Smart Lighting Market Size, Share and Trends 2024 to 2034

Smart Lighting Market Size and Forecast 2024 to 2034

The global smart lighting market size is calculated at USD 22.45 billion in 2024 and is predicted to reach around USD 165.89 billion by 2034, expanding at a CAGR of 22.14% from 2024 to 2034. The smart lighting market is driven by the growing need for solutions that use less energy.

Smart Lighting Market Key Takeaways 

• Europe dominated the global market with the largest market share of 38% in 2023.
• Asia Pacific is observed to be the fastest growing market during the forecast period.
• North America shows significant growth in the smart lighting market during the forecast period.
• By component, the hardware segment contributed the highest market share of 57% in 2023.
• By component, the software segment is anticipated to grow at the fastest CAGR during the forecast period.
• By connectivity, the wired segment captured the biggest market share of 65% in 2023.
• By connectivity, the wireless segment is expected to show a significant growth during the forecast period.
• By application, the indoor segment generated the major market share of 66% in 2023.
• By application, the outdoor segment is expected to grow at the fastest CAGR during the forecast period.

How is AI enhancing the smart lighting industry?

Artificial intelligence systems examine lighting usage trends to maximize energy efficiency. AI can automatically adjust brightness and turn off lights in unused areas by learning when and where lights are needed, which reduces waste and electricity costs. AI-powered technologies enable smart lights to anticipate possible malfunctions or issues before they arise.

By alerting operators when repairs or bulb replacements are necessary, this proactive strategy lowers maintenance expenses and downtime. Lighting data gathering and analysis are made possible by AI. This enables companies and local governments to monitor energy consumption, manage lighting for public areas, and make data-driven decisions to upgrade infrastructure.

Europe Smart Lighting Market Size and Growth 2024 to 2034

The Europe smart lighting market size is exhibited at USD 8.53 billion in 2024 and is projected to be worth around USD 63.04 billion by 2034, growing at a CAGR of 22.15% from 2024 to 2034.

Europe dominated the smart lighting market in 2023.  The integration of Internet of Things (IoT) ecosystems with smart lighting has been spearheaded by European companies. This includes capabilities like enhanced automation, app-based management, and voice control compatibility (via Google Assistant, Amazon Alexa, and others). To build sustainable and self-sufficient urban environments, European towns are progressively integrating renewable energy sources, such as solar power, with smart lighting. Because smart lighting optimizes lighting conditions and lowers energy consumption, it is widely utilized in industries and warehouses throughout Europe.

Asia-Pacific is observed to be the fastest growing in smart lighting market during the forecast period. Innovation in technology, especially in electronics and the Internet of Things, is concentrated in Asia-Pacific. Businesses in South Korea, Japan, and China are leading the way in creating sophisticated and reasonably priced smart lighting solutions. Due to the presence of regional manufacturers, these solutions are now considerably less expensive, increasing their accessibility for final consumers. Smart lighting systems with sensors and analytics are being adopted by industries to maximize energy efficiency and cut expenses. Additionally, smart lighting systems are being used more and more in public infrastructure, such as highways, train stations, and airports, to increase operational efficiency and safety.

• In October 2023, Halonix Technologies announced the launch of India's basic 'UP-DOWN GLOW' LED Bulb, illustrating its commitment to enriching lives through pioneering technology.

North America shows significant growth in the smart lighting market during the forecast period. North American consumers are becoming more conscious of how smart LED lighting systems may save energy. Features like automated turn-off and dimming when rooms are empty help these systems use less electricity. To cut expenses and meet sustainability targets, companies are implementing smart lighting in warehouses, retail establishments, and office buildings.  Motion, daylight, and occupancy sensors are increasingly being added to lighting systems to increase their usefulness and efficiency.

• The U.S. Department of Energy sets energy efficiency standards for lighting products, which include LED lighting and smart lighting systems.

Market Overview  

Energy usage is greatly decreased by smart lighting systems that are outfitted with cutting-edge technologies like LED lights and Internet of Things-enabled sensors. Smart lighting lowers power costs for both businesses and individuals by optimizing energy use and providing features like scheduled operations and automated dimming. Smart lighting solutions are becoming more popular as a result of governments all over the world encouraging energy-efficient technologies through incentives and regulations.

Smart Lighting Market Growth Factors

• Smart lighting solutions, which maximize energy utilization through automated controls, dimming features, and sensor-based systems, are in high demand due to increased concerns about energy use and environmental sustainability. These systems are appealing to both the home and business sectors since they minimize electricity costs and help reduce carbon footprints.
• The need for networked products, such as smart lighting, is growing as more people choose smart home ecosystems. A crucial component of home automation, smart lighting provides convenience, security, and personalization. The ease of remote lighting control and integration with other smart home devices is especially appealing to younger, tech-savvy generations.

Market Scope

Market Dynamics

Driver

Increasing energy consumption awareness

Businesses and consumers are more driven than ever to find ways to lower their energy costs due to the rising cost of electricity. Because smart lighting systems are made to maximize energy use, they offer a practical answer. When lights are not needed, features like timers, motion sensors, and automated dimming allow users to consume less energy. These systems result in considerable cost savings over time. The market for smart lighting goods keeps expanding as more people realize how much money they could save by utilizing it.

Restraint

Lack of consumer awareness

Many businesses in the smart lighting sector are unable to reach a large consumer base with clear and informative marketing, despite the growing interest in smart homes and linked products. Marketing campaigns frequently highlight technological characteristics above useful, everyday advantages. Companies must fund customer education initiatives, show how these systems operate, and highlight the observable advantages, like energy savings, increased convenience, and personalization, to counteract the lack of awareness.

Opportunity

Advancements in LED technology

LED technology advancements have made it possible to create tunable white light, which lets users change the color temperature of lights to suit their needs or tastes. Comfort, productivity, and mood can all be enhanced by this. Nowadays, smart LEDs can automatically change their illumination according to the time of day, a feature that is especially well-liked in offices and commercial settings where lighting can affect productivity and well-being. Although LEDs are renowned for having a long lifespan, new developments have increased their robustness and, over time, their cost-effectiveness. 

• They are perfect for both indoor and outdoor applications since they are more resilient to environmental elements like heat, humidity, and vibration. This is particularly advantageous for long-lasting and low-maintenance smart lighting systems.

Component Insights

The hardware segment dominated the smart lighting market in 2023. Unlike conventional lighting options, LEDs are much more energy-efficient, using less electricity and saving money on energy bills. By detecting presence, these sensors help automate lighting systems and ensure energy efficiency by turning lights on and off. To enable wireless communication and connectivity between lighting systems and control devices like smartphones, tablets, or centralized hubs, hardware elements like controllers and gateways are necessary. The need for cutting-edge lighting hardware to install connected lighting systems in streets, public areas, and commercial spaces has been fueled by smart city initiatives around the world.

The software segment is observed to be the fastest growing in the smart lighting market during the forecast period. Lighting systems are now sophisticated ecosystems thanks to IoT connectivity. IoT-enabled smart lighting systems rely on software as their foundation, which enables devices to interact, gather information, and carry out tasks. By employing data-driven insights, the software optimizes energy use by monitoring usage trends and dynamically modifying lighting in response to occupancy or real-time needs.

Connectivity Insights

The wired segment dominated the smart lighting market in 2023. Power over Ethernet (PoE) and Ethernet-based wired systems provide consistent and reliable connectivity, removing worries about interference or dropped wireless signals. For situations where consistent lighting performance is required in commercial, industrial, or public infrastructure, this dependability is essential. Wired infrastructure is already present in a large number of existing commercial and industrial buildings. It is economical and compatible to upgrade these to smart lighting systems via wired technology.

The wireless segment shows significant growth in the smart lighting market during the forecast period. Smart home platforms such as Apple HomeKit, Google Assistant, and Amazon Alexa are compatible with wireless smart lighting solutions. Demand is increased by this interoperability, which enables consumers to manage their lighting using voice commands or smartphone applications. Energy-saving features like motion detection, remote scheduling, and adaptive dimming are frequently included in wireless smart lighting.

• Because of its energy-efficient features, smart wireless lighting solutions are becoming more and more popular as individuals and companies seek to lower their energy consumption and environmental effects.

Application Insights

The indoor segment dominated the smart lighting market in 2023. Features like scheduling, dimming, and color customization are available with smart indoor lighting. With the help of these features, homeowners may design unique lighting arrangements for various times of the day or for purposes like reading, eating, or unwinding. Smart lighting systems have been implemented by businesses to increase worker happiness and productivity. For instance, in workplace settings, adjustable white light can simulate natural daylight, increasing concentration and decreasing weariness.

The outdoor segment is observed to be the fastest growing in the smart lighting market during the forecast period. In these projects, smart lighting is essential because it makes it possible for intelligent streetlights to adjust to changing environmental conditions, use less energy, and operate more efficiently. The functionality of outdoor smart lighting has been improved through the integration of wireless communication technologies, sensors, and the Internet of Things (IoT).

By enabling remote control, predictive maintenance, and real-time monitoring, these technologies lower operating costs while enhancing performance. Businesses and municipalities are especially interested in adaptive lighting systems that change brightness according to traffic patterns or meteorological conditions.

Smart Lighting Market Companies

• Acuity Brands Lighting, Inc.
• Signify Holding
• Honeywell International Inc.
• Itron Inc.
• IDEAL INDUSTRIES, INC.
• Sengled Optoelectronics Co., Ltd.
• Verizon
• Schneider Electric
• Häfele America Co.
• Wipro Lighting
• YEELIGHT

Latest Announcements by Industry Leaders

• In October 2024, Acuity Brands, Inc. declared it had entered into a definitive agreement to buy QSC, LLC, for $1.215 billion. The acquisition is predicted to close in the second quarter of fiscal 2025 and is expected to be accretive to Acuity's fiscal 2025 full year adjusted diluted earnings.

Recent Developments

• In June 2023, URC initiated its latest all-in-one, combined lighting solution – branded URC Lighting LT-3300.
• In June 2023, Govee presented its primary Matter-enabled smart lights at CES 2023. The smart lighting producer is teaming up with Google to showcase the major Matter-certified light strip at CES 2023

Segments Covered in the Report 

By Component

• Hardware
  • Lamp
  • Luminaire
• Software
• Services

By Connectivity 

• Wired
• Wireless

By Application 

• Indoor
  • Residential
  • Commercial
• Outdoor
  • Highways and Roadways
  • Architectural
  • Others

By Geography

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East and Africa