by Shane Henson — March 25, 2013—More building owners are turning to light-emitting diode (LED) lighting products to brighten rooms because of their reasonable cost and long life, according to business consulting firm Frost & Sullivan. Per new research discussed in its recent report, Analysis of the North American LED Lighting Market, the indoor and outdoor LED lighting market earned revenue of $1.15 billion in 2012 and is expected to reach $3.63 billion in 2017.
“The need to conserve energy by upgrading older systems to LED lighting is a key driver for the market,” explains Frost & Sullivan Energy and Environment Industry Analyst Alejandra Lozano. “In particular, we find there is higher adoption of energy-efficient lighting in the outdoor segment due to government funding for lighting upgrades in exterior applications.”
The North American LED lighting market will also get a leg up from supportive legislation, such as the Energy Policy Act of 2005 and Energy Independence and Security Act of 2007, which mandates greater energy efficiency of general service incandescent lamps. The legislation also hastens the market introduction of efficient and high-performing solid-state lighting (SSL) products, including LED lighting, says Frost & Sullivan.
However, despite the thrust from the government, the higher initial costs of LED lighting products compared to that of competing technologies restrain their adoption. The economic downturn of the last few years has made end users particularly prudent as they demand cost effective systems that also offer energy savings.
Although the operating costs of an LED lighting system are low, the capital expenditure of LED lighting products is often prohibitive to end users that do not have a clear vision of the short- to medium-term return on investment from energy savings. The technology will experience wider uptake as ongoing research helps lower costs of production, making LED lighting more affordable, explains Frost & Sullivan.
“Educating customers about the lifecycle cost benefits of installing an LED lighting system and demonstrating the energy savings that are achievable with these systems are vital to market success,” concluded Lozano.
