In 2013, the UK LED lighting market was estimated to be worth £330 million at manufacturers’ selling prices (MSP). This incorporates all finished, mains-operated LED lighting products, domestic and non-domestic used within construction and building.
The LED lighting market is currently experiencing an
explosion in growth as the new technology becomes more widely accepted in the
mainstream lighting market, further encouraged by energy cost savings and CO2
concerns, driven by legislative changes.
The market is largely reliant on total system upgrades
and new installation applications. Non-domestic end users dominated in 2013,
accounting for 95% of the market in terms of value. Infrastructure is the
leading sector within LED lighting with many councils replacing or planning to
replace conventional street lighting with LED lighting, attracted by significant
energy cost savings, lower CO2 output and long life cycles.
The Leisure & Entertainment and Health &
Education sectors have been high early adopters of LED lighting and will
continue to be major end use sectors in the near to medium term. Retail use is
growing strongly whilst office, industrial and domestic use will expand over a
longer time period.
In 2013, the LED lighting market was characterised
mainly by sales of LED luminaires, accounting for an estimated 75% of the
market, with the rest of the market made up by replacement LED lamps and LED controls
and accessories. The use of this technology for lighting often requires
installation of specific luminaires in order to achieve the full benefits. However,
product development within LEDs is largely focused on development of replacement
and retrofit products, greater efficiency and improved colour rendering index
Distribution is led by direct sales as many
manufacturers introduce, and have a better understanding of, the new technology,
but this will change longer term. This channel is further supported by the
dominance of larger public sector projects, which tend to source directly from
manufacturers. Electrical wholesalers and specialist distributors are also significant
players and their share is likely to grow as the technology becomes more widely
established and used by the electrical contractors more widely. Retailers,
including DIY, supermarket, and high street stores are the principal suppliers
to the domestic market.
The supply of LED products is led by five main
suppliers who are estimated to account for around 80% of the market. The remainder of the market is fragmented comprising many second and
third tier specialist and smaller firms.
The average price of LED lighting products has fallen
in the last 12 months driven by the growing volumes of sales, manufacturing
techniques and increasing competition in the UK market. However, LED products
remain significantly more costly than many alternatives restricting volume
sales, particularly in the domestic sector.
The LED lighting market is expected to continue to
experience significant growth as the new technology further penetrates the
lighting market. This is likely to be supported in the short-medium term by
government cutbacks hitting public sector budgets and prompting investment in
technologies which provide reductions in long term running costs.
The government is also committed to promoting energy
efficient products, through their use within public sector projects and through
the introduction and strengthening of energy conservation and monitoring
legislation. However, the lack of product standards in the market has led to
some consumer reluctance to purchase LED lamps due to poor experiences with
lower quality products in the past. This may continue to restrict growth in the
“In the medium
term, as the commercial and increasingly the domestic sectors utilise the new
technology, and with higher volumes of housing required and increasingly
sophisticated, task orientated lighting used across all markets, LED lighting
will see high volume growth supported by a wider range of sectors” said Keith Taylor,
Director of AMA Research. ”We expect the
market to grow rapidly until 2018, when the it is estimated to be worth in
excess of £1bn.”
Lighting Market Report - 2014-2018 Analysis’ report is published by AMA
Research, a leading provider of market research and consultancy services within
the construction and home improvement markets. The report is available now and
can be ordered online at www.amaresearch.co.uk or by calling