May 17, 2017: Here are some of the most important trends that impacted the market in 2016, and would continue to do so till 2020, say industry experts.
Navin Rajendra, a lead analyst from Technavio, specializing in research on lighting sector, says, “In 2015, LED lighting ballasts accounted for approximately 11% of the global lighting ballast shipment compared to traditional lighting ballast, which accounted for around 89%. During 2016-20, LED lighting ballasts are expected to contribute to approximately 41% to the global lighting ballast market and completely overtake the traditional lighting ballast market by 2023. As LEDs have the ability to be easily controlled and programmed, they are the first choice for smart lighting applications. This will increase the demand for programmable LED drivers during the forecast period.”
The top five trends that have driven the global LED lighting ballast market in 2016, and is expected to impact the market till 2020 are:
- Increase in urban population worldwide
- Declining manufacturing cost of LEDs
- Demand for intelligent lighting systems
- Emergence of smart cities
- New government policies and guidelines on smart lighting
Increase in urban population worldwide
Rapid urbanization, especially in emerging economies is leading to the increased demand for lighting devices in a growing number of households. The residential segment is one of the major contributors to the growing demand for lighting devices. The demand for general lighting (lamp and luminaire) in the residential segment is expected to grow at a CAGR of more than 12%, during the forecast period.
Rapid urbanization will result in growing number of households worldwide, resulting in installation of new lamps and luminaires. This will accelerate the unit shipment of LED lighting ballasts.
Declining manufacturing cost of LEDs
The manufacturing costs of LEDs have been declining since 2012 and will continue to decline during the forecast period. The decline is mainly due to the declining average sale price (ASP) of the chips and components used in the manufacturing process of the LED devices.
The reduction in manufacturing cost of LEDs is leading to a reduction in the initial installation cost of LED lamps and fixtures. This is accelerating the installation of new LED lamps and fixtures across all the application segments.
Demand for intelligent lighting systems
The digital revolution is sweeping the lighting industry with the introduction of new-generation intelligent lighting systems and controls. Electron ballast with embedded intelligence is foraying in the market, which offers lighting systems the ability to adapt to changing space needs, such as in office buildings.
The ballasts are networked via a low-voltage bus, which enables them to perform various functions such as automatic shut-off, daylight harvesting, demand response, and personal dimming control. “As LEDs are integrated with sensors and controls, the demand for LED ballast is increasing at a rapid pace especially in outdoor and industrial application,” says Navin.
Emergence of smart cities
Increased government initiatives on energy conservation and resource management are contributing to the development of smart cities. Smart lighting is an important aspect for constructing smart cities, as it helps conserve energy and reduce cost. In 2014, the city of Eindhoven in the Netherlands incorporated smart street lighting systems that enable the streetlights to automatically switch off in the absence of people. Copenhagen, in Denmark, is expected to install 10,000 LED street lights that will automatically adjust brightness according to the traffic flow. In Paris, the LED traffic light systems will digitally organize the traffic and automatically detect whenever a street light needs replacing.
In December 2014, Madrid announced the substitution of 225,000 street lights with new energy efficient internet-connected LEDs provided by Philips Lighting. The central system controlling the light will regulate the lights across the city.
New government policies and guidelines on smart lighting
Energy efficiency has become a major global concern, particularly due to global warming and rapid depletion of non-renewable power resources. This high consumption has led several countries to frame policies that ban the use of incandescent light bulbs, which have relatively low power efficiency, in a phased manner. For instance, the Australian Federal Government has banned sales of incandescent light bulbs since 2010.
Furthermore, it has announced a list of minimum energy performance standards for lighting products. In Africa, a law was passed in 2011 to ensure that new buildings should meet energy-efficient specifications. Governments across the world are drafting policies to improve energy efficiency which augurs well for the growth of the LED lighting ballast market during the forecast period.