The lighting market size is undoubtedly growing rapidly. it will increase by $54.76 billion between 2023 and 2028 at a compound annual growth rate (CAGR) of 6.89%.
What is propelling this growth? There are several factors. The main reason is the demand for energy-efficient and cost-effective, advanced lighting solutions. Lighting companies are meeting this head on by focusing their efforts on innovation and technology.
Additionally, many governments are supporting the use of more efficient lighting, there are incentives for homebuilders and homeowners to use more sustainable lighting, and manufacturing costs for are continuing to fall.
The industrial lighting sector is also expected to see growth, thanks in part to improved road safety measures that include the use of more effective lighting. And is improving in commercial sectors, increasing productivity and decreasing accidents.
The smart revolution: IoT and connectivity
Our homes and buildings are increasingly (Internet of Things) and smart systems.
Lighting schedules and settings can be controlled remotely via smartphones or voice assisted software, and programmed to turn on or off at specific times. They can also switch on and off using motion sensors. This works well for homeowners’ security and energy efficiency as smart lighting can mimic occupancy, meaning lights are only used when needed. Additionally, IoT sensors found in light fittings can communicate with smart personal fitness devices to learn and then encourage natural circadian rhythms.
Commercial buildings benefit massively from smart lighting, saving a huge amount of wasted energy when premises are unoccupied. Smart systems can also adjust artificial lighting based on the amount of natural light. This is important for productivity as it ensures optimal illumination levels for the task in hand while saving energy.
From Products to Services: The Rise of LaaS
Lighting-as-a-Service (Laas) is another growth area within the lighting industry, according to several Gartner reports. It works on the basis of an all-inclusive subscription-based pricing model. Rather than paying for lighting on a monthly or annual bill, it is charged on a subscription basis. When a system needs upgrading, this is taken care of by the service provider, and included in the subscription price, avoiding further expenditure.
LaaS becomes particularly economic as older, more conventional systems become obsolete and need upgrading to LED.
As a sector, LaaS has seen a substantial growth over the last few years and this looks set to continue - the demand for energy-efficient lighting systems is increasing and more buildings are incorporating their lighting systems into IoT. According to the latest report published by , the global LaaS market size is expected to reach $6.28 billion in 2027 with a CAGR of 46.1% during the same timeframe.
Global expansion: illuminating new horizons
This projected growth in lighting isn’t concentrated just in Europe and the US. Latin America, the Middle East and Africa are leaders in lighting market growth, and by 2028 is expected to come from Asia-Pacific. China, in particular, is seeing substantial expansion due to the large number of LED manufacturing facilities in the region and the Chinese government's subsidised support for the technology used in LED production.
Future proofing our way of life has an impact too. There has been a rise in smart cities in urban areas around the world. projects, the smart city boom is expected to further grow the lighting market.
The human element: wellbeing and experience
The lighting industry is increasingly recognising that its products and services have a profound , productivity and overall quality of life.
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Emotional and psychological impact: Lighting systems are being designed to influence mood and behaviour in various environments, including work and home. Lighting solutions that mimic natural light patterns and integrate with greenery are being used to create more organic, stress-reducing environments in urban spaces.
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Cognitive performance: task-specific lighting helps with different cognitive tasks, such as focused work, creative brainstorming or relaxation.
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Improve sleep patterns: advanced lighting systems can follow the natural progression of daylight, supporting our circadian rhythms and potentially improving sleep quality, mood and cognitive function.
A bright future
The lighting industry is not just about illuminating spaces anymore; it’s about enhancing human experiences, supporting wellbeing, and laying the groundwork for smart, responsive environments.
As we’ve seen, the lighting industry is experiencing multiple technological and market trends. This converging of innovations is a driving factor in the next few years’ growth and development of the lighting industry.
Moving forward, lighting will continue to be a critical element in how we design our world, intertwining with various aspects of technology, health and the environment to create a brighter, more connected future for all. The next five years is promising to unveil even more technological advancements and innovations, with the lighting industry growing across the world to meet the ever-increasing needs for smart and human-centric solutions.
