Global Lighting-as-a-Service (LaaS) Market Size, Forecast, and Trend Highlights Over 2025-2037
Lighting-as-a-Service Market size was valued at USD 1.6 billion in 2024 and is poised to reach USD 10 billion by the end of 2037, expanding at a CAGR of 16.7% during the forecast timeline from 2025 to 2037. In 2025, the industry size of lighting-as-a-service is evaluated at USD 1.9 billion.
The LaaS supply chain is characterized by a multi-tiered network of raw material suppliers and service-level operators. Key upstream inputs include copper and aluminum for wiring and heat sinks. In 2023, the U.S. imports of unwrought aluminum reached USD 4.8 billion, while that of copper reached USD 3.2 billion, highlighting a YoY increase of 8.5% and 6.1% respectively. The assemblers are saturated in APAC, particularly in South Korea and China, and in Eastern Europe, leveraging proximity to semiconductor fabs. In terms of exports, the U.S. exported USD 1.1 billion of lighting fixtures in 2023, an increase of 4.7% from 2022, to leverage the rising demand from smart systems.
An analysis of the value chain indicates the Producer Price Index (PPI) for lighting equipment increased by 12.0% during the period from January 2022 to December 2024. The rise in PPI outpaced the overall increase in manufacturing of 7.7% over the same time period. Similarly, the Consumer Price Index (CPI) for household furnishing, including residential lighting, increased by 9.1%, reflecting higher component costs to end users.
A major indicator of the burgeoning IaaS market is the increase in public investment. For instance, in FY 2024, the U.S. DoE allocated USD 180 million towards R&D of solid-state lightning research. The investments are poised to improve the lifetime efficiency by over 25%. Another major public investment is via the Horizon Europe program, which has earmarked 120 million euros for smart-lighting pilots in urban testbeds. Additionally, as the LaaS model shifts CapEx into OpEx, service providers are investing in regional assembly hubs to mitigate the impact of supply chain bottlenecks. The favorable trends indicate a rising expansion of the LaaS market.
LaaS Sector: Growth Drivers and Challenges
Growth Drivers
- Strict government mandates for energy efficiency and sustainability: Governments across the world have introduced strict energy efficiency mandates that are driving the adoption of smart lighting systems. These mandates have impacted the public and commercial sectors. For instance, the Better Buildings Initiative of the U.S. includes lightning upgrades as part of the energy-efficient measures, which deployed over 1.3 million LED streetlights across U.S. cities. Another major initiative is the EU Green Deal, where the European Commission has earmarked around 1 billion euros to finance public infrastructure projects that include smart lighting systems.
- Increasing corporate and commercial real estate demand for cost-effective and scalable solutions: Trends highlight that commercial real estate owners are shifting to LaaS models. This trend is supported by the rising requirement to meet sustainability and cost goals. Recent data supporting the trend was from the U.S. commercial real estate sector, which invested USD 1.0 billion in energy-efficiency technologies in 2023, with lighting services constituting a major part of the investment. Additionally, LaaS allows businesses to convert traditional capital expenditures into operational expenses. This model supports the growing trend towards flexible financial structures. In terms of successful use cases, the U.S. Energy Information Administration (EIA) reported that an average of 35% energy savings were achieved by the commercial buildings that have adopted LED-based LaaS solutions.
Technological Trends of the Global Lighting-as-a-Service (LaaS) Market
The global lighting-as-a-service market is expanding rapidly. Major technological advancements in IoT and energy-efficient systems are driving the growth. A recent advent supporting growth is the advent of AI, which has bolstered the creation of smart lighting. A successful case study in the manufacturing sector is that of Siemens and its deployment of AI-powered LaaS systems, which reduced factory lighting energy costs by over 35% within the first year. The table below highlights the successful use cases of LaaS solutions in various sectors:
|
Industry |
Technology |
Adoption Rate 2024 |
Impact Statistic |
Company |
Results Achieved |
|
Manufacturing |
IoT-enabled Smart Lighting |
44% |
41% reduction in energy consumption |
Siemens |
38% energy cost savings in 1 year |
|
Telecom |
AI for Predictive Maintenance |
29% |
16% improved network energy efficiency |
Verizon |
Reduced downtime, increased uptime |
|
Finance |
Blockchain for Billing |
23% |
21% decrease in billing disputes |
JPMorgan Chase |
Enhanced contract transparency |
|
Commercial |
Sensor-Based Occupancy |
51% |
36% energy savings in office lighting |
Philips Lighting |
Reduced operational expenses |
|
Smart Cities |
5G Connectivity |
31% |
16% faster communication & scalability |
Ericsson |
Enhanced smart city deployment efficiency |
Building Supply Chain Resilience in the Global Lighting-as-a-Service (LaaS) Market
The global lighting-as-a-service market is impacted by disruptions in the supply chain due to geopolitical conflicts and logistical bottlenecks. To reduce the reliance on single suppliers, companies are diversifying their supplier base. The diversification has assisted in the measurable decline of supply chain bottlenecks. The table below highlights the supply chain resilience strategies of key players in the market:
|
Company |
Strategy |
Technology/Approach |
Outcome (Year) |
Impact Metric |
|
Signify |
AI-driven predictive analytics |
AI for supply chain forecasting |
Reduced lead times by 16% (2023) |
Improved delivery speed |
|
Acuity Brands |
Supplier diversification |
Expanding supplier base |
21% reduction in supply shortages (2024) |
Enhanced supply continuity |
|
Cree Lighting |
Local supplier integration |
Sourcing from local suppliers |
10.5% logistics cost savings, 12.3% CO2 reduction (2024) |
Lowered carbon footprint and costs |
|
OSRAM |
Blockchain for traceability |
Blockchain-based transparency |
Improved supplier traceability |
Reduced fraud and enhanced compliance |
Challenges
- High upfront costs and complex financing models impede adoption among SMEs: A key impediment to the global IaaS market is the difficulties SMEs face across various regional markets face in fulfilling multi-year service contracts. The budget constraints and limitations of flexible payment options are impairing SMEs. This remains a major financial barrier, which is limiting market penetration forcing providers to innovate accessible pricing models.
Lighting-as-a-Service Market: Key Insights
| Report Attribute | Details |
|---|---|
|
Base Year |
2024 |
|
Forecast Year |
2025-2037 |
|
CAGR |
16.7% |
|
Base Year Market Size (2024) |
USD 1.6 billion |
|
Forecast Year Market Size (2037) |
USD 10 billion |
|
Regional Scope |
|
LaaS Segmentation
Installation Type (Indoor, Outdoor)
The indoor segment is poised to hold a leading revenue share of 62.6% revenue share throughout the forecast period. The segment's heightened revenue share is reinforced by the surging demand in commercial office spaces, healthcare facilities, residential spaces, retail stores, etc. Indoor lighting systems solve critical pain points by mitigating energy use. In terms of successful use cases, Philips reported a 40% reduction in energy usage through the use of IoT-enabled indoor lighting systems via their sustainability report. The future outlook of the indoor segment is lucrative, with increasing demand predicted from the rising construction projects.
End user (Commercial, Municipal, Industrial)
The commercial sector of the lighting-as-a-service market is projected to expand during the forecast period. A significant factor is the rising energy costs, prompting a greater emphasis on energy savings. Additionally, the scalability of LaaS models fits seamlessly with the commercial requirement for easy upgrades. The largest demand for LaaS solutions is poised to remain consistent throughout the commercial sector, with application opportunities set to be rife in the emerging markets of APAC, due to the surging urbanization driving demand for heightened commercial construction activities.
Our in-depth analysis of the global lighting-as-a-service market includes the following segments:
|
Installation Type |
|
|
End user |
|
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Customize this ReportLaaS Industry - Regional Scope
APAC Market Forecast
The APAC lighting-as-a-service market is poised to dominate with a 38.7% revenue share throughout the forecast period. A significant driver of the APAC market is the large consumer base for LaaS solutions, ranging from the commercial to residential sectors. An industry analysis highlights a growing demand for scalable, subscription-based lighting solutions across industries. The region has experienced considerable urbanization in this decade, with the percentage expected to double by the end of 2037, creating sustained opportunities to supply LaaS solutions in construction projects.
The China LaaS market is poised to maintain its leading revenue share in APAC. The aggressive deployment of smart city projects in the country is a significant market driver. The New Infrastructure Initiative has prioritized IoT and green energy investments, driving the demand for LaaS in commercial and municipal sectors. Additionally, the push to reduce carbon emissions in China has led to a rising demand for smart lighting installations across multiple sectors. Major players such as Signify and Philips have capitalized on this trend to expand their LaaS contracts in the tier 1 and 2 cities of China and leverage the growing bid to improve infrastructure across the country.
North America Market Forecast
The North America lighting-as-a-service market is projected to expand at a 14.2% CAGR throughout the forecast timeline. The regional market is bolstered by the extensive retrofit opportunities in municipal and commercial buildings across the U.S. and Canada. Stringent regulations such as the International Energy Conservation Code (IECC) are pushing the application of IaaS solutions in the private and public sectors. A key segment with lucrative application potential is the large-scale events set to be organized in the region, for instance, FIFA World Cup 2026, which can create major opportunities for the proliferation of LaaS solutions.
The U.S. LaaS market accounts for the bulk of revenue share in North America, owing to rising demand in commercial buildings. For instance, in 2024, the U.S. DOE reported that around 19% of the country’s electricity was consumed by commercial buildings. Additionally, federal incentives encourage LaaS adoption to cut energy costs and reduce greenhouse gas emissions. Within the region, major players such as Cree Lighting have reported a more than 15% reduction in operational expenses for clients via LaaS offerings.
Major Players in the LaaS Market
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
The global lighting-as-a-service market remains competitive with established multinational corporations from the U.S., Europe, and APAC holding leading shares. Acuity Brands, Signify, OSRAM, and others hold dominant shares in the global market. Trends within the sector highlight increasing investments in energy-efficient technologies to expand market presence. The table below highlights the major players in the IaaS market along with their revenue shares (2024):
|
Company Name |
Country |
Revenue Share (2024) |
|
Signify N.V. |
Netherlands |
18.8% |
|
Acuity Brands, Inc. |
USA |
15.7% |
|
OSRAM Licht AG |
Germany |
13.6% |
|
Panasonic Corporation |
Japan |
10,4% |
|
Cree, Inc. (now Wolfspeed) |
USA |
9.9% |
|
Toshiba Lighting & Technology |
Japan |
XX |
|
Koninklijke Philips N.V. |
Netherlands |
XX |
|
Samsung Electronics |
South Korea |
XX |
|
Crompton Greaves Consumer Electricals |
India |
XX |
|
Havells India Limited |
India |
XX |
|
Clipsal by Schneider Electric |
Australia |
XX |
|
Dialight PLC |
UK |
XX |
|
Osram Continental GmbH |
Germany |
XX |
|
Lumileds Holding B.V. |
Netherlands |
XX |
|
Panasonic Malaysia |
Malaysia |
XX |
Below are the areas covered for each company that is a key player in the lighting-as-a-service market:
In the News
- In June 2024, the Acuity Brand introduced Helios, which is a smart lighting-as-a-service platform. The new platform was integrated with analytics powered by AI targeting applications in commercial office buildings. The company reported a more than 14% increase in new LaaS contracts in the second quarter of 2024.
- In March 2024, Signify expanded its Interact Pro cloud-based lightning management system. The new solution targets SMEs by offering remote lighting control and energy analytics. Additionally, Signify reported a more than 20% increase in subscription revenue via the Interact Pro cloud system.
Author Credits: Abhishek Verma
- Report ID: 2966
- Published Date: May 26, 2025
- Report Format: PDF, PPT
