Lighting Control System Market

Market Overview

The global lighting control system market size was valued at USD 16.37 billion in 2023. It is estimated to reach USD 64.08 billion by 2032, growing at a CAGR of 18.6% during the forecast period (2024–2032).

The lighting control system is a sophisticated digital system that adapts the illumination pattern to the user's preferences. It can deliver efficient energy by reducing the quantity of power required for lighting applications. The end-user can modify the brightness intensity using smart technology according to the occupant's availability and physical presence. It can be used for traffic, highway, industrial, and residential illumination, among other applications.

Lighting control systems are utilized to improve lighting system energy efficiency, comply with green building and energy conservation initiatives, and meet building codes. Lighting control systems may incorporate lighting technology for convenience, security, and energy savings. The primary benefit of lighting control systems over standalone lighting controls or manual switching is enabling users to control single or group lights from a single user interface device. Low installation costs and greater placement flexibility for switches and sensors are additional advantages of wireless lighting control systems.

Market Dynamics

Global Lighting Control System Market Drivers

Increasing Demand for Energy-Efficient Lighting

Lighting efficiency is considered a prominent strategy to reduce energy consumption in buildings. Initially, these savings were reached by increasing the productivity of lamps and ballast. However, deep energy savings and Zero Net Energy (ZNE) is now possible by installing lighting control systems or components that control efficient fixtures, bulbs, and lamps. Lighting control is one of the simplest ways to save significant amounts of energy with relatively low investment; hence, it is gaining high popularity.

In recent years, the demand for energy-efficient lighting and lighting controls is rising significantly in response to government energy-saving programs. Governments around the world are working to minimize energy usage by outlawing wasteful technologies, tightening laws governing energy efficiency, and providing incentives for entire building infrastructures. This provides a favorable environment for the long-term lighting control system market growth.

Shift to SSLS from Conventional Lighting Products

Solid-State Lighting, or SSLs, based on LEDs, OLEDs, and LDs, has posed a challenge to traditional lighting systems. LEDs, in particular, have become a game-changer, outperforming traditional technologies in every way. As a result, all electric lighting is expected to be based on SSLs soon. The current penetration of LED-based systems is 40−45% and is expected to increase rapidly during the forecast period.

Additionally, there has been a dramatic shift in the global adoption of lighting management systems due to the increasing popularity of LED lighting. The demand for LEDs will be boosted by the growing ban on traditional lighting products and the declining cost of LEDs during the forecast period. Since lighting control systems are highly efficient with LEDs, the rising penetration of LEDs and other SSLs is expected to fuel market growth over the next few years.

Global Lighting Control System Market Restraint

High Installation Cost and Complexity

Lighting control systems have a high initial cost and a high cost of integration and installation services. This is because of several hardware components, such as dimmers, switches, cameras, control mechanisms, and applications. As a result, the cost of installing lighting control systems is greater than that of traditional lighting.

Additionally, lighting controls have traditionally been unnecessarily complex and time-consuming, resulting in less-than-optimal results. When it comes to wired lighting systems, the uncertainty problem comes in both old and modern ways. Contractors frequently encounter a multitude of intricate challenges. Therefore, the factors above are expected to restrict the market growth.

Global Lighting Control System Market Opportunities

Advent of IoT in Lighting Control

The lighting business has undergone a dramatic transformation in recent years in terms of energy efficiency, increased value, and savings provided by manufacturers to their customers. End-users of lighting products enjoy significant savings in terms of electricity bills by combining controllers, sensors, and connected LEDs. This, in turn, has fueled the demand for lighting control products. The adoption of LED over traditional lights results in half of the savings, and the other half is due to the intelligent behaviors of IoT that are majorly achieved by sensors, timers, and lighting control products.

The integration of Internet of Things technology and sensors enables an LED to autonomously control the switching on, off, or dimming of lights, significantly reducing energy consumption by approximately 90%. Moreover, the adoption of IoT in lighting control is also useful for business intelligence. The adoption of IoT would also have an impact on lighting design. The lighting control system can be enhanced with new capabilities like color-tunability and interior placement to enhance occupant health. Thus, the advent of IoT in lighting control systems is expected to offer lucrative market growth opportunities.

Regional Analysis

Based on region, the global lighting control system market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant global lighting control system market shareholder and is estimated to exhibit a CAGR of 19.4% during the forecast period. Several factors are contributing to the dominating position of Asia-Pacific in the market. The main contributing factors are the existence of some of the most populated nations, the strong penetration of LED in nations like China and Japan, and a sizable base for the manufacturing and consumption of electrical equipment. Japan, South Korea, and China are widely recognized as the three nations that generate the highest LED income. Moreover, Asia has emerged as the primary global production base for the LED sector. The growing population in the area stimulates infrastructure and construction growth, which generates demand for lighting control systems.

Another factor driving the demand in the Asia-Pacific region is the growing market perception of energy-efficient lighting as a result of the power tariffs and environmental concerns. The governments in various nations, especially China, India, and South Korea, are implementing smart lighting policies and strict energy efficiency regulations. Market growth is fueled by the growing use of smart lighting systems and the government's intense focus on creating smart cities.

Europe is predicted to exhibit a CAGR of 17.9% over the forecast period. The European lighting market is witnessing significant growth in recent years. In the residential sector, decorative lights accounted for a major share. The region mainly imports lighting from developing countries. The European policy of phasing out inefficient lighting goods has proven successful. The region is selling more energy-efficient lights than less efficient ones, boosting the demand for lighting control systems. The region has witnessed a rapid decline in the shipments of incandescent lamps, and this is expected to reach almost zero in the coming years.

Likewise, it has been estimated that by 2030, approximately 200 million units of non-directional LED lamps will be sold in the EU residential sector every year. The region expects to achieve over 30 TWh reduction in terms of energy consumption by 2030. This, in turn, reflects the huge growth potential for lighting control systems in Europe.

North America contributed a substantial share of the global lighting control system market due to the huge commercial and residential penetration and high disposable income among consumers. Moreover, since a majority of the population in North America lives in urban areas and has awareness about light sustainably, the adoption of lighting products is high. In terms of affordability, 70% of people aged 15−64 years in the United States have a paid job, above the OECD employment average of 68%. This reflects the high disposable income of consumers in North America, which is an important driver for the market.

Latin America accounted for a negligible share in the global lighting control system market, majorly due to sluggish economic conditions, lack of awareness regarding energy conservation, and, most importantly, tough competition from other developed nations. Brazil and Mexico are the leading countries generating the highest demand for lighting control systems. However, the region is expected to grow substantially during the forecast period, supported by rapid urbanization, growing construction activities, and rising demand for smart and comfortable lighting. The commercial and residential sectors are expected to report higher sales during the forecast period, especially among offices.

Additionally, the market offers tremendous potential and opportunities for lighting control system manufacturers owing to the growth prospect in developing economies, including Brazil and Mexico. In 2019, some sectors witnessed substantial returns, with information technology and real estate yielding over 43% and 42%, respectively, during the year. This reflects a huge potential in demand from the residential sector and corporate offices.

The Middle East and Africa is the lowest contributor to the global lighting control system market, with Saudi Arabia and the UAE generating the highest demand in the region. The region has both positive and negative factors impacting the lighting control system market demand. Although the Middle Eastern region is a hub for the hospitality industry, several economically backward African countries are offsetting the market growth.

Segmental Analysis

The global lighting control system market is bifurcated into installation, offerings, communication protocol, and end-use.

Based on the installation, the global market is divided into new and retrofit installations.

The new installation segment accounts for the largest lighting control system market share and is expected to exhibit a CAGR of 18.1% over the forecast period. New construction is considered the most appropriate time to install a lighting control system since it allows consumers to choose from all the available options. The wired and wireless communication protocols can be easily installed in a new building, providing end-users with a vast range of options. Moreover, with the growing construction activities in several developing countries, the increasing number of commercial spaces and the rapidly growing residential sector are boosting the demand for lighting controls through new installations.

Building codes and standards also emphasize the importance of incorporating energy-saving controls into the new architecture. Instead of the significant energy benefits, most state commercial building energy regulations require a wide range of controls in new buildings. As a result, the need for lighting controls for new installations has been increasing over the past few years.

Based on offerings, the global market is bifurcated into hardware and software and services.

The hardware segment owns the highest market share and is predicted to exhibit a CAGR of 17.3% over the forecast period. The global lighting control system market is dominated by hardware components such as LED drivers, dimmers, sensors, etc. Vendors in the lighting industry are designing more and more hardware for supplying controls as countries worldwide seek to generate more renewable energy due to the rising performance requirements. In addition, the hardware varies from occupancy sensors to lighting controls, both aimed at lowering platform energy usage. The lighting control hardware aids in the overall control of lights. For instance, a bank of switches or dimmers may be replaced with a single keypad providing the same function.

Based on communication protocol, the global market is bifurcated into wired and wireless segments.

The wired segment dominates the global market and is expected to grow at a CAGR of 18.2% over the forecast period. Wired lighting control systems are those in which devices communicate with each other by sending signals through wires. A wired lighting control system uses different interfaces and protocols to communicate with each other. Basic wall switches and automatic clocks or timing systems interrupting the main power to lighting fixtures are examples of wired lighting controls. Low-voltage relay panels that include low-voltage wire runs from switches, sensors, and building management systems are examples of wired controls.

Wired communication protocols accounted for the highest global lighting control system market share since they were invented before wireless protocols. A majority of the buildings still use wired lighting. Similarly, since wired lighting control systems do not need technical skills to install or run, many end-users continue using them. As a result, the need for wired connectivity protocols in lighting control systems has increased.

Based on end-use, the global market is divided into indoor and outdoor segments.

The indoor segment is the most significant contributor to the market share and is anticipated to exhibit a CAGR of 18.9% over the forecast period. The indoor segment dominated the market for lighting control systems due to the huge usage of lights and lamps from the residential, commercial, and industrial sectors. The commercial sector generated the highest revenue in the indoor segment, accounting for over 50% market share. The need for smart homes, ambiance lighting, and reduced electricity bills are the major factors driving the demand for lighting controls from the indoor segment. Moreover, the reduced cost of LED bulbs is a major factor that has led to higher adoption of LED bulbs in the indoor segment. The rising penetration of LED bulbs creates significant opportunities for further market penetration.

Recent Developments

• March 2023- Signify (Euronext: LIGHT), the global leader in lighting, announced the acquisition of Intelligent Lighting Controls, Inc. (ILC), a market-leading U.S. provider of wired control systems, thereby expanding its connected portfolio.
• January 2023- AirCare Automation launched the EOS LED lighting control system. The new EOS LED lighting control system regulates LED light modules intelligently, allowing for brightness and color variation.