Lighting-as-a-Service Market Size

Lighting-as-a-Service Market Size Snapshot

Note – Market size depicts the revenue generated over the financial year

Lighting as a Service (LaaS) is a market which is estimated to be worth about $ 2,467,000,000 in 2023. The market is expected to grow to about $ 15,400,000 by 2032. The annual growth rate from 2024 to 2032 is 22.26%, which shows the growing demand for flexible and cost-effective lighting solutions. The rising popularity of smart lighting technology and the growing focus on energy efficiency and sustainability are the main growth drivers. Lighting as a Service (LaaS) offers a cost-effective alternative to traditional lighting systems. The market is also driven by technological developments such as the integration of the Internet of Things and smart sensors. These innovations enable real-time control and management of lighting systems, which results in reduced energy consumption and improved lighting experiences. The market leaders, such as Philips Lighting, GE and Siemens, are actively involved in strategic alliances and the development of new products to strengthen their market position. In particular, Philips is a pioneer in developing smart lighting solutions that fit into the LaaS model, thereby demonstrating the enormous growth potential of this market.

Regional Market Size

Regional Deep Dive

Among the main reasons for the growing importance of the Lighting as a Service (LaaS) market is the increasing demand for energy savings, the growing importance of the concept of sustainability and the technological developments. In North America, the market is characterized by the presence of many highly innovative companies and by supportive government policies that encourage the use of energy-saving solutions. Europe is experiencing a wave of new regulations that seek to reduce carbon emissions, while the Asia-Pacific region is embracing smart lighting solutions with increasing enthusiasm. Middle East and Africa are focused on the development of their energy sources and on increasing their energy independence. The Latin American region is slowly adopting LaaS as part of its urbanization efforts. Each region offers its own opportunities and challenges, which together define the overall market landscape.

North America

• The Department of Energy’s efforts to encourage energy-efficient lighting have also helped to spur the adoption of lighting as a service in the commercial sector.
• Signify and Cree are forerunners in North America in the field of lighting as a service, offering the latest innovations and integrating IoT for more efficient energy management.
• North America’s growing smart city movement is driving demand for the latest lighting solutions, and with cities increasingly choosing lighting as a service (LaaS) to reduce their operating costs and enhance their green credentials.

Europe

• The Green Deal, the European Union’s climate-neutrality initiative, is pushing the implementation of Leasing as a means of achieving the goals of energy efficiency.
• In countries like Germany and the Netherlands, strict regulations on energy consumption are a matter of concern, which has led to a shift towards LaaS to comply with these regulations.
• As the world’s smart cities have shown, smart lighting is a key component of the digital economy. The growing trend towards digitalization is resulting in a rapid rise in the use of smart lighting technology in the field of smart lighting.

Asia-Pacific

• The Chinese government is encouraging smart cities, and this is spurring the LaaS market, with Philips Lighting and Osram launching new services.
• Energy Efficiency Services Limited (EESL) is promoting LàaS in the framework of its national programme to reduce energy consumption in public lighting.
• In Japan and South Korea, the development of IoT and smart technology has boosted the development of LS, with the main focus being on the integration of lighting with other smart city systems.

MEA

• The United Arab Emirates, in its Vision 2021, has set itself the goal of a sustainable and innovative development, and has thus emphasized the LàaS projects, especially in the context of the Smart City in Dubai.
• The National Industrial Development and Logistics Program is encouraging the use of energy-efficient lighting systems, including Light as a Service, as part of its economic diversification program.
• As the need for energy-saving solutions in Africa increases, the local authorities are looking at LS as a solution for public lighting, especially in the big cities of Nairobi and Jo’burg.

Latin America

• The National Policy on Climate Change is the main driver of the implementation of LaaS in Brazil. It is the main instrument to reduce the carbon footprint and to improve the energy efficiency of the cities.
• A new project in Santiago de Chile has demonstrated the benefits of LaaS for cities, which has sparked the interest of local governments.
• Economic difficulties in the region have led to a search for cost-effective lighting solutions, making LaaS an attractive option for both the public and private sector.

Did You Know?

“Lighting accounts for about 15 per cent of the world's electricity consumption. This makes energy-efficient lighting solutions such as Lighting-as-a-Service all the more important for reducing energy consumption.” — International Energy Agency (IEA)

Segmental Market Size

The Lighting-as-a-service (LaaS) market is playing a key role in the lighting market, which is currently growing at a fast pace and is being driven by the growing demand for energy-efficient solutions. In addition to the rising awareness of the need for energy-efficiency and the increasing importance of sustainable business practices, governments are also encouraging the use of energy-efficient lighting through the introduction of new legislation and financial incentives. In addition, smart lighting solutions, which offer integrated solutions that optimize energy consumption and maintenance costs, are also contributing to the growing popularity of LaaS.

At the moment, the use of L-aaS is already at the scaled deployment stage. Notable examples of L-aaS deployment are the successful implementations of Philips Lighting and GE Current of L-aaS projects in commercial and industrial settings. The main application areas of L-aaS are smart cities, commercial buildings and outdoor lighting where energy savings and operational efficiency are paramount. There are government regulations that encourage energy efficiency and green initiatives. IoT and AI are also driving the evolution of L-aaS by enabling real-time data collection and data-driven decision making.

Future Outlook

From 2023 to 2032, the Lighting-as-a-Service (LaaS) market is expected to increase from $2.46 billion to $15.0 billion, registering a high CAGR of 22.26%. The main driving force for this is the increasing demand for energy-saving lighting solutions, as well as the rising adoption of smart technology in urban infrastructure. As more and more companies are trying to reduce operating costs and improve their energy efficiency, LaaS has become a popular solution for them. LaaS can provide them with flexible and scalable lighting solutions based on a subscription service, thus avoiding high initial investment. In 2032, LaaS is expected to account for about 30% of the commercial lighting market, which will bring about a major change in the way businesses manage their lighting.

The development of new services, the integration of IoT capabilities and smart sensors, is expected to further accelerate the development of LaaS. These new services are not only able to optimize the energy efficiency of lighting equipment, but also enable real-time monitoring and data analysis to help users optimize their lighting usage. In addition, the implementation of the government's energy conservation and environment-friendly policies is expected to boost the development of LaaS. Also, smart city development and the public's awareness of the environment will also have an important role in the development of LaaS. As the market develops, it is necessary for all parties to keep pace with these changes, so as to seize the opportunities of the development of the LaaS industry.