Enthusiasm is High, But Price Hampers Consumer LED Market
The rising environmental consciousness of end-users as well as new energy-efficiency requirements have opened up a large market for energy-efficient lighting equipment in North America. Consumers are eager to not only adopt products that have the least impact on the environment, but also reduce energy consumption.
Market analysis and consulting firm Frost & Sullivan, in its Analysis of the North American Lighting Equipment Market, finds that this market earned revenues of $17.3 billion in 2011 and estimates this to reach $20.8 billion in 2016.
“Uncertainty around energy prices has led to reevaluations of energy consumption,” said Frost & Sullivan Industry Analyst Alejandra Lozano. “Building owners, facility managers and homeowners are exploring ways to save energy by replacing their lighting systems with more energy-efficient ones.”
North America has passed legislation such as the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007, which impose certain energy-efficiency standards on buildings and lighting products. The government also offers tax deductions for energy-efficient lighting systems and utility rebates for energy-efficient lighting products. This has led to the phasing out of incandescent lamps, magnetic ballasts, and other inefficient light sources, which, in turn, bodes well for the energy-efficient lighting equipment market.
Despite the vast opportunities in the market, intense competition and the higher initial costs of advanced lighting products are limiting revenue growth and market penetration. The slowdown in construction activity has further dampened the growth rate of market.
In the last few years, owing to the economic downturn, end users have started scrutinizing every purchase and demanding cost-effective systems. However, once the economy recovers and construction activity picks up, the market is anticipated to witness steady growth until 2016.
“Lighting manufacturers are also investing in R&D to make products more energy-efficient, longer-lasting and affordable,” said Lozano. “Novel lighting equipment demonstrates higher efficiency, faster startup, enhanced control, and better light quality, which are improving the uptake of innovative lighting fixtures and controls.” Overall, manufacturers with a competitive pricing strategy as well as high quality products that offer the most energy savings will have an edge in the market.
Analysis of the North American Lighting Equipment Market is part of Frost & Sullivan’s Environment & Building Technologies Growth Partnership Services program, which also includes research in the following markets: European Energy-Efficient Lighting Market; Forecasts and Growth Opportunities in the Total European Lighting Equipment Market; World LED Lighting Markets; and European Lighting Equipment Market: Opportunities by Vertical Application Sector. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
About Frost & Sullivan
For more than 50 years, Frost & Sullivan has been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. The company works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today’s market participants. The “Growth Partnership” supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure.