Over the last ten years, light emitting diodes (LEDs) have revolutionized the backlighting market for consumer electronics such as mobile phones, tablets and TVs. Further technology improvements and declining costs are now opening up new applications for LEDs. The general lighting segment in particular, offers a tremendous growth opportunity for the LED value chain.
LED lighting consumes up to 90% less power than regular incandescent bulbs and 50% less than fluorescent lights, significantly reducing electricity costs
LEDs currently offer the best combination of characteristics important in lighting: long life, high lumen output, good color quality (CRI), color control, dimming option, precise on/off timing, low heat release and a longer lifetime. In combination, these features offer a key advantage over other light sources: energy efficiency and reduced maintenance costs. LED lighting consumes up to 90% less power than regular incandescent bulbs and 50% less than fluorescent lights, significantly reducing electricity costs.
The case for more efficient lighting is obvious: lighting consumes almost 20% of the world’s electricity
The case for more efficient lighting is obvious: lighting consumes almost 20% of the world’s electricity, yet the current installed base of lighting products is extremely inefficient. At the city-level, LED streetlights provide significant cost savings potential as street lighting can account for up to 40% of a city’s electricity bill.
In addition to improved energy efficiency and reduced costs, LEDs offer multiple other advantages such as the ability to integrate them into a networked infrastructure, making up an integral component of a city’s common infrastructure. Such a network can be leveraged by a plethora of new applications including intelligent traffic lights and electric vehicle charging stations, enabling the proliferation of smart cities and smart homes in developed markets, as well as in the electrification and expansion of the electric grid in developing markets.
"With a market size of close to USD 100 billion – and growing – the global general lighting market represents an enormous opportunity for the LED lighting supply chain"
Companies that are well positioned to benefit from a growing LED lighting market include equipment suppliers Veeco and GT Advanced Technologies, testing equipment supplier Chroma ATE, materials suppliers such as Rubicon, and integrated companies with strong patents, technological capabilities and access to the market, such as Epistar and Philips.
With the expansion of networked lighting, companies offering networking infrastructure and control software – such as Silver Spring Networks and Schneider Electric – also stand to benefit from growth in the LED lighting segment.
Article by Bojana Bidovec, Senior Equity Analyst
RobecoSAM Smart Energy Strategy