Global Market for Lighting as a Service Is Expected to Grow to $2.5 Billion By 2031
Market barriers include limited value proposition, a fragmented value chain, and alternative options for upgrading lighting
A new report from Guidehouse Insights analyzes the global lighting as a service (LaaS) market for commercial buildings.
LaaS, broadly defined as the third-party management of lighting systems, could fundamentally change the way that owners and operators of commercial buildings procure new and upgraded lighting. Despite this potential, adoption of LaaS has been slow and the early, optimistic expectations for market transformation have not materialized. According to a new report from Guidehouse Insights, global LaaS revenue is expected to increase from $1.1 billion in 2022 to $2.5 billion in 2031, growing at a compound annual growth rate (CAGR) of 9.7% through 2031.
“Using LaaS, clients can benefit from upgraded lighting without upfront capital investment, avoid committing to the current state of lighting technology, and outsource maintenance of increasingly complex lighting hardware,” says Wendy Davis, senior research analyst with Guidehouse Insights. “Even so, of the many ways to procure new or upgraded lighting, relatively few building owners and operators are doing so with LaaS. While many LaaS providers are successful and clients find the model’s benefits compelling, earlier expectations that LaaS would quickly become mainstream have not come to fruition.”
While LaaS shares several characteristics with other as a service offerings, some important differences make market penetration challenging. For instance, as a hardware-intensive undertaking, upgrades are not easy or inexpensive throughout the life of a service agreement. Furthermore, LaaS is not available to customers that seek new or upgraded lighting through many common industry channels, according to the report.
The report, Market Data: Lighting as a Service, examines the LaaS market for commercial buildings. It provides an outlook for LaaS revenue, segmented by construction type (new construction and retrofits), building type (office, retail, education, healthcare, hotels & restaurants, institutional/assembly, warehouse, and transport), and global region (North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa) from 2022 through 2031. The report explores market trends, drivers, and barriers, and includes recommended strategies for increasing the adoption of LaaS. An executive summary of the report is available for free download on the Guidehouse Insights website.
*The information contained in this press release concerning the report, Market Data: Lighting as a Service, is a summary and reflects the current expectations of Guidehouse Insights based on market data and trend analysis. Market predictions and expectations are inherently uncertain and actual results may differ materially from those contained in this press release or the report. Please refer to the full report for a complete understanding of the assumptions underlying the report’s conclusions and the methodologies used to create the report. Neither Guidehouse Insights nor Guidehouse undertakes any obligation to update any of the information contained in this press release or the report.