According to the latest report from Grand View Research, Inc., an India & U.S. based market research and consulting company, “The global LED lighting market size was valued at USD 50.91 billion in 2020 and is expected to witness a Compound Annual Growth Rate (CAGR) of 12.5% from 2021 to 2028. Stringent regulations to ban or limit the use of inefficient lighting technologies and government rebate and retrofit programs to encourage the deployment of LED lighting are contributing to the market growth.” The Figure 1 clearly demonstrates their findings.
The report reiterates that LEDs are highly efficient, reliable, and offer a longer life span, which is anticipated to boost their application in both indoor and outdoor settings. These lights are cost-effective compared to incandescent lights, delivering around 50,000 hours of illumination with a small amount of energy consumed. Low cost of
operation and reduced heat losses also make them a suitable replacement for incandescent lights. Technological advancements, shift from conventional to green lighting, and enhanced energy-efficiency standards have also spurred the product demand.
The status quo
In the last few years, in India, the government has taken several steps to promote LED lamps – and more than selling the products it has tried to disseminate the facts on benefits of using LED lamps among the citizens, which has created a fairly good amount of awareness among the people. Literally, now every second Indian citizen knows about the cost saving potential of the LED lamps. As a result of it, the LED Lighting market is growing in the country at a very notable pace.
Recently, Mordor Intelligence, an organisation maintaining its domain-specific teams of research experts who are continuously tracking enterprises across 20 industries, has found that “The Indian LED Lighting market is expected to grow at a CAGR of 24.3% during the forecast period (2021-2026). In the current market state, LEDs have gained a mainstream in the lightings market. Key factors behind this are the continuous declining LED prices in the country and favourable government initiatives, such as UJALA and SLNP, offering LEDs at a subsidized cost and LED installation projects for streetlights, respectively.” The Figure 2 represents their observations. Some of the supportive (positive) developments that Mordor Intelligence cites include:
- In April 2019, under the Indian government’s energy efficiency program, 21 crores of LED bulbs were distributed in the country, which resulted in the saving of INR 11,000 crore for the consumers. State-run Energy Efficiency Services Limited (EESL), implementing the UJALA scheme for distributing LED bulbs to the consumer, has reduced the procurement price of these lights to INR 38 per unit. The program was aimed at deploying more than 770 million LED lamps across the country by 2020.
- In addition to this, the rising awareness about the cost-effectiveness and eco-friendliness of LED lights among the consumers is estimated to continue to drive the demand for LED lighting at residential as well as commercial sectors. In recent years, India has demonstrated the possibility of deploying LEDs rapidly on a large scale with the right financing and market mechanism. India is now one of the largest LED lighting markets in the world after the UJALA program, offering LED bulbs that are 50% more energy-efficient than other lamps available.
- However, the market has been affected by the recent outbreak of COVID 19, and companies have been forced to restructure their strategies to deal with the ongoing pandemic. Companies, like Telensa and signify, were the worst hit due to this pandemic. In February 2020, Signify had planned to upgrade its solar connected street light to toggle between solar and grid power by using Philips Combo Charge Controller. But the company has gone into financial crunch due to the COVID outbreak, the company in March 2020 had announced a 20% pay cut for its employees.
So, the market of LED lights is on growing track. But, yes there is still a big BUT…
LED-based lights are not like the GLS lamps (incandescent lamps) or CFLs. If standard power sources are used, they do not burn out like incandescent lamps, but their lumen output reduces with time, which is called ‘lumen depreciation’. The lifetime of an LED lamp is predicted based on the estimation of its lumen depreciation.
This is the area where we need to deploy more vigilance. Common users are mostly influenced by the information on saving operating cost – and of course often the initial purchase price influences the buying decision. Most of them do not even know what lumen is, what efficacy means and naturally they do not even think of lumen depreciation.
In the physical retail market as well as in the online market, this shortcoming is often being capitalised to enhance profit. Many non-standard LED lamps are still available in the retail as well as online market. There may be an initial (purchase) cost advantage, however, these products fail to offer the benefit of reasonable durability. And who bothers to verify their efficacy? Thus, they often consume more watts than specified, and may introduce harmonics in the line.
Thus, we need to ensure that non-standard products are completely eliminated from circulation in the market. For which mere determination and declaration of any standard is not enough, we need to establish ways for surprise inspections. Many retailers are regularly selling even unstamped LED lamps in all parts of our country, which practice should be stopped with immediate effect.
A good recent step in EU
As the quality of LED lights is improving very fast these days, it has become very important to label the products properly to control their distribution – so that the buyers can understand the quality level of the products that they buy at the time of purchase. It is also very important to disseminate this information in a big way. The label should be very simple, so that everyone can understand that.
In this connection, recently a very good step has been taken in the European Union (EU). To help EU consumers cut their energy bills and carbon footprint, a brand new version of the widely recognised EU energy label for light bulbs and other lighting products has been applicable in all shops and online retail outlets from Wednesday, 1st September 2021.
Commenting on the step, EU Energy Commissoner Kadri Simson said, “Our lamps and other lighting products have become so much more efficient in the recent years that more than half of LEDs are now in the A++ class. Updating the labels will make it easier for consumers to see what are the ‘best in class’ products, which in turn will help them save energy and money on their bills. Using more energy efficient lighting will continue to reduce the EU greenhouse gas emissions and contribute to becoming climate-neutral by 2050.”
The new scale is stricter and designed so that very few products are initially able to achieve the “A” and “B” ratings, leaving space for more efficient products to gradually enter the market. The most energy efficient products currently on the market will typically now be labelled as “C” or “D”. A number of new elements will be included on the labels, including a QR code that links to an EU-wide database, where consumers can find more details about the product.
However, to save the interest of the stockists of the existing products, the new rule has a relaxation for an 18-month period – where the products bearing the old label can continue to be sold on the market in physical retail outlets. For online sales, however, the old labels displayed online will have to be replaced by the new ones within 14 working days.
Indians are now aware of the advantages of the LED lamps, however, all the LED lamps available in the market are not of the desired quality – and most of the end users are not aware of the quality indicator labels. So, low quality products are still in circulation in the market, which is against the interest of the consumers and weakening the purpose of introducing LED lamps. Thus, we need to spread awareness on the quality level of the LED lamps, introduce simpler labels for each kind of LED lamp, and start a system of surprise inspection in retail shops – to reap the true advantages of mass deployment of the LED lamps.
By P. K. Chatterjee (PK)