Great Expectations for LEDs: DOE predicts lighting product penetration

The installed stock of LED products will reach 5 billion units, or 60% of all installed lighting, by 2025, according to the U.S. Department of Energy (DOE). By 2035, most projected energy savings will come from nonresidential building sectors, with the greatest value and savings provided by increased controllability and networked control capabilities.

Published in December 2019, DOE’s biannual report, “Energy Savings Forecast of Solid-State Lighting in General Illumination Applications,” models adoption of LED lamps and luminaires in the general lighting market and estimates energy savings from 2017 to 2035. Residential, commercial, industrial and outdoor stationary building sectors are evaluated. This article will focus on DOE’s near-future forecast, looking out to 2025, and specifically examining LED penetration and connected LED penetration.

LED lighting has either matched or surpassed all conventional lighting technologies in terms of energy efficiency, longevity, versatility and color quality, and with a declining cost, making it competitive in a majority of applications. This has resulted in an estimated penetration of more than 70% of new lighting systems, which is slowly but steadily transforming the installed base of lighting in the United States. Advancements in connectivity enables additional control capabilities and energy cost savings.

Across all sectors, lighting installations were forecast to grow about 1.3% per year from 7.6 billion lamp systems in 2017. LED penetration was estimated at 19% in 2017, forecast to increase to 35% in 2020 and 60% by 2025. In other words, in five years, a majority of lamp systems installed in the United States is expected to be LED. Residential will lead in total number—already representing 72% of LED installations in 2017—but the commercial and outdoor sectors will lead in LED penetration, and the commercial, industrial and outdoor sectors will generate a disproportionate share of energy savings due to high-output lamps and long operating hours.

Residential—In 2017, the residential sector represented an estimated 80% of the national installed lighting stock, with 6 billion lamp systems installed, of which 17% (1 billion) were LED. This was forecast to increase to 33% (2 billion lamp systems) in 2020 and 56% (3.8 billion) by 2025.

Commercial—In 2017, the commercial sector represented 16% of all lighting installations, with 1.2 billion lamp systems installed, of which 26% (322 million) were LED. DOE forecast adoption to increase to 44% of installed lighting (558 million lamp systems) in 2020 and 72% (964 million) by 2025. While connected lighting is forecast to enjoy extraordinarily rapid growth—a compound annual growth rate of 47%—adoption is expected to achieve a 7% adoption in the LED installed base.

Industrial—In 2017, the industrial sector had an estimated 82 million lamp systems installed, of which 12% (10 million) were LED, the lowest penetration among any building sector. Adoption is forecast to increase to 29% (25 million lamp systems) in 2020 and 63% (56 million) by 2025. As with the commercial sector, connected lighting in the industrial sector is forecast to grow to a 7% adoption in the LED installed base.

Outdoor—In 2017, the outdoor sector had an estimated 214 million lamp systems installed, of which 35% (75 million) were LED. This sector has the fastest adoption rate. DOE forecast adoption to increase to 66% (146 million) in 2020 and 93% (218 million) by 2025, of which 9% will be connected.

Lighting controls—Dimmers, daylight-responsive controls, occupancy sensors, timers, energy-management and connected lighting systems were estimated to control a minority of lighting installations in 2017. Specifically, 34% of commercial, 14% of residential, 7% of industrial and 87% of outdoor (largely due to a large incidence of photocells and time-switches) lighting was controlled. The most prevalent controls in the commercial sector were energy-management systems (16%) and occupancy sensors (6%), while the most prevalent in the residential sector was dimmers (11%). Connected lighting was estimated at less than 1% across all sectors, though DOE expected penetration of connected luminaires to grow rapidly to 3–21% in 2020 and 7–31% in 2025, with this range split between the current market trajectory and a trajectory if certain DOE program goals are met that addresses adoption hurdles.

Some manufacturers declare the LED revolution over, while others say a new phase is beginning, as LEDs become increasingly controllable, connected and pack features such as color tuning. Meanwhile, despite rapid adoption, the market continues to show ample opportunities for electrical contractors to upgrade traditional lighting.

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