Lighting as a Service Expected to Grow

Published On
Jan 23, 2018

According to a new report from Navigant Research, global revenue for lighting as a service (LaaS) in commercial buildings is expected to grow from $663 million in 2017 to $2.6 billion by 2026, a compound annual growth rate of 16.6 percent.

LaaS is the third-party management of a lighting system, including the installation, maintenance, technical, operational and financial aspects. LaaS providers generally offer a range of services, from basic upgrades to services that include advanced sensors, controls and lighting network communications.

As more lighting products (especially LEDs) and advanced controls come onto the market, and as the internet of things (IoT) continues to expand, the popularity of LaaS is expected to grow, as more and more customers seek the convenience of a third party in managing all aspects of their lighting systems.

For example, with the proliferation of these technologies, many customers simply don't have the technical knowledge to get started with revamping their lighting systems. In addition, they often don't have the capital that is required for a comprehensive restructuring of their lighting systems. LaaS providers generally offer guaranteed cost savings, which are split between the provider and the customer.

According to a new report from Zion Market Research ("Lighting as a Service: Global Industry Analysis, Size, Share, Growth, Trends and Forecasts 2016–2024"), the growing demand for energy-efficient lighting is expected to augment the growth of LaaS. In addition, there are government guidelines and regulations for the implementation of energy-efficient lighting systems.

In addition, according to a new LaaS report from Taylor Made Reports, "The lighting as a service model is fast gaining traction across businesses who want to unleash the value proposition of LED technology. Several end-use organizations, particularly government facilities, restaurants, and hospitals, seek to garner substantial cost and energy savings brought about by using LED lights. The LaaS model helps them get over expensive retrofits and avoid large upfront capital investment, since they usually pay monthly subscription fees to the provider throughout the contract."

"We are seeing a shift in the LaaS market from a traditional financing model to an increased number of turnkey services, which provide the customer with a full-scale offering from audit and design to installation to management and maintenance of the system," said Krystal Maxwell, research analyst with Navigant Research.

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