The global Lighting-as-a-service market is rising above at a CAGR of 45.50% for the period between 2022 to 2030. Rapid urbanization and smart management in cost-effective business models are the primary resources for the expansion of the market at present. In the present urban development scenario, advanced lighting is a sign of a progressive state or city. This visual and commercial utility of the lighting features is creating a steady demand for a sustainable service that provides the various necessities associated with lighting in commercial, industrial, and urban places.
Figure 1: Lighting-as-a-service Market Size, 2022-2030 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
To be precise, Lighting-as-a-service (LaaS) is a modern business model to outsource the installation, equipment management, maintenance, and services from third-party companies. This business model is not very unlike a subscription in OTT platforms like Netflix. In this model, the end-user needs to subscribe to a commercial and urban lighting service based on a limited-time agreement or contract. The global lighting-as-a-service market share is growing based on worldwide awareness about the utility of LED technology, smart lights, etc. The cost-effectivity of the LaaS model is one of the primary forces behind the growth of the said market.
The emergence of the COVID-19 pandemic has fallen upon humanity as a global curse. It is undeniable the spectrum of harm this disease has cost is wide. Not restricted to the healthcare system alone, the infectious disease has spread its damaging effects on all kinds of business and commercial industries as well, along with devastating the economies of several countries. To curb the rate of infection, countries were forced to impose total lockdown for months in all most all nations. This shut-down scenario certainly affected the lighting-as-a-service market as well. To be specific, the grave effects of the lockdown in the end-user industries are a primary cause for the lowering of the market growth of LaaS as well.
Due to the pandemic, there was a significant scarcity of human workforce in the fields of manufacturing, distribution, installation, servicing, etc. The end-user markets collapse due to the lockdown as well. That brought a lowering of demand in the end-user market. Also, disruptions in the service industry and shutting down of commercial complexes for months have reduced the need for third-party LaaS services for the companies. Almost every corporation becomes eager to reduce the overhead costs to sustain amidst the pandemic. Although, the market is resuming and recovering fast after the lockdowns are over. The current market trends suggest the market will reach a phenomenal height in the next few years.
One of the major market drivers for LaaS is the rapid industrialization and urban development in economically wealthy countries. In emerging nations of the developing world, the demand for LaaS is increasing too. In the urban and municipal development arena, the demand for LED lighting is increasing due to its energy consumption efficiency. The lighting-as-a-service industry is moving forward with the demand in several commercial complexes, offices, public squares, etc. The world market for LaaS is moving ahead with a phenomenal response from the emerging markets as well. Market reports claim that 18-40% of the net energy consumption of commercial buildings is caused by the lighting facility and almost 10% in the household structure. Energy-efficient lighting such as LED lights will decrease the global electricity demand by almost 30-40% in the next ten years.
These factors grow the interest in contracting a third-party subscription-based LaaS setup, that reduces the overhead costs by a lot. Since the contractual company takes care of the installation, maintenance, services, etc faculties of lighting, the monthly operational costs reduce to the end-users. These are the major reasons behind the growth of the LaaS industry.
The advancement in the existing technology is going to present glorious opportunities for the market to expand. According to the US Department of Energy (DOE) prediction, almost 75% of the outdoor lights that are maintained by municipal authorities, will turn into light-emitting diodes (LEDs) by 2020. The projection is optimistic for the lighting-as-a-service market growth in the coming years as well. Advancements in the LED technology will reduce energy consumption more in the future, which will lead to a healthier market for the LaaS vendors and the end-users. Latest innovations in the internet of things (IoT) and artificial intelligence (AI) technology are increasing the number of smart commercial buildings and households. Smart lighting is not only convenient but is essentially energy efficient.
Maintenance of the smart lighting features is going to be a primary resource for the Laas market in the coming years. Also, the Governmental regulations and campaigns on using energy-saving modes of appliances, are going to boost the said market as well. Constant upgrades in the regional and national market will create scopes for the emerging LaaS market as well.
One of the major restraints in the LaaS market is the unawareness and lack of infrastructure in emerging markets. There is a notable lack in the number of skilled and trained personnel to manage the modern lighting requirements in the markets. The uneven distribution of the latest technology is harming the lighting-as-a-service market profit in several market regions of the world. Small and medium enterprises are dominant (SMEs) in developing countries. Although the end-users save money on upfront investments and net monthly expenditure with LaaS, the service charges are not affordable to a large section of the SME market.
This factor is causing a lowered growth in the global Lighting-as-a-service market. A lack of trained personnel is counterintuitive to the existing market. Especially, when end-users take contractual deals from the vendors and the service is not adequate, the user experience becomes tricky for the rest of the contract period. The lighting-as-a-service market faces a lowered growth due to these unavoidable factors.
Advancements in technology are energy efficient in the electrical consumption metric, but smart technologies will cost more in the installation and system up-gradation areas. A large section of the SME market is not prepared for the increase in investment costs. Also, smart building or smart lighting has a direct reliance on the internet availability and network quality of the market. The maintenance costs and internet factor are going to pose several challenges to the existing market in the coming years.
The lighting-as-a-service business is challenged by the complications due to operational methods in the market. There is no centralized standard in the global market for executing the LaaS functions, which is going to pose certain challenges in the market.
Over the years, the growth of the LaaS market has improved a lot. The global lighting-as-a-service market size reached a net valuation of USD 78.37 million in 2017. Current projections show that the market is moving forward at a CAGR of 47.7% for the forecast period 2017 to 2023. The growth rate has accelerated in the last couple of years with the availability of modern LED technology and smart lights in the market. The estimated net valuation will reach USD 814.59 million by the end of 2023.
The chain of distribution is pivotal in the case of LaaS systems. The LaaS process includes installation, service, maintenance of the lights. The vendors of LaaS chose traditional service-oriented outlets and markets to reach the end-users. There is a dominance of online portals for the distribution of the services.
Based on various factors there are different lighting-as-a-service market segments. Different parameters of the market such as installation, component, application, etc, the segments are classified.
The global lighting-as-a-service market is divided into threeighting-as-a-service major market regions which are North America, Europe, Asia Pacific. Developed countries like the Us, Canada, UK, Germany, France, etc are the leading market for LaaS business. The fast-developing APAC countries like China, Japan, Hong Kong, India are making progress in the industry too. As of now, the North American region occupies the largest market share in the world. Current projections also predict that in the coming years the APAC region will be the fastest-growing market due to rapid urbanization in the countries.
The global lighting-as-a-service market top players are –
The lighting-as-a-service market report contains growth, trends, forecasts, segments, and many more in detail for better strategies.
| Report Attribute/Metric | Details |
| Â Â Market Size | Â Â USD 8.93 Billion |
| Â Â CAGR | Â 45.50% |
| Â Â Base Year | Â Â 2021 |
| Â Â Forecast Period | Â Â 2022-2030 |
| Â Â Historical Data | Â Â 2020 |
| Â Â Forecast Units | Â Â Value (USD Billion) |
| Â Â Report Coverage | Â Â Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| Â Â Segments Covered | Â Â By Component, Application |
| Â Â Geographies Covered | Â Â North America, Europe, Aisa Pacific |
| Â Â Key Vendors | Â Â Philips NV (Netherlands) General Electric Lighting (US) Itelecom (Chile) Valoya Oy (Finland) RCG Lighthouse (Latvia) Metrus Energy Inc (US) Zumtobel Group Ag (Austria) LEDVANCE GmbH (Germany) Lunera Lighting (US) Enlighted Inc. (US) |
| Â Â Key Market Opportunities | Â Â The advancement in the existing technology is going to present glorious opportunities for the market to expand. |
| Â Â Key Market Drivers | Â Â One of the major market drivers for LaaS is the rapid industrialization and urban development in economically wealthy countries. |
Lighting-as-a-Service Market Highlights:
Frequently Asked Questions (FAQ) :
The light as a service market can thrive at 45.50% CAGR by 2030.
The light as a service market can value at USD 8.93 Billion by 2030.
In 2017, the light as a service market valued at 78.37 Mn.
General Electric Lighting (US), Koninklijke Philips N.V. (Netherlands), and Zumtobel Group AG (Austria) are some reputed names in the light as a service market.
The North America light as a service market can achieve remarkable valuation by 2030.
Team Lead - Research she holds an experience of about 6+ years in market research and business consulting, working under the spectrum of information communication technology, telecommunications and semiconductor domains. aarti conceptualizes and implements a scalable business strategy and provides strategic leadership to the clients. her expertise lies in market estimation, competitive intelligence, pipeline analysis, customer assessment, etc.
Get in Touch
© 2024 Market Research Future ® (Part of WantStats Reasearch And Media Pvt. Ltd.)
