Vrinda Bhandarkar, Director of Research, LED Lighting at Strategies Unlimited, a unit of PennWell Corporation, explained that the market today is primarily based in Europe, the US and China. “The US market has taken the lead in proving the viability of LED technology for outdoor applications. Through various programs within the DOE and the Design Lights Consortium, the US has educated the city officials and customers, regarding LED technology, the energy efficiency it can provide, lumen depreciation, and other issues,” she said.
As a result, there have been several large-scale street lighting projects in cities and municipalities in the US. More successful pilot programs are moving toward full-scale implementation as well. Likewise, Europe has very high quality standards and has also implemented a variety of pilot-line and full-scale street lighting programs. “The large cities that have implemented street lighting programs have done so because the utilities wanted to reduce operating cost – lower energy cost and reduced maintenance cost,” said Bhandarkar. She added that funding from various sources, including stimulus funds, have helped the projects move forward.
“The biggest challenge these cities have is raising the capital, especially in this difficult environment,” she added.
However, Bhandarkar describes a very different situation right now with the street lighting market in China. “The government provided strong incentives to replace streetlights with LED-based streetlights, and they expected great savings in energy use. However, after installation, several streetlights prematurely failed.” Poor quality issues caused the Chinese government to respond by halting street lighting projects temporarily. In fact, the street lighting market in 2011 shrank to address these quality issues.
“Now, they are in the process of putting standards in place, because China realizes that without standards they cannot be assured that the LED luminaires they are installing have the required quality they need,” she said. The next step, once standards are established, will be to re-start street lighting installations in China. At that time, the top 10-15 street lighting luminaire suppliers will start bidding on projects again.
Bhandarkar went on to talk about the enormous opportunity for worldwide implementation of street lights and area lights. She said the biggest opportunities exist where older, inefficient lighting technology is in place. “This starts with mercury vapor lamps, linear fluorescent lamps and incandescent lamps; these are no-brainer applications right now because they pay for themselves in energy savings alone.
High-pressure sodium lamps are another type of fixture that is ripe for replacement. “LEDs can provide superior light quality, directionality, uniformity of light with reduced lumens,” said Bhandarkar.
Going forward, Strategies Unlimited expects LED luminaire prices to continue to drop, which helps accelerate the street and area lighting market. Though the market research firm is expecting a 26% CAGR in unit growth between 2010 and 2015, revenue growth will be more modest, at around 11% CAGR in the same period due to price reductions.
More information on the report can be found on the Strategies Unlimited website.