Lighting Efficiency and the Path to Net-Zero Cities

 

The global luminaire and lighting control market is on a strong growth trajectory, fueled by the rising demand for energy efficiency, smart building solutions, and advanced lighting technologies. Valued at US$ 87.4 billion in 2022, the market is projected to grow at a CAGR of 5.8% between 2023 and 2031, reaching US$ 144.5 billion by the end of the forecast period.

As cities modernize, electricity costs rise, and sustainability becomes a priority, both governments and private sectors are accelerating the adoption of advanced lighting systems. From urban streetlights to connected smart home solutions, luminaires with integrated control technologies are reshaping the way the world manages illumination.

 

Analyst Viewpoint: Why the Market Is Growing

The shift toward energy conservation, combined with infrastructure development in urban areas, is at the core of the market’s expansion. Governments are actively phasing out inefficient lighting technologies, introducing stricter energy-efficiency standards, and investing in large-scale smart city projects.

For urban communities, luminaires and lighting controls are not just about illumination—they are tools for improving safety, reducing operational costs, and creating dynamic, adaptive lighting environments. This market growth is also supported by the rise of smart homes, where connected lighting systems are increasingly integrated with home automation platforms.

 

Energy Conservation: A Key Growth Driver

Lighting accounts for a significant portion of global electricity consumption. As energy prices soar, cutting energy costs has become a priority for municipalities, businesses, and homeowners alike. According to a 2020 report by the DesignLights Consortium (DLC) and Northwest Energy Efficiency Alliance, luminaire and lighting controls can deliver energy savings exceeding 60% on average.

Governments across developed regions are actively:

• Promoting LED adoption through subsidies and public awareness campaigns
• Banning inefficient lighting products via import tariffs and regulatory measures
• Encouraging smart lighting in public and commercial infrastructure

In street lighting, the shift to energy-efficient LED-based luminaires with smart controls has proven to significantly cut costs while reducing carbon footprints. Many cities are now rolling out adaptive lighting systems that automatically adjust brightness based on traffic flow, weather conditions, or time of day.

 

The Smart Home & Smart Building Boom

The integration of lighting controls into smart building systems is accelerating. According to MIT research, lighting represents around 14% of a building’s total energy use—making it a prime target for efficiency improvements.

Smart lighting solutions offer multiple benefits:

• Remote control and automation via mobile apps or voice assistants
• Adaptive brightness based on occupancy or daylight
• Integration with HVAC and security systems for complete building automation

In residential sectors, smart lighting is often marketed for its convenience and aesthetic appeal. In commercial and industrial settings, the focus is on operational savings, productivity enhancement, and sustainability.

For instance, in August 2023, NEC Corporation India launched a Smart City project in Tirupati, India, which included advanced lighting control solutions designed to improve safety, energy efficiency, and urban aesthetics.

 

Challenges: High Initial Costs

Despite the benefits, the high upfront cost of smart lighting systems remains a barrier, particularly in price-sensitive markets.

• LED lights can cost around US$ 35 each, while compact fluorescent bulbs range from US$ 2 to US$ 15.
• Smart lighting controls and sensors add additional expenses in both hardware and installation.

However, the long-term energy savings and reduced maintenance costs often outweigh the initial investment, making these solutions increasingly appealing for governments, corporations, and eco-conscious consumers.

 

Regional Outlook

Asia Pacific: Leading the Market

Asia Pacific accounted for the largest share in 2022, thanks to massive investments in infrastructure development, smart city initiatives, and urban modernization projects.

India, for example, has seen significant Foreign Direct Investment (FDI) inflows in construction—US$ 26.17 billion in development projects and US$ 26.30 billion in infrastructure between April 2000 and December 2021 (DPIIT). Such investments are directly fueling demand for advanced lighting systems.

China and Japan are also driving adoption, particularly in public infrastructure, transportation hubs, and high-end residential projects.

 

Competitive Landscape

The luminaire and lighting control industry is competitive, with major players focusing on M&A activities, partnerships, and product innovation. Key market participants include:

• General Electric
• Signify Holding
• WOLFSPEED, INC.
• Legrand S.A.
• OSRAM GmbH
• Eaton Corporation
• Lutron Electronics Co., Inc.
• Acuity Brands, Inc.
• Hubbell Incorporated
• LSI Industries Inc.

Recent Developments:

• Nov 2023: iGuzzini expanded its Living Vibes collection with the BeTwo luminaire, blending professional lighting design with residential and hospitality environments.
• Apr 2023: ams OSRAM partnered with Musco Lighting to deploy OSCONIQ LEDs in the Armin-Wolf-Arena in Germany, enhancing sports lighting performance.

 

Future Outlook

The luminaire and lighting control market is set for steady growth over the next decade, driven by:

• Rising urbanization and smart city projects
• Government policies favoring energy-efficient products
• Technological advances in wireless lighting control systems (Wi-Fi, Bluetooth, ZigBee)
• Consumer demand for personalized, automated lighting

With the increasing adoption of AI-driven lighting management and IoT-enabled controls, the future will see lighting systems becoming even more intelligent—capable of learning user preferences, predicting energy needs, and seamlessly integrating into connected infrastructure.