LED Market Outlook Is Bright

by | May 12, 2015

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Navigant LED Lamps Modules Energy ManageUnit shipments of LED lamps and modules are expected to experience an overall 19 percent compound annual growth rate through 2024, according to a new report from Navigant Research. LED prices have declined to a point where this type of lighting is becoming the economical choice in almost every application.

In commercial buildings, the shift to LEDs is most dramatic in the share of luminaires sold for retrofit projects. Although Navigant estimates that only 15 percent of lamps sold to commercial retrofit projects worldwide in 2014 were LED-based, that share is expected to grow to nearly 76 percent by 2024. Such growth will largely eliminate incandescent and halogen technologies. LEDs will also take a significant portion of the market from T8 and T5 fluorescent lamps, as well as compact fluorescent lamps (CFLs).

The residential market for LED luminaires and lamps is set to explode as prices come down, efficacy improves and new use cases for lighting develop.

For industrial and other high-bay applications, LEDs had been unable to meet the demands of illuminating spaces from afar while minimizing contrast, reducing glare and meeting strict safety and hazardous environment requirements. However, with the 2014 launch of several high-bay LED products that provide exceptional quality in a price range that allows for acceptable paybacks from energy savings, the high-bay lighting market is set for a rapid shift in lighting technology, similar to the shift toward LED lighting that has already begun in commercial buildings.

LEDs have made a particularly strong economic case in outdoor applications, especially street lighting, due to the high wattages and long runtimes of the lights involved.

While this growth presents opportunities for companies involved in the lighting industry, significant challenges are also arising. The fall in LED prices is leading to the commoditization of many LED components, fueling price wars. Meanwhile, patent disputes are increasing as the owners of intellectual property protect their turf.

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