Is connected lighting the way to go?
With an ever-increasing emphasis on buildings, systems and cities becoming ‘smart’, the market for technologies such as connected lighting is a huge one.
Worldwide sales of smart lighting and connected control systems are expected to swell to $21 billion in 2023, up from $10 billion in 2018, according to research by Omdia.
Meanwhile, forecasting from Guidehouse Insights suggests that global annual revenue for connected lighting systems will experience a compound annual growth rate of 17.6%, reaching $6 billion in 2028.
However, at the consumer level, there is a general lack of awareness about the value that smart and connected lighting systems can provide. This is true both for the individual consumer and for the commercial sector at large. Limited clarity around the return on investment (ROI) beyond a simple upgrade to LEDs has proved to be one of the biggest barriers for commercial adoption of connected lighting, while individual consumers are often priced out when it comes to installing this type of technology in their homes.
Despite this, there are some real benefits associated with connected and smart lighting solutions. For instance, they have the ability to leverage advanced sensors, meaning they can intelligently control lighting and support the automation of an entire building. These solutions are able to coordinate heating, ventilation and air conditioning (HVAC) operability, as well as security, access and maintenance systems. This comes with obvious financial perks, with huge energy savings generated by occupancy sensors, dimming controls and demand management. However, it can take time to reap the rewards after paying large upfront costs to install the technology in the first place.
As the benefits of this technology are gradually becoming more apparent, the uptake of connected and smart lighting is accelerating.
What are the key drivers?
According to the report ‘Connected Lighting Overview’, key investment drivers include vast energy savings, greater awareness of the Internet of Things and voluntary building standards. The proliferation of LEDs has also led to an increased adoption of connected lighting systems, because having LEDs in place makes it easier to swap to this type of lighting.
Omdia research suggests that lighting manufacturers have tried to refocus their marketing activities on benefits that reach beyond energy savings — with many instead opting to position their products as part of the ‘IoT revolution’. These companies have also introduced a number of smart-lighting solutions for residential end users, although the cost of set-up and installation service is usually very high and not many families can afford the luxury of a professional smart lighting system. This, in turn, has prompted manufacturers to introduce simple, highly affordable DIY solutions that do not require professional installation.
“Smart lighting technology is becoming more accessible to consumers thanks to the growing availability of simple DIY smart-lighting systems,” said Pal Karlsen, research analyst, building technology, at Omdia.
“However, there are a few barriers preventing mass adoption. The main obstacle is arguably the lack of awareness and appreciation of the benefits smart lighting can provide to the consumer. This is a critical factor preventing the business from reaching its full growth potential.”
Better education is key to continued market growth
Put simply — messaging around the benefits provided by connected and smart lighting systems needs to be improved, and made more consistent. For instance, smart lighting systems can enable ‘human centric lighting’, which allows customised lighting conditions in the home to help improve residents’ sleep, productivity and comfort.
“Health benefits can be a very strong argument in favour of making an investment in a smart lighting system, but manufacturers have not been able to effectively share this message with consumers,” Karlsen said.
“Manufacturers will need to dedicate more effort to educating customers about the real-life benefits of smart lighting systems. This educational outreach can include real case studies and results from scientific studies or consumer tests where the benefits of smart lighting have been demonstrated.”
More clarity is also required in messaging about the ROI benefits for connected lighting systems in commercial buildings. While most industries understand that upgrading to LED lighting will produce energy savings, the value in creating a connectivity grid within an entire building is less widely appreciated. According to Szymon Slupik, CTO and founder of Silvair, “The value of additional services enabled by smart lighting is seven to 10 times more valuable than the lighting controls and energy savings themselves.”
So it seems that the value of connected lighting systems has the potential to go far beyond the simple reduction in energy usage that LEDs provide — but only if consumers are made fully aware of the key benefits.
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