Grow Lights Market Size, Share & Trends Analysis Report By Technology (High Intensity Discharge, LED, Florescent), By Application (Vertical Farming, Indoor Farming, Commercial Greenhouse, Turf and Landscaping, Research, Others), By Spectrum (Partial Spectrum, Full Spectrum) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global grow lights market size was valued at USD 4.08 billion in 2023 and is projected to reach a value of USD 17.55 billion by 2032, registering a CAGR of 17.60% during the forecast period (2024-2032). The increase in grow lights market share during the forecast period is related to Increasing demand for indoor farming and the growing popularity of indoor vertical farming.

Light plays a vital role in the growth and development of plants. The sun is the primary light source for outdoor plants, whereas, for indoor plants, fluorescent light bulbs provide benefits similar to sunlight. A grow light stimulates plant growth by emitting the light required for photosynthesis. Grow lights are mainly used where no naturally occurring light or supplemented light is essential. They are used in indoor gardening, horticulture, food production, plant propagation, and aquatic plants. In addition to their usage at the industrial level, they also find use in households.

The global grow lights market is witnessing substantial growth, driven by the increasing adoption of indoor farming and advanced agricultural practices. Grow lights, designed to stimulate plant growth by emitting specific wavelengths necessary for photosynthesis, are crucial for indoor gardening, horticulture, food production, plant propagation, and aquatic plant care. With the global shift towards sustainable farming and the rising demand for fresh produce year-round, grow lights are essential in environments where natural light is limited or non-existent. The growing trend of vertical farming and advanced LED technology in grow lights are key factors propelling the market forward.

Highlights

• LED dominates the market by Technology.
• Indoor Farming leads the market by application.
• Full spectrum grow lights hold the largest share by spectrum.

Market Dynamics

Global Grow Lights Market Drivers

Increasing Demand for Indoor Farming and Vertical Farming 

Grow lights are becoming increasingly in demand due to the increasing popularity of indoor farming techniques like greenhouse farming and vertical farming. Given the growing need for food all over the world and the diminishing amount of land that is suitable for agriculture, it is anticipated that this pattern will continue. Due to the fact that indoor farms require artificial illumination to cultivate plants, the demand for grow lights is expected to develop at a remarkable rate over the next ten years. 

Consequently, vertical and greenhouse farming are two examples of indoor farming techniques becoming increasingly popular among farmers due to the diminishing amount of arable land and the growing need for food. These farming techniques use LED grow lights to supply plants with the necessary amount of light for them to flourish. It is anticipated that the need for LED grow lights will increase in nations such as the United States of America, China, and Japan as the popularity of indoor vertical farming continues to rise. For example, AeroFarms, a U.S.-based vertical farming company, uses LED grow lights to optimize plant growth while minimizing resource use.

Rising Demand for Fresh, Year-round Produce and LED Lighting Benefits 

Urbanization and the growing preference for fresh, locally sourced produce have led to the expansion of indoor farming in urban areas. LED grow lights are becoming the preferred choice due to their energy efficiency, low heat output, and long lifespan. These lights are ideal for vertical farming, where space is limited, and energy costs must be minimized. According to a 2023 report by the World Economic Forum, urban indoor farming is projected to grow by 20% annually, driven by the benefits of LED lighting in agriculture, such as enhanced crop yields and reduced energy consumption.

Global Grow Lights Market Restraints

High Initial Costs and Spectrum Output Complexity 

One of the most significant challenges facing the worldwide grow lights industry is the intricacy of managing spectrum output, accompanied by high beginning expenditures. The market's growth and expansion may need to be improved due to these problems. A significant initial expenditure may be necessary to install a grow light system, which may be a hurdle for businesses operating on a significantly more extensive scale. Some producers may have financial difficulties due to the additional expenses associated with procuring, installing, and utilizing the necessary electrical components, which may restrict the expansion of the market.

Furthermore, many plants' optimal growth depends on the presence of particular light spectrums. Controlling and fine-tuning the spectrum output of grow lights to satisfy the specific requirements of various plants can be complex, particularly for individuals new to indoor farming. These limitations can affect the industry's expansion by making it more challenging for confident growers to implement grow-light technology. This is especially true for growers with limited financial resources or insufficient knowledge of indoor farming. On the other hand, continued developments in LED technology and an increasing awareness of sustainable agricultural methods can help reduce these issues over time. 

Global Grow Lights Market Opportunity

Rising Adoption of the Farm-to-Table Movement 

The growing farm-to-table movement, which emphasizes fresh, locally sourced ingredients, presents significant opportunities for the grow lights market. As restaurants and consumers increasingly seek seasonal, high-quality produce, the demand for controlled environment agriculture (CEA) is rising. Grow lights enable year-round cultivation in regions with harsh climates or limited growing seasons. The movement also supports sustainability goals by reducing food miles and energy consumption, making grow lights integral to achieving these objectives. According to a 2023 report by the Farm-to-Table Foundation, the global farm-to-table market is expected to grow at a CAGR of 15% over the next five years, with grow lights playing a critical role in supporting this growth.

Moreover, the farm-to-table movement emphasizes the significance of traceability and transparency in the food manufacturing process. Grow lights enable farmers to satisfy the demands of restaurants and consumers interested in locally sourced, high-quality ingredients by ensuring consistent supply and quality. Enhancing transparency within the food system can cultivate confidence and responsibility, bolstering the need for grow lighting to facilitate sustainable, regulated agriculture.

In conclusion, the farm-to-table movement has the potential to foster a more profound bond among consumers, farmers, and the environment. Grow lights can contribute to the conservation of farmland, biodiversity, and traditional food cultures by supporting local producers and promoting fresh, seasonal ingredients. This can potentially result in a wider variety of nutritious dietary choices, thereby enhancing the general welfare of communities. 

Regional Overview

Europe Dominates the Global Market

The global grow lights market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Europe is anticipated to dominate the global grow lights market, with a projected market share of 28% by 2035. This growth is primarily driven by the increasing adoption of alternative farming methods, such as vertical farming and controlled environment agriculture (CEA), to combat the region's limited arable land. The European Union's Green Deal, which emphasizes sustainable agriculture and the reduction of carbon emissions, has significantly bolstered the market. In 2024, the market saw a notable increase in the deployment of LED grow lights in urban farming projects across countries like the Netherlands and Germany. For instance, in 2024, Signify launched its next-generation Philips GreenPower LED toplighting compact module, explicitly designed for greenhouse applications, which several large-scale greenhouse operations in the region have adopted. Additionally, OSRAM's 2024 collaboration with Agrolux to enhance the efficiency of grow light systems in vertical farms has further solidified Europe's leadership in the market.

North America's grow lights market is expected to hold a 23% market share by 2032, driven by the region's limited cultivation space and the increasing demand for vertical and indoor farming technologies. The U.S. market, particularly, is seeing significant growth due to strong government support for sustainable agriculture initiatives. In 2024, the U.S. Department of Agriculture (USDA) announced a new grant program to support urban farming projects, leading to a surge in investments in vertical farming. Companies like Plenty and Bowery Farming have expanded their operations, opening a new 100,000-square-foot vertical farm in California that uses advanced LED grow lights to optimize energy use and maximize crop yields. In 2024, GE Current, a Daintree company, introduced a new line of horticultural LED lighting solutions, further enhancing the region's market growth.

The Asia-Pacific region, already holding the largest market share, is expected to experience the highest compound annual growth rate (CAGR) through 2035. This growth is fueled by the increasing demand for LED grow lighting solutions in countries such as China, Japan, and India. The region's focus on food security and the adoption of advanced farming technologies like vertical farming and hydroponics is driving market expansion. China's 2024 Five-Year Plan highlights the government's commitment to developing smart agriculture, which includes the widespread adoption of LED grow lights. As a result, major companies like Everlight Electronics and SANANBIO have ramped up their production of energy-efficient grow lights to meet the surging demand. In Japan, 2024 saw a rise in indoor farming ventures, with companies like Spread Co., Ltd. expanding their operations to include more sophisticated LED grow light systems to ensure year-round fresh produce production.

Segment Overview

The global grow lights market is segmented based on technology, application and spectrum.

The market is further segmented by technology into high-intensity discharge, LED, and fluorescent.

LEDs dominate the grow lights market due to their efficiency, durability, and flexibility. The LED segment is witnessing rapid growth, driven by the demand for energy-efficient lighting solutions. LEDs provide a high Photosynthetic Photon Flux (PPF), which is crucial for photosynthesis and leads to better plant growth and yield. The heat emitted by LEDs is minimal, reducing the need for additional cooling systems thus lowering operational costs. The global shift toward sustainable and eco-friendly agricultural practices also pushes the adoption of LED grow lights. For instance, integrating smart farming technologies with LED lights has enabled precision agriculture, where light intensity and spectrum can be adjusted according to the plant's growth stage, resulting in higher efficiency and crop quality.

HID lights, including Metal Halide (MH) and High-Pressure Sodium (HPS) lamps, have been traditionally used in large-scale commercial farming. Although LED technology is rapidly gaining market share, HID lights remain popular due to their high light intensity and deep penetration, making them suitable for large plants and flowering stages. The HID segment holds a significant market share, particularly in regions with well-established commercial greenhouses. However, the trend is shifting towards hybrid systems that combine HID and LED lights to optimize energy consumption and enhance crop yield.

The market is further segmented by application into vertical farming, indoor farming, commercial greenhouses, turf and landscaping, research, and others.

Indoor farming is the largest application segment in the grow lights market, driven by the rising demand for local, sustainable, and year-round food production. Grow lights are essential in indoor farming, where natural sunlight is insufficient. The growth of urban agriculture and the increasing number of vertical farms in cities further boost this segment. The U.S. leads the indoor farming market, supported by technological advancements and a growing focus on reducing the carbon footprint of food production. Indoor farming operations are increasingly adopting LED grow lights due to their energy efficiency and the ability to create optimal growing conditions with minimal heat output, enhancing crop yield and reducing operating costs.

The commercial greenhouse segment is experiencing steady growth as traditional farming practices evolve to include controlled environment agriculture (CEA). Grow lights are critical in extending daylight hours and enhancing plant growth during winter or in regions with less sunlight. The trend towards organic farming and the increasing adoption of hydroponics and aeroponics systems in commercial greenhouses drive the demand for advanced grow lights. Europe, with its extensive greenhouse farming operations, particularly in the Netherlands and Spain, is a key market for grow lights, with significant investments in LED and HID technologies to improve crop quality and yield.

The spectrum segment is divided into Partial Spectrum and Full Spectrum grow lights.

Full spectrum grow lights, which cover the entire Photosynthetically Active Radiation (PAR) range (400-700 nanometers), are gaining popularity due to their ability to mimic natural sunlight, supporting plant growth throughout all stages. These lights are particularly effective in promoting photosynthesis, which is crucial for plant development. The demand for full spectrum lights is increasing in commercial and indoor farming applications, where replicating natural growing conditions is essential for maximizing yield. Full spectrum lights also reduce the need for multiple lighting systems, lowering installation and operational costs.

Partial spectrum growth lights, which focus on specific wavelength ranges such as red, blue, or green, are essential during particular phases of plant growth. For example, blue light is beneficial during vegetative growth, while red light is crucial during flowering and fruiting stages. Partial spectrum lights are often combined with other light sources to optimize plant growth at different stages. This segment is seeing steady growth in specialized farming operations, such as research facilities and niche crop production, where precise control over the light spectrum is required to achieve specific plant characteristics.

Impact of covid-19

Manufacturing activities were impeded by the COVID-19 outbreak, which hampered the growth of the global market. The COVID-19 outbreak prompted tight lockdown restrictions, leading manufacturing and sales operations to be disrupted. The global coronavirus outbreak has significantly influenced manufacturing industries, particularly machine vision market growth. Concerns about the environment and regulations compel firms to think creatively to increase sales and revenue.

This industry has already shown signs of decline in the fourth quarter of 2019 and the first quarter of 2020. Furthermore, the companies anticipate a significantly more significant impact from the pandemic in the third and fourth quarters of 2020 and the first quarter of 2021. According to the producer and distributor, customers do not expect the products due to stock and distribution network concerns. Nevertheless, most businesses expect income to remain below before levels by the end of 2021 and even one year after the crisis's peak.

Market Recovery Timeline and its Challenges

The post-pandemic period will be crucial for the global market. The market's growth is likely to be hampered due to a lack of skilled professionals working with advanced technologies. On the other hand, factors like the growing demand for quality and automation inspection will likely continue to drive the market growth over the forecast period.

Recent Development

• August 2024- OSRAM launched its new Horticulture Luminaire series, specifically designed for large-scale commercial greenhouse operations. This product line is equipped with smart control features, allowing precise adjustments to light intensity and spectrum based on plant needs.
• June 2024- Signify announced a partnership with Agrilution, a German-based indoor farming startup, to provide customized LED grow light solutions for their vertical farming systems. This collaboration aims to enhance the quality and yield of crops grown in indoor environments.