Lighting

Longer Life-Cycles & Price Pressure Push LED Manufacturers Towards Smart Lighting Control

For LEDs, the push into the building lighting market is well under way, driven by improving energy efficiency of the technology and a longevity that is almost unmatched by competing lighting technologies. Memoori’s analysis http://memoori.com/portfolio/led-lighting-in-buildings-2014-to-2018 indicates that market penetration expressed in terms of overall revenue generation of lighting in buildings grew to around 14% at the end of 2013. Beyond the often cited initial cost barrier, other factors such as the incompatibility of legacy lighting systems, mixed consumer awareness and perceptions of LED lighting are still to be overcome. It seems clear that several different lighting technologies will coexist for a few years to come. Although buying choices and procurement philosophies of both consumers and commercial facilities managers have traditionally focused on initial costs, one of the key benefits of a switch to LED lighting lies in its lower total cost of ownership. The goal for LED manufacturers is now to convince consumers to migrate […]

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For LEDs, the push into the building lighting market is well under way, driven by improving energy efficiency of the technology and a longevity that is almost unmatched by competing lighting technologies. Memoori’s analysis http://memoori.com/portfolio/led-lighting-in-buildings-2014-to-2018 indicates that market penetration expressed in terms of overall revenue generation of lighting in buildings grew to around 14% at the end of 2013.

Global Lighting Market Penetration

Beyond the often cited initial cost barrier, other factors such as the incompatibility of legacy lighting systems, mixed consumer awareness and perceptions of LED lighting are still to be overcome. It seems clear that several different lighting technologies will coexist for a few years to come.

Although buying choices and procurement philosophies of both consumers and commercial facilities managers have traditionally focused on initial costs, one of the key benefits of a switch to LED lighting lies in its lower total cost of ownership.

The goal for LED manufacturers is now to convince consumers to migrate from a fixed cost of light to a service cost. 5 year payback is a very tough sell; lighting controls can move payback nearer to 2 / 3 years.

How quickly a return on investment can be made on LED lighting versus traditional lighting methods depends of course on both the application and the proportion of time the light is switched on.

The current rate of cost decline in LED lighting systems is about 18 % a year. At the time of publication of our research, the average global selling price of LED light bulbs that can replace standard 40-watt bulbs had declined to US$15, while that of 60W-equivalent LED bulbs dropped to around US$21. Prices will continue to drop significantly year on year until around 2018 before starting to level off.

Projected Retail Price Track LED vs CFL

Going forward, successful revenue growth in LED lighting will be dependent not only on promises of longer life and energy efficiency, but also on effectiveness, upfront costs, consumer confidence and improved functionality.

For LED manufacturers to survive in an increasingly competitive market place they will have to embrace innovation and continue to invest in R&D.

Memoori’s research shows that Smart lighting systems are today in use in only a very low percentage of buildings - http://memoori.com/portfolio/smart-buildings-the-lighting-controls-business-2013-to-2017. LED lightings’ controllable nature makes it well suited for use with sensors in smart lighting applications for a number of purposes including increasing energy savings.

With the ‘Internet of Things’ coming closer to reality and LEDs providing the potential to control every aspect of a light’s characteristics; smart lighting control systems provide another huge potential growth area for lighting companies.

Installation of new LED lighting systems is helping to stimulate increases in the installation of intelligent lighting controls such as occupancy sensors, photosensors and wireless networks that link them. Combining digital LEDs with advanced sensors, control systems and artificial intelligence will reduce the need for separate systems to manage each of these functions.

Also a growing number of innovative companies and universities have also successfully demonstrated the potential of Visual Light Communications (Li-Fi). Using light to increase the speed and rate at which data can be transferred from point to point. These experiments prove that a visible light communication system can be produced to transfer data at speeds up to 10Gbps, which is 666 times faster than average broadband speed in the UK.

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