Navigant Research Blog

IoT Provides a Changing Landscape for Lighting

— September 5, 2017

The commercial lighting landscape is shifting these days, giving way to a less siloed market. While historically, lamp and luminaire manufacturers have focused primarily on lamps, the emergence and growth of LEDs with their increased lifespan has led to a stronger market for luminaires, which in turn has negatively affected the lamp market. This has decreased lamp revenue for many incumbent lighting manufacturers.

In order to differentiate themselves within the shifting lighting market, traditional lamp and luminaire manufacturers are looking toward controls and new business use cases. Some use cases provided by lighting controls fall within the Internet of Things (IoT) landscape. Many lighting companies are entering the controls and IoT markets through mergers and acquisitions, rather than focusing solely on internal expansion into those areas.

OSRAM Makes Play toward Increasing IoT Offerings

The German-based lighting manufacturer OSRAM, a spinoff of Siemens in early 2013, has agreed to purchase Digital Lumens. Founded in 2008, the Boston-based industrial and commercial IoT solutions company offers software, products, and systems integration. Digital Lumens’ SiteWorx platform integrates intelligent lighting control, energy use, security systems, and air quality monitoring. The IoT platform will allow OSRAM to strengthen its portfolio for IoT applications. There are currently plans to integrate some of OSRAM’s existing digital services into the platform, such as location-based services utilizing Bluetooth primarily in a retail environment.

Competitive Landscape

While OSRAM has clearly positioned itself to advance its IoT offerings, it faces competition from other lighting incumbents interested in expanding their IoT offerings. Earlier this year, Acuity Brands announced its Atrius Brand, the company’s IoT business solutions portfolio. Atrius provides connectivity through a network of intelligent LED lighting and controls and its software platform that enables indoor positioning, asset tracking, space utilization, spatial analytics, and energy management.

Philips Lighting is also an incumbent that has expanded into this space with its indoor positioning for retail applications and connected lighting for offices utilizing Power over Ethernet (PoE) and SpaceWise wireless technology. Another is Eaton, which has partnered with IoT platform, sensor, and solutions company Enlighted to integrate the company’s hardware, software, and services into Eaton’s LED lighting and controls portfolio.

The technology developments, acquisitions, and partnerships all demonstrate the shifting market and provide a glimpse into the future of commercial lighting. Startups, systems integrators, IT companies, and network providers are mixing with the traditional lighting manufacturers in this market, providing more collaboration and merger and acquisition opportunities. Navigant Research’s upcoming IoT for Lighting report will look at the key players in this industry and provide an overview of the market, including drivers and barriers, technology issues, and a global forecast of hardware, software, and services.

 

LEDs Experience Growth but Commercial Lighting Market Revenue Declines

— April 7, 2017

According to the US Energy Information Administration (EIA), lighting in the commercial sector (which includes commercial and institutional buildings) and public street and highway lighting consumed 11% of total commercial sector electricity in 2016. LEDs provide more efficient lighting alternatives to traditional lighting options–such as incandescent, fluorescent, halogen, and even compact fluorescent lamps in the commercial market. The increased efficiency, decreasing prices, and longer lifespan of LEDs have spurred their growth in the lighting market. Lighting is considered low hanging fruit for efficiency upgrades in commercial buildings, as these technologies are cheaper than other building upgrades focused on efficiency.

Decline of the Commercial Lighting Market

According to Navigant Research’s recent report, Market Data: Energy Efficient Lighting for Commercial Markets, global lamp revenue is expected to decline at a 0.8% compound annual growth rate (CAGR) between 2017 and 2026. The decline is modest due largely to the expected number of replacement lamps needed for burnouts during the forecast period. While total global market revenue is expected to decline, LED revenue is the only lighting technology revenue expected to experience growth during this time. The total global number of lamp shipments is expected to decline at a quicker pace than revenue due in large to part higher priced LEDs.

Lamp Revenue by Lamp Type, World Markets: 2017-2026

(Source: Navigant Research)

The Implications 

When we think of a thriving market, we think of an ever expanding market where there is room for all interested parties to get a piece of the pie. However, due to LEDs’ increased efficacy, long lifespan, and continued market penetration, the overall lighting market is declining. This means there is an oversaturation of lighting manufacturers that will experience revenue declines.

The declining market is experiencing fierce competition. Smaller companies are suffering because they have less resources and might not be equipped to compete against the largest lighting incumbents. In order to stay competitive, lighting companies must shift how they generate revenue. Today, lighting companies are finding alternative ways to generate revenue that are changing the lighting industry. Some companies have been successful with new technologies, such as visible light communications for indoor positioning, some are expanding their lighting controls offerings, and others are experimenting with new business models, such as lighting as a service. Lighting companies will need to define their offerings and demonstrate their competitive edge to solidify their place in the changing lighting landscape.

 

DOE Announces Recipients of SBIR-STTR Phase I Grants for 2017

— January 31, 2017

BulbsThe Department of Energy’s (DOE’s) Office of Science recently awarded four Small Business Innovation Research (SBIR) grants and one Small Business Technology Transfer (STTR) grant for innovation in solid-state lighting (SSL) technology. The grants are aimed at helping the lighting industry reach performance and cost goals, as specified in the DOE’s SSL R&D Plan. First published in 2015, the SSL R&D Plan combined the DOE’s previously published Multi-Year Program Plan (MYPP) and SSL Manufacturing Roadmap. The SSL R&D Plan provides direction and goals for LEDs and OLEDs through 2030, with the aim of increasing energy savings.

What Are the SBIR-STTR Programs?

The DOE is one of eleven federal agencies that offer SBIR-STTR programs enacted under the Small Business Innovation Development Act of 1982. The programs work to increase technology innovation to address specific scientific and engineering challenges. The DOE’s SBIR Program aims to stimulate technological innovation, use small businesses to help meet federal R&D needs, and increase the participation of groups traditionally less represented, such as women and the socially and economically underprivileged. The STTR Program focuses on stimulating scientific and technological innovation and to nurture technology cooperation between small businesses and research institutions.

The SBIR-STTR programs supply funding for Phase I and Phase II projects twice each fiscal year, and for-profit US businesses with 500 or fewer employees are eligible to apply for the grants. Phase I recipients are awarded up to $150,000 for 6 months, and Phase II recipients are awarded funding based on Phase I results and generally do not exceed $1,000,000 for 2 years.

Grant Recipients

The FY2017 Phase I grants were awarded to Pixelligent Technology, Lumisyn, OLEDWorks, SC Solutions, and MicroLink Devices. The lone STTR grant, awarded to MicroLink Devices, is for a joint project between the company and the National Renewable Energy Laboratory to improve the performance of phosphide-based red and amber LEDs. This project aims to improve adoption of red and amber LEDs by allowing for integration with existing device designs and manufacturing processes.

Two of the SBIR grants, awarded to Lumisyn and SC Solutions, focus on LEDs. Lumisyn is working to increase the performance of nanocrystal-based silicones; the project will focus on properties of blue LEDs to produce white light. SC Solutions is poised to work on new heating techniques in metal-organic chemical-vapor deposition. The technique will reduce the need for binning in LED manufacturing and decrease the technology’s cost.

The remaining two SBIR grants, awarded to Pixelligent Technology and OLEDWroks, are for OLED technology. Pixelligent’s grant project will focus on improving the light extraction of OLED products by integrating a high refractive index extraction layer in the OLED material stack. This layer will provide enhanced light output, increase efficacy, and extend the lifetime of the product. OLEDWorks will work to reduce manufacturing costs in the hopes of making OLEDs more attractive for general lighting applications through its grant project. Based on the success of these projects in Phase I, companies could be awarded additional funding for further work on their projects.

Incorporating the R&D efforts of private organizations to help meet federal goals, as the DOE does through the SBIR-STTR programs, can further the overall success of SSL and increase market adoption of these products. Navigant Research projects increased adoption of LED and OLED technologies, and grants such as these will assist with growing the market of SSL products within the lighting industry.

 

Giving to the Environment This Holiday Season

— December 5, 2016

LEDsThe moment Halloween was over, or in some cases before, holiday decorations were already on sale in major retail stores. With the holiday season comes added expenses—from gifts to parties to additional travel. Reducing energy consumption allows consumers to save money on their utility bills while also contributing less greenhouse gas (GHG) emissions. By selecting certain types of gifts, it’s easy to help reduce waste and environmental impact during the holiday season.

Lower Energy Consumption

Holiday lights for both the commercial and residential sectors are already an added expense this time of year. Using LED holiday lights can greatly lower utility bills. Even with the additional upfront costs compared with traditional miniature lights, LEDs are a more economical option. While incandescent lights have a lifespan of roughly 2,000 hours, LED holiday lights have a projected lifespan of upwards of 20,000 hours. In addition to their extended lifespan, LEDs use considerably less energy and thus cost less over the same operating hours as traditional lights. Although LEDs consume substantially less energy than incandescents, reducing overall operating hours will decrease energy consumption even more. One simple way to reduce operating hours is to turn off lights when no one is in a particular room or area.

Reduce, Reuse, Recycle

Many gifts for the holidays are made from recycled materials, such as recycled tires, plastic bottles, reclaimed wood, and repurposed clothes or fabrics. These types of gifts reduce environmental impact over gifts made only with new, non-recycled materials.

Reusing items comes in many forms. Purchasing rechargeable batteries eliminates waste for gifts and home electronics that require batteries. Reusing newspaper, paper bags, maps, scarves, or other fabric as wrapping is an environmentally friendly alternative to purchasing wrapping paper, which not only reduces waste, but also cuts overall holiday shopping costs. For the crafty types, holiday decorations can be made by reusing household items, such as jars, cardboard, strings, and paper.

With the increase in wrapping paper, holiday cards, cans, and bottles, it is important to recycle as many items as possible. As Navigant Research discusses in its Smart Waste Collection report, the collection of smart waste is a growing market and is expected to grow from $57.6 million in 2016 to $223.6 million in 2025. While many recycling programs could improve upon efficiency, they will accept the above listed items, making it easy to recycle instead of throwing these items in the trash. For other things such as electronics, there are often special recycling options for these items or many places that will accept them as donations.

From Thanksgiving to New Year’s Day, household waste increases by more than 25%. Reducing, reusing, and recycling can significantly decrease the amount of waste around the holidays and help form habits to continue waste reduction throughout the year.

 

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