The forecasting of the LED lighting market looks bright indeed, especially in the United States. With these white light sources providing a more energy efficient method of home and outdoor lighting, the market is expected to grow to become 36% of total lumen-hour sales by the year 2020. If new lighting technologies don’t hit the market before 2030, then the LED lighting market size is expected to reach 74% of total lumen-hours.
The energy savings that occurs from the transition to LED lighting is also impressive. By 2030, the annual amount of savings achieved due to the level of market penetration is estimated to be 300 TW hours, or enough to shut down about 50 traditional power plants. In just one year, a total monetary savings of $30 billion would be achieved in 2030.
There would also be a dramatic reduction of greenhouse gases should this scenario occur. More than 210 million metric tons of carbon would be eliminated by 2030 and lighting consumption needs would be reduced by 46% when LED lights are compared to a market that contains no LED lights whatsoever.
What About the Global LED Lighting Market?
Although the information from the United States looks strong, it is Asia that is expected to lead the world when it comes to the LED lighting market. By the end of 2016, the global market is expected to see total revenues of $3.7 billion. In contrast, the market size in 2011 was $2.2 billion. The measurement in revenues is actually tempered by the fact that the price points of LED lights are expected to drop by 14% by EOY 2016.
China is expected to see the largest growth in the transition to LED lighting. 44% of the light bulbs will be converted over to LED lights in the country by the end of 2016. Japan has already experienced massive growth in the industry for several years, with LED A19 replacement light bulbs being the top selling product in terms of total units sold.
What Will Drive Higher Sales?
Changes in product quality laws or improvements to meet product quality laws could dramatically transform the LED lighting industry. This is because LED style fluorescent light bulbs are rarely sold in the US and Europe because of product quality restrictions. Sales of these items in Asia are quite high and have been since 2010. Although improvements in production have occurred in the past 5 years, those improvements haven’t been enough to create entry into the US and European markets.
Continued improvements in the technologies behind LED lighting will also enhance their usability, although this may temporarily harm revenue forecasts. Money is still going to be made from the transition to LED lighting, but it will come through cost savings instead of through direct sales in future years. How that will reflect on investors in the future will likely depend on what future points of emphasis in energy conservation happen to be.
Starting in 2015, the one negative component of the LED lighting market is that as more people transition to this new technology, the eventual level of shipments and sales is going to either stagnate or drop. This is because the light bulbs last longer than traditional lighting options, including CFL bulbs, and this will erode demand within the market.
What Could Change All of This?
Much of the future of the LED lighting market size is dependent on a consistent level of implementation. If households and businesses are slow to transition over to LED lights, then the growth forecasts could extend outward for up to a decade. In some ways, it actually benefits the industry more if people are slower to adopt this new technology because instead of sales plateaus being the best case scenario, a graph of continual growth will be achieved.
Changes in TV technologies could also dramatically change this industry. Televisions are the second biggest marked for packaged LEDs. The demand for screen sizes has been increasing, but the need for LEDs to accommodate those larger screen sizes has been decreasing. As with LED light bulbs, the expected result will be a slow decline that could become more rapid thanks to technological developments.
From a revenue standpoint, the LED lighting market size may have peaked. From an implementation and cost savings standpoint, however, this industry is just getting started. As this market approaches 2030 and 3 out of 4 light bulbs become LED lights and billions of dollars are saved annually compared to today, the world could be a very different place because of this technology.
Although millions of people visit Brandon's blog each month, his path to success was not easy. Go here to read his incredible story, "From Disabled and $500k in Debt to a Pro Blogger with 5 Million Monthly Visitors." If you want to send Brandon a quick message, then visit his contact page here.