At present efficiency and cost-effectiveness have gained the utmost prominence across the globe, as many people are opting for service providers instead of investing a large amount in incorporating a system. In the lighting industry, LED lights have gathered substantial importance as they are cost-effective as well as efficient in reducing energy consumption, which subsequently helps in reducing the harmful effects of electricity plants on the environment. With the advancements in the LED lighting products, the capital required to install such lighting systems have increased substantially. Hence, the manufacturers and service providers have introduced and developed a new financial structure known as Lighting as a Service (LAAS).
Lighting as a service (LaaS) has cropped us as a legit solution to the problem of high investment costs, providing users with a subscription to a customized lighting service suiting their requirements. The passing of Energy Independence and Security Act (EISA) in 2007 has led to a significant transformation in the lighting technology, which sped up in the last couple of years. To meet the new energy standards of EISA, the installation of LED lights has become necessary, but the high investment cost has restrained its expansion. LaaS solves this problem effectively by dividing the upfront cost into easy monthly rents and saves from missing out on latest developments in the LED technology.
The market for LaaS is expanding gradually across the globe and the global lighting as a service market is expected to reach $4.74 billion by 2025. Besides the advantages of nil upfront investment and the option of nominal upgrades within the existing operational cost, there are constant energy savings for the consumers, which subsequently helps in reducing the damage to the environment. Another major issue that lighting as a service business model aims to solve is that of energy management, which includes cost reduction, energy price fluctuations and supply shortage reduction, and carbon emissions reduction.
Integration of Internet of Things (IoT) and sensors in the lighting system has increased efficiency and given more control to the service providers to constantly monitor lights. The sensors in the room adapt the lighting according to the usage pattern of the rooms, adjusting brightness as per the occupancy and requirements, and help facility managers with the data of a room to optimize the space. The applications of such internet enabled lightings are endless with numerous possibilities, and currently, some companies in the LaaS market are providing a set of offerings along with LED while others are just providing the equipment.
Geographically, North America acquired the largest market share in the year 2016, which is attributed to the presence of the market leaders in the lighting industry and government's policy to reduce energy consumption in the region by replacing old lighting with the more efficient LED lighting. Among applications viz. Commercial, Industrial, and Outdoor, the commercial segment is expected to dominate the market from 2017 to 2025, and would also register the highest growth during the forecast period.
BIS Research has conducted an extensive research on global lighting as a service market, and compiled the observations and insights in a report titled ‘Global Lighting as a Service Market, Analysis and Forecast (2017-2025)'. The market intelligence report aims at providing an in-depth analysis of the key development strategies, marketing strategies and market trend dynamics which include drivers, restraints, and opportunities prevailing in the industry.
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