Advanced Lighting Demand to Exceed $11 Billion in 2015

US demand for advanced lighting is forecast to increase 9.3 percent per annum through 2015 to more than $11 billion.  A government-mandated phaseout of traditional incandescent lamps and a projected improvement in the cost effectiveness of advanced lighting will drive gains.  Starting in 2012, the Energy Independence and Security Act of 2007 (EISA) will limit US lighting sales to products that meet certain energy efficiency standards.  The elimination of traditional 40-100 watt incandescent lamps will power growth in advanced lighting sales through 2015.  The much longer useful lives of advanced lighting products will decrease the average replacement rate for residential lighting and eventually depress advanced lighting demand. These and other trends, including market share and product segmentation, are presented in Advanced Lighting, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

In nonresidential building and outdoor lighting applications, traditional incandescent lamps account for a smaller share of the market, so the EISA will have less impact on advanced lighting demand.  Instead, a projected decrease in the cost of advanced lighting, particularly for light emitting diodes (LEDs), will spur demand growth through 2015.  Businesses, institutions and government entities will turn to advanced lighting products to lower energy expenses and to reduce the labor costs of replacing lighting products.

Demand for LEDs will grow the fastest of any advanced lighting product through 2015, rising nearly 15 percent per year to $6.1 billion.  Increased penetration in the residential building market will support advances.  While the EISA will also boost unit sales of compact fluorescent lamps (CFLs) and halogen lamps through 2015, over the long term LEDs are expected to take market share from these types.  LEDs consume far less energy than halogens, do not contain mercury (unlike CFLs) and last considerably longer on average than halogens or CFLs.  These advantages, combined with a rapid decline in unit prices, will eventually result in LEDs leading the residential market in both unit sales and value demand.  Sales of metal halide lamps (a type of high intensity discharge lamp) and halogen lamps will benefit from a projected rebound in motor vehicle manufacturing through 2015. 

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.