The Global Outdoor LED Lighting Market is estimated to be valued at USD 29.5 Bn in 2024 and is expected to reach USD 136.5 Bn by 2031, growing at a compound annual growth rate (CAGR) of 21.1% from 2024 to 2031. The increasing installation of LED street lighting systems for cost savings and energy efficiency is driving the market. Several countries are shifting from conventional lights to LEDs to meet sustainability goals which is further fueling the demand.

The market is expected to experience steady growth during the forecast period owing to various government initiatives and policies that promote the adoption of energy-efficient lighting systems. Furthermore, the development of smart cities worldwide is augmenting the incorporation of intelligent outdoor LED lighting management systems that can be controlled remotely.

Market Driver - Unique Advantages of LED Lights, Including Long Lifespan, Energy Efficiency, And Compactness Compared to Alternatives

LED lights have clearly emerged as the preferred technology for outdoor lighting due to their unparalleled benefits over traditional lighting options such as incandescent bulbs. LEDs offer significantly longer operational lifetimes compared to other lights - while incandescent bulbs may last around 750-1000 hours, LEDs can illuminate areas efficiently for over 50,000 hours which is nearly 20 years of service if used for average 4 hours daily. This translates to huge savings as users don't need to replace lights for many years.

LED lights are also extremely energy efficient - they use at least 75% less energy than traditional lighting to generate the same brightness. This is a major factor driving their adoption considering the rising electricity costs and focus on minimizing carbon footprint. LED lights also run cooler while operating and don't emanate as much heat as other lights. They pose negligible fire risk making them much safer. LED bulbs are more shock resistant and durable due to lack of exposed filaments unlike incandescent bulbs. Outdoor LED lights can withstand shocks, vibrations and harsh weather very well.

Furthermore, LED lights have a compact design and can fit into much smaller fixtures compared to bulbs of other technologies. This allows their use even where space is at a premium. They support a variety of lighting designs through different form factors and can blend well with any landscape or infrastructure. LEDs are available in varied color temperatures from warm yellow light to cool white and even multicolored for enhanced visual appeal. They provide focused, glare-free bright light exactly where needed avoiding wastage. All these technical merits have helped LED lights gain wide popularity worldwide for outdoor residential, commercial and municipal applications.

Market Driver - Increased Demand from Smart City Initiatives

Urban local bodies worldwide are giving a major push for development of smart cities with enhanced digital and physical infrastructure. Smart street lighting networks are foundational for smart cities where lights become “smart nodes” integrated with various technologies. Outdoor LED lights have emerged as the ideal solutions for smart streetlights due to their robust IP/weatherproof ratings and long operational lifetimes. As smart city projects accelerate globally leveraging latest connectivity and cloud solutions, demand is surging for outdoor LED lights configured with intelligent controls, motion sensors and other smart nodes features. To achieve energy and cost saving targets of smart city plans, municipal corporations are actively retrofitting conventional street lights to networked LED variants which can be centrally monitored and managed. IoT enabled LED lights ensure uniform illumination of roads and public places. Sensors allow dimming or turning on/off lights based on detected movement for adaptive functionality. Connected LED lights also support add-on smart city applications like air quality monitoring, property surveillance cameras or evacuation guidance displays. All these advantages have been triggering greenfield smart infrastructure development projects fuelling substantial demand. Multinational LED luminaries are proactively partnering with technology providers to deliver integrated smart lighting systems for smart community initiatives.

Market Challenge - Higher Initial Costs of LED Installations, Limiting Adoption in Small and Medium-Sized Businesses

One of the key challenges faced by the outdoor LED lighting market is the higher initial costs associated with LED installations as compared to traditional lighting sources such as high-pressure sodium (HPS) lamps. While LED lights offer significant energy savings over the lifespan of the product owing to their long operating hours and high efficiency, the upfront capital required for full conversion to LED solutions poses a barrier, especially for small and medium-sized commercial clients and municipalities working on constrained budgets. LED fixtures are generally 3-4 times more expensive than traditional lamps, translating to thousands of extra dollars that may not be available for lighting upgrades. Additionally, the payback period from energy cost savings can stretch from 3-7 years depending on usage patterns. This extended time period before positive cash flows are seen discourages many potential customers who seek quicker returns on investment. LED installation services and components also have higher pricing in several markets due to lack of scale and competition. Addressing the high initial costs, through innovative financing solutions, subsidies, and bulk purchase programs can help spur greater LED deployment among SMBs.

Market Opportunity: Technological Advancements in LEDs, Such as Perovskite Light-Emitting Diodes (PeLEDs), Enhancing Efficiency and Brightness

One of the major opportunities for the outdoor LED lighting market is the ongoing technological innovations that are improving the capabilities and driving down the costs of LED solutions. An emerging area is perovskite light-emitting diodes or PeLEDs which promise to significantly boost both the efficiency and brightness levels of LED lights. Perovskites possess properties that allow for inexpensive fabrication techniques as well as high luminous efficiencies that surpass existing LED technologies. Successful commercialization of PeLEDs could usher in a new generation of LED lights that deliver more lumens per watt while being cheaper to produce. Other current advancements include enhanced light extraction from tiny micro-LED chips and the development of red and yellow LEDs with improved performance. As the underlying LED technology matures further with continuous R&D, the cost factors holding back demand particularly in price-sensitive exterior lighting will diminish considerably over the coming years. This will open up substantial untapped market potential for LED lighting.

• Product Innovation and Energy Efficiency: Leading companies focus on developing advanced LED products that offer higher energy efficiency, better durability, and improved lighting quality. Innovations like smart LEDs, solar-powered lighting, and adaptive lighting technologies help companies cater to municipalities and businesses looking to reduce energy costs and carbon emissions.
• Expansion through Strategic Partnerships and Acquisitions: Many top players in the market, like Signify (formerly Philips Lighting) and Acuity Brands, actively pursue partnerships and acquisitions to expand their product portfolio and enhance their market reach. For instance, partnering with technology firms allows lighting companies to incorporate IoT and smart-city capabilities into their outdoor lighting solutions.
• Emphasis on Smart and Connected Lighting Solutions: With the rise of smart city initiatives, key players are investing in smart and connected lighting solutions that can be remotely controlled and monitored. These systems use sensors and IoT technologies to provide features such as adaptive brightness, fault detection, and data collection. This strategy not only enhances energy efficiency but also aligns with growing government and municipal demand for smart infrastructure.
• Customization and Project-Based Solutions: Major LED lighting companies are increasingly offering tailored lighting solutions for large-scale projects, such as street lighting for cities, outdoor lighting for commercial spaces, and specialized lighting for parks or stadiums. By customizing solutions based on specific project needs, companies can secure long-term contracts with clients and maintain a competitive edge in a diverse market.

Insights, By Installation, Trend Towards Efficient Lighting Infrastructure Drives Adoption of New Installations

The segment New Installation is projected to contribute 62.3% in 2024 owing to the growing need for more energy efficient lighting infrastructure across residential and commercial establishments. Stakeholders such as builders, managers of malls, indoor stadiums etc. are increasingly opting for LED lights during new construction projects given the long-term benefits of reduced energy and maintenance costs. These lights offer high brightness using lesser power compared to traditional lamps. There is also a push towards sustainability which boosts demand for new installations equipped with motion sensors and daylight harvesting features. Furthermore, newer residential townships and ongoing infrastructure development across developing nations spur the need for efficient outdoor LED lighting as an integral part of their planned civil works.

Insights, By Offering, Hardware Sales Dominate Driven by Need for Reliable Lighting Solutions

By Offering, Hardware is projected to contribute 72.1% in 2024 owing to the critical role it plays in enabling quality outdoor lighting. End users prefer well-established lighting equipment manufacturers who can deliver reliable, durable lights suitable for outdoor use even in adverse weather conditions. There is steady procurement of LED lamps, luminaries, drivers and other hardware by contractors to meet the lighting needs of various outdoor spaces. While services and software also contribute to the market, hardware forms the core component driving consistent sales. Ongoing product innovations further aid the hardware segment's leadership in this sphere.

Insights, By Sales Channel, Retail Channels Expand Access to Diverse Lighting Options

By Sales Channel, Retail/Wholesale contributes the highest share of the market aided by the widespread availability of outdoor LED lighting products through this mode. Retail networks stock diverse offerings from numerous brands tailored for different installation needs. This allows customers to inspect lighting attributes in person and select options based on technical specifications as well as design aspects. Easing purchasers’ access to lighting innovations and existing best-sellers has made retail an important sales generator. Various multi-brand distributors and cooperative retail networks are also strengthening last-mile connect to boost wholesale contribution to this segment.

The Outdoor LED Lighting Market is rapidly expanding as global demand rises for energy-efficient, durable, and environmentally friendly lighting solutions. The market is driven by smart city initiatives, urbanization, and the shift from traditional lighting to LED. LED technology provides numerous advantages, such as a longer lifespan, lower energy consumption, and minimal maintenance. Additionally, innovations like perovskite light-emitting diodes (PeLEDs) are enhancing brightness, color quality, and efficiency, attracting new investments and bolstering R&D. This market growth is anticipated to be especially prominent in Asia Pacific, where urban infrastructure projects are driving LED adoption. European governments and private companies are also investing in eco-friendly lighting solutions, furthering growth.

The major players operating in the Outdoor LED Lighting Market include Dialight PLC, General Electric Co. Ltd., Osram Licht AG, Signify N.V., Acuity Brands Lighting Inc., Syska Led Lights Pvt. Ltd., Zumtobel Group AG, Panasonic Corporation, Hubbell Inc., Eaton Corporation, Philips Lighting Holding B.V., Wipro Lighting Ltd., Opple Lighting Co. Ltd., Bajaj Electricals Limited and LG Innotek Co. Ltd.

• In May 2024, The LED Expo in Mumbai, India, featured innovations like Niiv Lites, showcasing new indoor and outdoor lighting technologies.
• In April 2024, Hama GmbH & Co KG launched a dust and water-resistant LED light strip for both indoor and outdoor use, compatible with their Smart Home app.
• In March 2023, Research collaboration between Soochow University and East China Normal University led to a new blue perovskite LED, achieving better color purity and efficiency.

• By Installation
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• By Sales Channel
  • Retail/Wholesale
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  • 50-150W
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