The Role of Government Policies in Driving Market Adoption

 

The global luminaire and lighting control market is entering a decade of strong expansion as energy conservation, urbanization, and smart technology adoption converge. Valued at US$ 87.4 billion in 2022, the market is forecast to grow at a CAGR of 5.8% from 2023 to 2031, reaching nearly US$ 144.5 billion by 2031.

According to industry analysts, the market’s progress is shaped by rising awareness of sustainable energy practices, surging electricity costs, and the rapid adoption of smart homes and smart buildings worldwide.

 

The luminaire and lighting control market growth is fueled by the demand for efficient lighting solutions in residential, commercial, and industrial spaces. Modern lighting systems are no longer limited to illumination—they combine sensors, controllers, and automation features to provide flexibility, safety, and significant energy savings.

Urban communities, in particular, are emerging as the leading adopters. With rising living standards, governments and private organizations are prioritizing energy-efficient lighting solutions that meet both economic and environmental goals.

 

Energy Conservation as a Market Driver

Growing awareness about energy conservation remains one of the strongest drivers of luminaire and lighting control adoption. With electricity prices steadily rising, governments and municipalities are replacing outdated systems with energy-efficient alternatives.

For example, cities in developed regions are shifting to LED-based street lighting and intelligent control systems. Policies such as import tariffs on traditional lamps and stricter energy-efficiency standards are accelerating this transition.

According to the DesignLights Consortium (DLC) and Northwest Energy Efficiency Alliance (2020), advanced luminaire and lighting controls can deliver energy savings of more than 60%. Manufacturers are capitalizing on this by offering innovative products, particularly for streetlighting applications where large-scale adoption ensures significant cost reductions and improved sustainability outcomes.

 

Smart Homes and Smart Buildings Fuel Adoption

Another critical factor driving the luminaire and lighting control market is the boom in smart homes and smart buildings. Integrated lighting systems are increasingly being deployed in residential and commercial spaces, where energy efficiency has become a top priority.

Lighting accounts for around 14% of total building energy use, according to a study by the Massachusetts Institute of Technology. This makes it a prime target for energy optimization. Smart buildings now incorporate advanced lighting controls that adjust brightness based on occupancy, daylight availability, or preset user preferences.

Rapid urbanization and infrastructure development also play a major role. Smart city initiatives are accelerating the installation of intelligent lighting for public spaces, roadways, and architectural projects. For example, in August 2023, NEC Corporation India launched a new smart city project in Tirupati, showcasing how modern urban infrastructure is embracing intelligent lighting systems to improve quality of life while cutting costs.

 

Cost Challenges in Implementation

Despite the strong market outlook, high upfront costs remain a barrier. Energy-efficient lighting technologies such as LEDs are significantly more expensive than conventional options. While a compact fluorescent bulb costs around US$ 2–15, an LED light is priced closer to US$ 35.

Although LEDs and advanced controls lead to long-term energy savings, the initial investment can deter adoption, particularly in developing markets. Manufacturers and governments are addressing this challenge through subsidies, financing models, and innovation to bring down costs over time.

 

Regional Outlook

Asia Pacific dominated the luminaire and lighting control market in 2022 and is expected to maintain its lead through 2031. Strong investment in infrastructure development, rapid urbanization, and government-backed smart city programs are driving growth in the region.

In India, for instance, Foreign Direct Investment (FDI) in construction development and infrastructure projects reached over US$ 52 billion between 2000 and 2021, according to the Department for Promotion of Industry and Internal Trade (DPIIT). Similar large-scale initiatives across China, Japan, and Southeast Asia are ensuring steady demand for energy-efficient lighting systems.

North America and Europe are also significant markets, where stringent energy efficiency standards and a strong push toward sustainability are ensuring robust adoption of luminaire and lighting control solutions.

 

Competitive Landscape

The luminaire and lighting control market is highly competitive, with global players focusing on innovation, strategic partnerships, and acquisitions to strengthen their presence. Key companies 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 highlight the industry’s dynamic nature. In November 2023, iGuzzini expanded its Living Vibes collection with BeTwo luminaire, targeting the premium residential and hospitality segments. Similarly, in April 2023, ams OSRAM partnered with Musco Lighting to launch high-performance OSCONIQ LEDs in a new sports lighting system in Germany. These innovations illustrate how players are diversifying their offerings to capture emerging opportunities.

 

Market Segmentation

The industry is broadly segmented by product type, technology, component, application, and region:

• Product: Luminaire, Control
• Light Source: LED, Halogen, Fluorescent, HID, Others
• Technology: Wired, Wireless (Wi-Fi, Bluetooth, ZigBee, Others)
• Component: Hardware (LED Drivers, Sensors, Switches, Dimmers, Relays, Gateways), Software (Cloud-based, Web-based, Hybrid), Services (Professional, Managed)
• Application: Indoor (Residential, Commercial, Industrial, Public Buildings), Outdoor (Roadways, Public Places, Architectural Lighting, Rail/Harbor Lighting)

This diversity reflects the widespread applications and innovation potential in the luminaire and lighting control market.

 

Conclusion

The luminaire and lighting control market is on a path of steady growth, supported by the dual imperatives of energy conservation and smart technology adoption. While high upfront costs remain a challenge, ongoing innovations, smart city initiatives, and regulatory support are expected to sustain strong demand through 2031.

As global players invest in R&D and strategic collaborations, the industry is set to evolve into a cornerstone of sustainable urban infrastructure, improving efficiency, safety, and quality of life worldwide.