There could not be a better time for Lighting Controls companies to grab the initiative and increase their revenues in a rapidly growing world market; At the same time positioning themselves to move into the wider Building Internet of Things (BIoT) business.
Our Recent Research on this business shows the global value of lighting product controls in 2015 at $2.208 billion at factory gate prices and the chart below shows that we predict demand will grow at a CAGR of 10.6% to 2020, with full Bus based controls delivering a GAGR OF 16.5% over this period.
There are a number of reasons why this once mature low growth business is morphing into a vibrant high growth market having a bright future well into the next decade. They centre on the technical developments in both LED Lighting and its Control that have dramatically changed the value of lighting control products and their ability to meet customer value propositions.
The environmental impact of buildings and the necessity for sustainable design were key questions being addressed at the COP21 United Nations Climate Change Conference in Paris last December. In the build up to the summit, the United Nations recognised that building stock is one of the most economically advantageous avenues for reducing global energy use and greenhouse gas emissions. Consequently, and in line with the launch of Global Alliance for Buildings and Construction, the fourth day of the COP21 was named Buildings Day.
Hosted by the World Green Building Council with the help of UNEP and other partners, the sector aims to scale up attempts to de-carbonise. During the event, the World Green Building Council gave a statement to bring about ‘global market transformation’ which plans to achieve ‘net zero greenhouse – gas emissions’ as well as energy efficiency retrofit of existing stock by 2050.
Lighting Control is a low hanging fruit here and could make a very significant contribution to reducing CO2 emissions in buildings and the impact of this movement should make energy conservation a much more positive driver.
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The changes in technology and new opportunities that it presents makes 2016 a really exciting time to be in the lighting controls business. There is every reason to be optimistic about the future, but only for those companies that have the agility to adapt to both the technical and commercial challenges they will meet. Our report shows that whilst it will have to operate in a rapidly changing market and within an increasingly volatile global economic environment, a solid if not exciting growth is assured over the next 5 years and beyond.
The main challengers affecting the predicted value of the market relate to global, macro-economic conditions and our belief that the actual cost of lighting control products will fall over time unless there is a radical reevaluation of performance and functionality that justifies a better price.
This can be seen in the way LED values have fallen through aggressive pricing from Chinese manufacturers which has forced three of the world’s top lighting manufacturers to radically change their business strategy; With the No1 Philips intent on selling off its lighting business, Osram selling off its LED business and GE moving up the value add digital connectivity chain but leaving behind its general lighting business.
In Smart Buildings: The Lighting Controls Business 2015 to 2020 we show how the supply side has strengthened over the last five years as a new set of companies with innovative products are growing fast and challenging the long established leaders.