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Lighting market to shrink as LEDs displace conventional technology

Longer lasting LEDs are anticipated to displace more than 52% of the global market for lamps in commercial buildings by 2021

Improving lighting efficiency is an investment for the future. While today, cost remains a barrier to the adoption of more efficient lighting, particularly LED lighting, those costs are declining rapidly and mass adoption could happen in a relatively short timeframe. 

According to a recent report from Pike Research “Energy Efficient Lighting for Commercial Markets”, LEDs will displace more than 52% of the global market for lamps in commercial buildings by 2021. 

The firm anticipates that the combination of declining prices for LED lighting and the accompanying extended lamp lifetimes will have the effect of shrinking the overall value of the market.

While revenues from LED lamps in the commercial sector will rise by 8.5% through 2021, to $2.7 billion, Pike Research expects the overall market for commercial lighting to peak at $54 billion in 2012 before contracting through the remainder of the decade, hitting about $30 billion in 2021.

“It would be hard to imagine in today’s world that technology will not beat out tradition,” says senior analyst Eric Bloom. “The commercial lighting industry will undergo a transformation over the next 10 years that will result in a significant drop in direct revenue from unit sales. Lamp and luminaire manufacturers and others in the value chain will have to rely on lighting controls and services to offset the revenue and profit lost in this process.”

On a global scale, the trend toward efficiency is highly correlated with economic and infrastructure conditions. While Europe and Asia are conservation-minded and open to government programs to limit consumption, the United States is highly fragmented due to state-driven codes and regional electric rate variations, and is comparatively new to the concept of conservation. Much, but not all of Africa, the Middle East, Latin America, and parts of Asia are working toward developing adequate infrastructure and are
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