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Infrastructure Bill and Energy Policy to Drive LED Lighting Sales

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Infrastructure Bill and Energy Policy to Drive LED Lighting Sales

September 17
14:54 2021

As far as the US Lighting Energy Policy is concerned, it is now moving towards increased efficiency to reduce greenhouse gas emissions and energy use. People can notice the lighting efficiency improvement in the USA through different acts and standards.

The Energy Independence and also Security Act of 2007 have laid out changes in the legislation for lighting in the United States. This new setup for performance standards and also the phase-out of the old incandescent light bulbs need the use of much more efficient fluorescent lighting.

The purpose of EISA 2007 is a small effort to increase our lighting efficiency by about 25 to 30%. Those opposing the EISA 2007 have been demonstrating by the Light Bulb Freedom of Choice Act and the Better Use of Light Bulbs Act.

The market of LED lighting is segmented by various applications both indoor as well as outdoor, distribution channels like wholesale/retail and direct sales, type of product like lamps and luminaires, and Geography.

Market overview

In the year, 2020 the LED lighting market was considered to be USD 75.81 billion in values, and now it is projected to reach almost USD 160.03 billion by the year 2026. This will be over the period 2021 – 2026, at a rate of almost 14.25% CAGR.

By switching to energy-efficient LEDs, there will be an estimated savings of almost USD 18 billion in the cost of electricity that can be achieved. Also, they can avoid carbon dioxide emission every year by more than about 160 million metric tons.

According to Dara Greaney, the CEO of LEDLightExpert, “You have the perfect trifecta of demand generation for LED Lighting; 1. An aggressive Biden administration climate agenda, 2. A looming massive infrastructure bill and 3. An equality push for improved safety and looks in less equitable areas. That means brighter and better lighting.”

The following are the highlights of the market overview:

  1. Lighting will account for almost 10% of the usage of electricity in households and about 18 to 40% of various commercial premises. All across the world, now there is a growing demand for energy-saving and that is creating a great scope for the market.

By 2030, it is expected that this transition to various energy-efficient lighting will reduce the demand for global electricity for lighting by almost 30 to 40%.

  1. Countries all across the world are now widely adopting LED lighting. For example, New York has planned to replace about 250,000 streetlights with LED lights, which will soon be followed by all the replacement of various decorative lights present in the urban areas.

In Spain (Barcelona) more than 3,000 streetlights were deployed based on LED technology that is gathering information about humidity, pollution, noise, and also the overall environment.​

  1. Also, the US Department of Energy has anticipated that by the year 2020, about 75% of the shipment of outdoor luminaire would be LEDs. Assuming the LED luminaire’s efficacy surges an extra 50% over the current levels by the year 2020.
  2. Because of the growing awareness of the consumers about the environment and also the durability of these LED lighting and the government orders for energy efficiency are driving the increasing adoption of LEDs.

For example, as part of the green initiatives, Chennai Airport has bought 6 sets of LED-based lights meant for disaster relief that is also a part of the various measures for making its lights and also fixtures energy-friendly.

  1. Also, smart lighting is likely to be the LED lighting future, with various companies, e.g. Philips, Xiaomi, Magiclight, are investing in this technology. Philips is considered to be the market leader with its Hue product, but many are becoming compabtible based on the Alexa/Apple/Google smart home compatibility.


Key market trends

A significant growth rate in the commercial segment is expected soon.

  • In the present market scenario, different LED light bulbs are now enduring the phase of early adoption of the life cycle of the product. However, LED lighting technology is advancing, and due to this, product offerings are entering into an advanced growth phase. ​
  • Recent advancements in LED technology have allowed these LED lighting products to further penetrate into the commercial lighting markets, with massive growth potential. Various commercial buildings, including stores, offices, restaurants, schools, and hospitals account for nearly 20% of the USA’s total energy consumption, and 38% of the energy consumption is only attributed to lighting.
  • Besides, major American manufacturers are also actively developing the LED light business with the growing LED light penetration rate. In the US market, demand for LED commercial light is strong. That also includes the demand for tunnel lights, panel lights, and also high bay lights. 
  • Many of the LED brands are offering its selectable commercial recessed light, which comes with a selection for wattage, color temperatures and making these adaptable for different corporate settings.
  • The rapid urbanization and also various construction activities happening in the commercial areas of many different countries are going to fuel the market demand soon. However, due to the COVID-19 pandemic, there is a short-term decline in demand because several commercial constructions have temporarily halted

As per Dara Greaney, “The current US government’s climate goals are going to require energy reduction including a larger dependence on LED lighting and smart controls”.

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