21 December 2010

US enterprise LED lighting market to grow 30% in 2011, and reach $1bn by 2014

The US market for commercial and industrial LED lighting is forecasted to be $330m in 2010, as the transformation of lighting technology to LEDs is beginning in this sector first, according to the report ‘Enterprise LED Lighting, Trends, Opportunities and Leading Market Players in Commercial and Industrial LED Lighting’ from Groom Energy and Greentech Media Research. The market sector should grow by more than 30% next year and surpass $1bn in annual revenue by 2014.

The report provides a guide to the market, with profiles of the the top 50 LED fixture makers and ten LED component providers, analyzing the top four enterprise LED market leaders including Cree, Philips, Lighting Science Group and BetaLED.

The complex engineering challenges behind LED lighting (compared to incandescents) have created opportunities for startups, and venture capital funding has flowed into the sector in hundreds of millions of dollars, say the market research firms. However, the incumbent sales channel controlled by the likes of Sylvania, Osram and Philips presents a challenge to newcomers and requires a new channel approach or aggressive partnering with these existing vendors.

Venture investors such as Alan Salzman of VantagePoint Venture Partners see this transformation occurring in lighting, with everything switching to solid-state lighting and causing “a $100bn industry to flip”. In Salzman’s view, the mammoth lighting incumbents like Philips, GE and Osram “might catch up — or might not”.

The study also recognizes that rapid market growth will come from three emerging trends in the industry:

  • Recent advances in LED chip performance that allow more cost-effective designs for replacing existing lighting systems;
  • Newly introduced utility energy-efficiency financial incentives for converting to these LED-based systems;
  • Increased interest from building owners in applying sustainably oriented lighting retrofits that save money for their operations.

“We’re seeing a whole range of well engineered new products that produce high-quality light and provide strong financial return based on their energy savings,” says report co-author Fritz Troller, Groom Energy’s VP of marketing. “It’s a perfect combination to produce accelerated LED market adoption.”

Tags: LED lighting

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