LED lighting boom will stay long in India, on account of the ever-increasing need for smart, connected lifestyles and energy-efficiency measures. Let us catch the pulse of the industry.
The Indian lighting industry in India is evolving rapidly due to a shift from conventional products to LEDs, driven by an increasing number of government initiatives for energy conservation, rising consumer awareness for energy-efficient products and innovative products offered by the industry in sync with the mega trend of digitisation. This evolution indicates a tectonic shift in technology from electricals to electronics representing significant growth opportunities for organisations offering electronic hardware/components, products and solutions used in LED lighting as well as prototype designers, electronics manufacturing service (EMS) providers and original equipment manufacturers (OEMs). In this report we try to provide insights about India’s LED lighting ecosystem, focusing primarily on market size, opportunities, major demand-generating applications, hindrances that impact growth and emerging technology trends.
India, being the second most populous country and the fifth major electricity consumer, has been witnessing an ever-widening demand versus supply gap in electricity. Consequently, the market for energy-efficient products, such as LED lighting products, is bound to grow riding on government initiatives encouraging use of LED lights and increasing focus on smart city projects, efficient public distribution systems, and the ever-increasing need for smart, connected lifestyles and energy-efficiency measures. The Electric Lamp and Component Manufacturers Association of India (ELCOMA) shares that the LED market will grow to ` 266 billion by 2020, making the LED market ~80 per cent of the total lighting industry.
According to a report by global research-based consulting firm TechSci, the LED lighting market in India is projected to register a CAGR of over 24 per cent during 2016-2021. The Indian LED lighting market stood at US$ 918.70 million in 2016, and is projected to grow at a CAGR of 24.66 per cent in value terms during 2016-2022, to reach US$ 3758.74 million by 2022 on account of the increasing number of government initiatives to boost LED adoption and growing awareness regarding lower power consumption of LED lighting products.
Moreover, easy availability at affordable prices coupled with distribution of LED bulbs by Indian government to promote the use of LED lights over halogens and incandescent lighting products is augmenting the demand for LEDs in the country.
Key factors that are expected to boost the market include declining LED prices along with favourable government initiatives that provide LED lights at a subsidised cost and promote LED streetlighting projects through special ESCO model by Energy Efficiency Services Ltd (EESL). Moreover, rising consumer awareness about the cost-effectiveness, enhanced life, better efficiency and inherent eco-friendly nature of LED lights will continue to drive volume sales from industrial, residential and commercial sectors.
Since LEDs are versatile products, these can be used for residential lighting, streetlighting, downlighting, landscaping, monument lighting, signage, traffic signal lighting, security lighting, industrial lighting, office space lighting, automotive lighting and much more. Low energy consumption, low costs, modular designs and ease of use have made LED lighting the first choice for industrial, commercial and domestic applications.
Major demand-generating application areas are:
- Residential lighting
- Office space lighting
- Industrial lighting
Demand for streetlights is driven by government initiatives. Whereas, demand for LED lighting products used in residential and office spaces is mainly driven by increasing consumer awareness about energy-efficient products with more functionalities. Increasing demand for LEDs for industrial areas including warehouse, manufacturing floors and so on is a new trend. In hazardous work areas across industries, most of the new lighting requirements are for LED lighting.
Demand for LED lighting in India is still mostly driven by metro cities due to affordability, awareness and socio-economic growth. However, demand from tier II cities is expected to grow on account of the potential applications for streetlighting and industrial lighting. Demand for LED lighting from rural India is also going to increase significantly, owing to government initiatives (through EESL) for implementing rural LED streetlighting projects of the country by retrofitting conventional streetlights with LED lights in Gram Panchayats under Street Lighting National Project (SLNP). Further expansion of such initiatives across the country will open new market areas for the LED lighting industry. Retro-fit installations are in demand across all kinds of application areas.
Smart ways to grow
With rapid urbanisation and growing consumer awareness, the lighting industry foresees a growing demand for smart lighting solutions in Indian homes. Additionally, there is a growing potential for connected lighting solutions for offices and commercial buildings.
City streetlights have also become intelligent and can serve as a vital backbone for city administrators. An interactive city system allows the authorities to remotely monitor and control lights across the city from the control room itself. Faulty lights can be detected accurately through GPS technology in the pole and, hence, repairs can be carried out immediately, thereby reducing downtime. Lights can also monitor air quality, traffic, temperature and noise, and feed these to city administrators for analysis.
Lighting systems get smarter as a vision for autonomous, self-commissioning illumination systems is emerging. With the advent of LED lighting, the industry has transformed from analogue to digital, as LED lighting allows users to control, monitor and measure lighting output. This transformation is taking place across public, home and professional lighting, and smart connected LED lights will emerge as the largest Internet of Things (IoT) device in the next five to ten years. Control devices, dimmers and wireless lighting with advanced sensors will cater to the needs of modern consumers.
According to a study by Nielsen, lighting control is the most frequently used daily home automation feature. Smart lights appear on a shortlist of technologies beginning to appear on many buyers’ must-have lists because of their ability to improve security and comfort, and cut electricity costs. According to Gartner, smart lighting applications are expected to continue growing to reach 2.54 billion units installed by 2020 globally.
Smart lighting can be considered more like a service than a product, as it ensures a better experience. For example, instead of switches and push buttons, motion sensors are used to control lights automatically. This, in turn, reduces human intervention and saves energy. Smart lighting also offers more convenience in other ways, such as a change in colour as per weather conditions, light pulse to replace the doorbell sound and so on.
Leading brands are paving the way with smart LED bulbs and switches that connect to Wi-Fi and offer app, button and voice controls over positioning, brightness, warmth and colour of connected bulbs. The major technology behind smart connected homes is the IoT and, according to Strategy Analytics, IoT growth is higher than ever, but annual growth will begin to tail off as the market normalises in the near future, dropping to nine per cent by 2021.
In a study, it was found that most of the consumers are worried about the security of their home while they are away. Smart homes have a solution for this, too. Lights that come on at certain times of the day—indoors and outdoors—give the illusion that occupants are at home and create a more secure environment. There are multiple ways to customise this, too. As a homeowner drives up to his or her home, lights can come on with geofencing. Alternately, he or she can remotely use an app to turn the lights on. It can be as simple having lights on a timer, too.
Currently, smart lighting technology has been adapting to seamlessly integrate into smart home systems. Bluetooth-enabled systems that do not rely on the Internet need only the app and the fixture to operate. Even light switches and bulbs may look completely different in ten to fifteen years as consumers are looking for cleaner and sleeker designs.
The digital nature of LED technology has brought illumination and IT together, allowing lighting systems to participate in the IoT. This has further led to the emergence of connected lighting, marking a significant shift and transforming lighting from a commodity product to a fully-integrated lighting system that can seamlessly connect with a wireless network or Ethernet, allowing users to remotely control and monitor their lighting systems. Thus, new LED lighting systems will be an outcome of right partnerships between traditional players and IT enablers.
Introduction of Light-Fidelity (Li-Fi) technology will also help the industry evolve to a great extent. This high-quality LED lighting-based technology provides a broadband Internet connection through light waves, thereby reducing exposure to an electromagnetic environment, currently caused by radio waves and Wi-Fi.
However, rather than following what developed countries have done in smart or connected lighting, the Indian lighting industry needs to focus on ease-of-use and price-sensitivity issues for the Indian market.