The global economy is expected to exhaust more energy resources in the future owing to the rising demand for energy from the developing countries. Additionally, the risk of climate change associated with the use of fossil fuels has made the supply of energy highly difficult.
The process of evolution of smart technology has considerably changed the overall lighting industry in terms of energy and money saving, ensuring increased safety and convenience of the users. With the installation of the smart lighting system in a building, 50% energy costs can be reduced, enhancing the productivity and comfort of the user.
The global Lighting as a Service (LaaS) market is expected to witness tremendous growth during the forecast period 2018-2025. The market is growing due to the increasing demand for energy-efficient lighting systems.
Growing implementation of Internet of Things (IoT) with lighting services is expected to increase the adoption of this service worldwide.
The lighting sector has been undergoing significant changes since 2010. Light Emitting Diode (LED) lights are gaining traction over other types of lights because they provide high performance and are cheaper as compared to the traditional lights.
Unlike other traditional lights, LEDs can be integrated into the design of a light fixture. Additionally, government organizations and commercial buildings are retrofitting the buildings with LED lights owing to its energy saving and cost-effective features.
To reduce the installation and maintenance costs and facilitate the growth of the LED lights market, the manufacturers and service providers have developed a new financial structure known as "Lighting as a Service" (LaaS). This new financial structure helps public and private sector companies in capitalizing constant innovations taking place in the LED industry without any upfront costs.
In this model, customers pay a monthly fee for the lighting service to upgrade the lights.
The global lighting as a service market is expected to grow at a CAGR of 40.8% in the forecast period 2018-2025. In terms of application, the commercial segment is anticipated to dominate the market throughout the forecast period register the highest growth during the forecast period. This growth can be attributed to the widespread adoption of LaaS business model by various commercial organizations as it offers enhanced energy savings and cost reductions.
Due to widespread adoption of the lighting as a service in various countries of Europe, such as Germany and the U.K., the Europe market for LaaS is expected to see the fastest growth rate in the forecast period 2018-2025. The growth of LaaS model in Europe is attributed to the increase in demand for energy efficient lighting system.