likely to enable the user to achieve the lowest maintenance cost needs to be highlighted, so that the initial cost is not perceived as a hurdle in adopting LEDs.
"The technical advantages of LED need to be highlighted," concludes Jayanth. "Equally important is the need to stress on the long-life of the lamp."
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