Why the Lighting as a Service Market Has Started Booming in 2022

The lighting as a service market has boomed over the last decade, thanks largely to the reduction of costs of lighting solutions, lower energy bills and higher savings, and a reduction in the cost of maintenance.

A report from Global Market Insights indicates that environmentally friendly lighting, like smart lighting, has been one of the largest draws for lighting as a service (LaaS) over the last 10 years. Internet of Things (IoT)—how common objects connect with each other over the Internet—has also been a huge driver for LaaS demand.

In this article, you’ll learn who are the biggest LaaS end users, why the lighting as a service industry is exploding in 2022, forecasts for the future, and how to tell if LaaS is the best choice for you.

LaaS End Users and Market Segmentation

Leaders managing large businesses need to make effective financial decisions, and that includes lighting. A report from Expert Market Research indicates the most common LaaS end users are

  • Outdoor
  • Commercial
  • Industrial

Energy-saving LED lighting offered on a subscription basis, rather than a costly upfront capital investment, continues to draw interest for different business models. Freeing up cash flow through efficient energy consumption is a must for a competitive landscape in business.


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What’s Driving the Lighting as a Service Market 

The largest interest currently driving investment in LaaS is decreasing energy consumption. LaaS empowers business decision-makers to participate in this trend by requiring zero capital investment, providing cost savings, and enabling access to government policies that favor energy-efficient lighting installations. 

The LaaS market is also largely being driven by cities implementing smart infrastructure and increased use of IoT in smart homes. LEDs made up half of global lighting sales in 2019, a steady increase in buying trends dating back to 2013. The purchase of LED luminaries—largely in the North American and European markets—is a sizable part of this market segment.

Lighting as a Service Market


In terms of energy usage, lighting accounts for 18% to 40% of electricity consumption for commercial businesses. For scale, if energy-efficient lighting were adopted across the globe, there would be a 30% to 40% reduction in demand for electricity by 2030. LED lights support this by providing clearer, brighter light, and have no hazardous materials.

LaaS financial benefits also support a healthier business budget. With less in the way of energy consumption, companies are free to save or reallocate spending.

Lighting as a Service Market Forecast

With the market slated to grow at a CAGR (compound annual growth rate) of 50% between this year and 2027, the largest lighting as a service market key player is likely going to be the commercial sector. 

Including office spaces, stores, institutions, and hospitals, commercial business lighting has a longer lifespan, higher cost of maintenance, and higher initial cost.

For commercial businesses most interested in LED retrofits, exterior building lighting updated to more energy-efficient options reduced energy cost by 63%. The pandemic has impacted business operations, however, and the construction of new commercial buildings has slowed. 

Another critical element of the LaaS market is the industrial sector, which is attributed to accidents caused by less-than-ideal lighting and lacking appropriate safeguards in similar environments. There is also likely to be an increase in the use of LED lighting on industrial sites, which benefit from better lighting and energy savings.



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As the pandemic continues, there will also likely be a continuation of the trend in bacteria-fighting lighting for smart buildings. One such solution, launched in the last couple years, is the Smart UVC Solution ultraviolet light. The UVC Solution light kills bacteria and viruses, and disinfects surfaces. 

Over the next few years’ forecast period, New York City is expected to switch their 250,000 streetlights to LEDs. Barcelona, Spain, has already a similar but much smaller scale deployment, supporting 3,200 street lights with diodes.

On a larger scale, North America is set to dominate the LaaS market, with both the U.S. and Canada looking at reducing energy usage. For example, Canadian cities have been advancing the use of smart LED lights in order to improve energy efficiency.

Lighting as a Service Market Forecast


What Lighting as a Service Can Do for You

With no initial investment required, lighting as a service provides a flexible, IoT-compatible opportunity for businesses to improve their lighting and increase their productivity. Savings from reduced energy consumption also frees up cash flow to save, reinvest in the business, or allocating as spending elsewhere. 

Hiring an LaaS company to provide lighting for you means you don’t need to worry about maintenance. Depending on the terms of your contract, you can also work toward lighting system ownership.. 

Investing in better lighting for your business brightens your future. Contact us to learn more about what lighting as a service can do for you.

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