Street and Roadway Lighting Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Street and Roadway Lighting Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The street & roadway lighting market is projected to register a CAGR of 6.2% during the forecast period. The increasing complexities in transportation infrastructure have expanded the need for enhanced illumination on the streets and roadways in order to ensure smooth traffic flow and ensure people's safety on the streets while maintaining cost-efficiency.

Key Highlights

• Roadway lighting is considered an important safety feature for busy streets and highways, where visibility is essential. According to CED Engineering, proper lighting can be expected to reduce night crashes by approximately 30%, thereby improving safety for drivers, riders, and pedestrians.
• According to the UN, 68% of the total world population will live in urban areas by 2050. It will put tremendous pressure on limited city resources and lightning streetlight costs for 30% to 50% of a typical city’s energy bill. For instance, the European Commission stated that they pay more than EUR 10 billion annually to power their streetlights. Therefore, with smart street lights, cities can conserve energy, decrease CO2 emissions, limit light pollution, and lower operations and maintenance costs.
• Many economies are undertaking various smart city initiatives and are viewing smart street lighting as an ideal starting point that provides energy savings and operational savings. It provides real-time visibility and control with smart city management software.​
• For instance, in August 2021, The Abu Dhabi Investment Office (ADIO) pre-qualified nine businesses for Phase 2 of its Road Lighting LED public-private partnership (PPP) project tender, which is being run in association with the Department of Municipal and Transport (DMT). The Abu Dhabi Road, Lighting Programme project entails the financing, delivery, installation, operation, and maintenance of 135,742 LED energy-efficient luminaires throughout the emirate of Abu Dhabi.​
• Further, in September 2022, the foundation stone of 14 smart city projects was inaugurated in Jammu, India, worth INR 113 crore. The increasing adoption of smart city projects is further expected to boost the market studied over the forecast period.
• Amid the COVID-19 pandemic scenario, the lockdown enacted by nations worldwide resulted in the shutdown of manufacturing facilities, combined with strict restrictions on social movement. This impacted the overall operations of LED manufacturing facilities.​ Furthermore, the global impact on the LED lighting market was witnessed with the disruption in global supply chain operations, shortage of metals and poles, and logistics-related services that resulted in low production of street and roadway lighting. All these factors may result in a marginal dip in the market size.​

Key Market TrendsLED Lights Segment to Exhibit Significant Growth

• LED lights produce light approximately 80% more efficiently than any other light bulb, such as fluorescent and incandescent lights. 95% of the energy in LEDs is converted into light, and only 5% is wasted as heat, which pushes users to opt for a more economical form of lighting.
• LED lights provide consistent light by improving the overall visibility and provide added security for street and highway locations. They can also be paired with motion sensors, photocells, and timers to offer a lighting control system for efficient usage.
• The International Energy Agency (IEA) estimated that road lighting accounts for 4% of total global light, and a switch to LED lights can save an average of 50% in energy costs, which results in global savings of USD 160 billion energy costs, and 555 million tons of CO2. Further, according to IEA, it is expected that the LED penetration rate will be 87.4% of the global lighting market by 2030.
• Moreover, government initiatives are also fueling market growth, as many governments across the world are structuring regulations for encouraging LED adoption. For instance, in India, the government's initiative, such as SLNP (Street Light National Program), which is an initiative to replace 21 million streetlights with LED, further contributes to the market growth.
• Additionally, LED lighting applications provides color across the full spectrum and thus help in improving the aesthetics of outdoor spaces, bridges, roads, and buildings. For instance, in August 2022, the Government of Pittsburgh decided to install LED lights on three of the city's sister bridges. The installation of 601,440 colored LED lights across the three bridges that connect Downtown Pittsburgh to the North Shore will begin in September with the Rachel Carson Bridge. The project is anticipated to be finished by the end of 2023.

Asia-Pacific to Witness the Fastest Growth Rate

• Asia-Pacific is expected to witness the fastest growth because of the increasing smart city initiatives in this region. Smart street lights are the backbone of the smart city project due to the benefits associated with LED lighting.
• Additionally, in countries like China and India, governments are encouraging the adoption of LED technology for roadway and highway applications in order to save energy and maintenance costs.
• Further, in order to promote investments in the market, the Indian Government has only imposed a free tariff (basic tariff) on LED component imports, facilitating the LED products to enter the market as semi-finished products.
• China aims to encourage 100 new smart cities from 2016 to 2021 to lead the country's urban planning and development. Over 1,000 smart city pilot projects across the globe are ready for and are under construction, and China is home to about 500 of them, covering small and big cities.
• Also, Thailand's Government is planning to achieve the mandate of 100 smart cities within 20 years. This is expected to drive the growth of the market in the region. Further, the Indian Government launched the smart city project, and under the union budget 2021-22, the smart city mission was allocated Rs 6,450 crore as compared to Rs 3,400 crore in FY 2021.
• The wider adoption of LEDs in street lights is due to their energy-efficient feature. For instance, the Greater Hyderabad Municipal Corporation (GHMC) saved Rs 84.48 crore in 2020-21 by using LED street lights, and the state has saved Rs 49.93 crore until October 2021.

Competitive Landscape

The street and roadway lighting market is fragmented and highly competitive owing to the presence of a large number of regional and international players across the globe. Some of the major players are Signify, OSRAM, Cree, among others. Road lighting is an essential service provided by governments to ensure safety and security at night for its citizens, and significant infrastructure developments, such as the construction of highways for connecting cities, are a few factors because due to which companies are entering this market. Some of the recent developments are:

• April 2022 - Ams OSRAM has announced its plans to develop a LED plant in Malaysia for EUR 800 million. The company also plans additional investment in a significant new 8-inch LED front-end capacity in Malaysia to support advanced LED technologies, and micro LED manufacturing.
• March 2021 - Smart Global Holdings Inc has announced the acquisition of Cree Inc's LED Products business unit. The acquisition is in line with the diversification strategy of the company.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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