LED in road and street lighting 2013 Report by Yole Developpement

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The first in-depth report covering an LED lighting application market. A global business reaching almost $516M at the system level by 2016.


ROAD AND STREET LIGHTING IS A KEY DRIVER FOR LED TECHNOLOGY IN GENERAL LIGHTING

In less than a decade, LED technology has created more turmoil in the lighting industry than anything occurring over the previous century. Every professional agrees that what used to be a conservative, well-controlled market is undergoing a massive change, referred to as “the LED revolution”. Therefore, it’s high time to take a close look at what’s
happening and why, since each General Lighting application, be it indoor or outdoor, has its own way of adopting LEDs.

Outdoor lighting is no stranger to revolution. In fact, today it’s one of the two most dynamic General Lighting market segments for LED adoption. Within the segment, architectural lighting was the early adopter, but the main driver these days is definitely road and street lighting. Historically the largest outdoor segment, it now offers the best prospects for LED development in professional exterior lighting. Road and street lighting is a very attractive market, with EBIT levels generally between 5 - 15% and steady growth despite the economic downturn.

We estimate that LED luminaire revenue will reach $435M in 2013 and peak at $516M by 2016, fuelled by the increased need for energy efficiency. Growth will be driven firstly by tunnel lighting, and then relayed into highway, road, residential and amenity lighting applications starting in 2014. By 2017, market size should decline because of a decreasing replacement market (due to LED-based systems’ higher lifetime) and also because of LED Luminaire’s ASP.

This report presents all road and street lighting applications and associated market metrics within the period 2008-2020 for each application and region, detailing drivers & challenges, key players, associated volume/market size (luminaires installed base, LED luminaire and packaged LED sales), and LED penetration rate.


A NEW APPROACH TO LUMINAIRE DESIGN REQUIRING NEW MANUFACTURER COMPETENCIES

Designing with LED implies major changes for conventional luminaire manufacturers – mostly at the optical, electrical and physical levels. With the move to LED technology, traditional luminaire manufacturers face dramatic organizational changes, such as integrating electronic competencies, upgrading optical competencies, taking ownership of the light source (SSL), and revamping production organization. Consequently, internal revolution is required within luminaire companies in order to take full advantage of the LED boom.

More information on the report at http://www.i-micronews.com/reports/LED-road-street-lighting-report/14/377/

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LED in road and street lighting 2013 Report by Yole Developpement

  1. 1. © 2013 1Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.LED In Road & Street LightingMarket Analysis, Applications, Technology Trends & Industry StatusSample75 cours Emile Zola, F-69001 Lyon-Villeurbanne, FranceTel : +33 472 83 01 80 - Fax : +33 472 83 01 83www.yole.fr11 rue Jean Macé, F-69600 Oullins, FranceTel : +33 686 086 239www.luxfit.eu
  2. 2. © 2013 2Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.Table Of Contents (1/4)• About The Authors Of The Report P6• Introduction To The Report P7• Objectives Of The Report P8• Executive Summary P9• Overview Of Road And Street Lighting P30– Applications• Outdoor Lighting Applications– Introduction– Segmentation• Road And Street Lighting– Application Segmentation– Product Segmentation• From Watts to Lumens– Market Data• Market Size ($) And Volume (Units)– What Do We Count?• 2012 Data– Overview– Analysis By Region» Overview» Focus on BRIC– Analysis By Application– Actors Of The Business Chain• Route To Market In Outdoor Lighting Projects• End Users• Specifiers And Influencers– Overview– Lighting Designers• Installers• Distributors• Manufacturers– Overview– Focus On The Lighting Industry– Other Players– Supply Chain• Conventional Road And Street Lighting Supply Chain• Trends– Market Drivers• Safety, Security And Quality Of Life Aspects• Environmental Aspects• Economic Aspects• Regulatory And Standardization Aspects– Overview– Example Of EN 13201
  3. 3. © 2013 3Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.Table Of Contents (2/4)• The LED Value Proposition P68– Conventional Luminaire vs. LED Luminaire: A New Approach ToLuminaire Design• Conventional Luminaire vs. LED Luminaire– Main Design Differences– Comparison Of Cost Structure And Margin– A Major Evolution In Product Design– Managing The Light Source - Towards Modularity– An Internal Revolution Within The Company• LED Strengths And Weaknesses– LED Technology Applied To Road And Street Lighting• Drivers for LED Adoption In Road And Street Lighting• The New Key Decision-Making Criterion: ROI• Example Of Payback Calculation• Focus On Mesopic Photometry: Towards A New Evaluation of LEDPerformance• Focus On Melatonin Secretion• Alternative Technologies– Overview– Summary Table• Impact Of LED Adoption On The Poles And Brackets Industry• Impact Of LED Adoption On The Controls Industry• Focus On Telemanagement• Focus On Smart Grids• Lighting Design Requirements– Designing In Road And Street Lighting– Implications Of LED Lighting– LED Technology Applied To Road And Street Lighting• Operation And Maintenance Requirements• Focus On Lifetime And The « Warranty War »• Economic Requirements• Regulation And Standards: Expectations And Fulfilment• Luminaire Design Standardization: LED Replacement And Upgrade• Next Technological Steps And Consequences– LED Performance And Cost– Towards Intelligent Lighting• Focus On Glare Issue– LED Light Engine Technology• Definition & Characteristics• Optics• Modularity• Thermal Management– Overview Per Application• Highway And Road Lighting• Residential And Amenity Lighting• Tunnel Lighting• LED Supply Chain (1/2) P115– Introduction• LED Road And Street Lighting Supply Chain– Overview– What Change From Traditional Supply Chain?• Competitive Landscape– Traditional Players And New Entrants– 2012 Market Share
  4. 4. © 2013 4Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.Table Of Contents (3/4)• LED Supply Chain (2/2) P115– Key Players Company Profiles• Cooper• CREE• General Electric• Osram• Philips• Schréder• Toshiba• Zumtobel• Drivers for LED Technology P130– Technology Drivers• Expected Cost of LEDs• Impact Of Technology Improvements• Service And Upgrade• Role Of The Component Technology Roadmap• Trend: A New Automotive Lighting Approach– Application Drivers• Intelligent Lighting• Less Lumen, More Current• 100% LED In Tunnels– Economic Drivers• Energy Efficiency• Impact Of Global Urbanization• New Business Models• Industry Trend: Toward Vertical Integration• Market Metrics And Trends: The LED Revolution P148– Lumen Consumption Forecast• General Lighting– Introduction– IEA and SNL Models– Model Developed in the Report• Road and Street Lighting– Overview– Analysis Per Segment– LED Adoption For Road And Street Lighting• Adoption By Application• Adoption By Region– Luminaire Market For Road And Street Lighting (System Level)• Total Luminaire Market For Road And Street Lighting– Installed Base (2008 - 2020) - Split By Application– Installed Base (2008 - 2020) - Split By Region• LED Luminaire Market For Road And Street Lighting– Market Volume (2008 - 2020) - Split By Application– Market Volume (2008 - 2020) - Split by Region– LED Luminaire ASP (2008 - 2020)– Market Size (2008 - 2020) - Split By Application– Market Size (2008 - 2020) - Split By Region– Packaged LED Market For Road And Street Lighting (Device Level)• Market Volume (2008 - 2020)• Market Size (2008 - 2020)• General Conclusion P170
  5. 5. © 2013 5Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.Table Of Contents (4/4)• Appendix P173– Glossary– Index Of Companies And Organizations• About Yole Développement and LED Activity P180
  6. 6. © 2013 6Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.Introduction To The Report• Within less than a decade, the LED technology has generated more turmoil in the lighting industry thananything that had happened in the previous century. All professionals agree today that what used to be aconservative, well-controlled market is undergoing a massive change, referred to as “the LED revolution”.• Therefore, it is high time to take a close look at what is happening, and why. Whilst a lot of informationon the lighting industry at large is already available from various sources, each of its applicationsegments, be it indoor or outdoor, has its own way of adopting LEDs - and this is worth documenting.• Outdoor lighting is no stranger to the revolution. As a matter of fact, it is today one of the two mostdynamic segments of the general lighting market for LED adoption.• Within this, architectural lighting has been the early adopter. But the main carrier is now definitely road &street lighting. Historically the largest outdoor segment, it also offers now the highest prospects for LEDdevelopment in professional exterior lighting.• Road and street lighting is also a very attractive market: EBIT levels are generally between 5 and 15%, andgrowth remains steady despite economic downturns.• In that context, Yole Développement and Lux Fit represent the best fit, in order to provide professionalswith a tool for decision-making in this segment. The ambition of this report is nothing short of being theirbest ally, in the coming months, for their strategic choices in road and street lighting.• Your feedback will be instrumental in making it even more powerful in future issues.
  7. 7. © 2013 7Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.Objectives Of The Report• To provide readers with a description and evolution of the road & street lighting market,technologies, and industry playground.• To describe how LEDs are penetrating this market (drivers, strategies, players, technologies)and how they will deeply alter its structure.• To provide readers with market metrics & dynamics, industry evolution forecasts andprojection from both business and technology standpoints.
  8. 8. © 2013 8Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.The Road And Street Lighting MarketOverview• Road and street lighting is one of the three mainsegments of outdoor professional lighting.• Key figures (2012 estimations):– Revenue: $XXB (lamps + luminaires).– Volume: ~XXM units.– Installed base: ~XXM light points.– Electricity consumption: XXTWh.• The three main applications in road and streetlighting correspond to six main product categories.• Each application has the following weight in value:– Highway and road: ~XX%.– Residential and amenity: ~XX%.– Tunnel: ~ XX%.• The main market players are:– End-users: Public authorities, private investors.– Specifiers: Consultants, engineers, lighting designers.– Installers: Contractors, utilities, facility managers.– Suppliers: Distributors and manufacturers.A traditional, profitable industry centered on public end-users.Highway& RoadResidentialStreet& AmenityTunnelFunctional RoadLanternHigh Power FloodlightDecorative StreetLanternHeritage LanternPost-top Decorative /Architectural LuminaireTunnel Luminaire
  9. 9. © 2013 9Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.Route To Market In Outdoor Lighting ProjectsSupplierDistributor ManufacturerInstallerContractor Utility Facility ManagerSpecifierConsultant ArchitectEngineeringBureauLightingDesignerEnd UserLocal authorityHighwayauthorityPrivate investorStakeholdersInfluencers RoleMotoristsCyclistsPedestriansResidentsVisitorsLobbiesPoliticiansLocalbusinessesFUNDINGDESIGNINGSPECIFYINGINSTALLINGMAINTAININGDELIVERINGSERVICING
  10. 10. © 2013 10Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.End Users (1/2)• Within public end-users1, different forces are at play:– A technical competence, proposing decisions on rational criteria(typically the public lighting department of a city).– A political competence, making decisions under the influence ofmore emotional criteria (pleasing voters being often on thehidden agenda).• Therefore the complexity of decision-making must be fullygrasped and may vary greatly from one project to the other,even with the same players.• Additionally, due to the specific functioning of publicadministrations, decision-making may result quite lengthydue to:– Public budgeting cycles.– Mandatory council votes for investments.– Election cycles that may either hasten or delay decisions.End users are mainly public.1. The LUCI network groups over 60 cities around urban lighting, with the aim of sharing good practice and developing knowledge in this areaStreet lighting inauguration in Muddebhihal, IndiaPublic lighting as a political toolThe political agenda has a clear impact on public lighting.Most manufacturers report a recurring sales peak in theyear prior to a local election, and a subsequent drop inthe ensuing 1-2 years.Lighting is a political tool because:• It is very visible to voters.• It is a relatively easy and quick infrastructureinvestment.• Compared to other investments (e.g.: building alibrary), it requires a smaller budget.
  11. 11. © 2013 11Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.The Road And Street Lighting Industry (2/2)Leading outdoor luminaire suppliers by geographical region.Latin America:North America:Middle East and Africa:CIS countries: Asia / Pacific:Focus on ChinaFocus on IndiaFocus on PacificFocus on JapanEurope:XXXXXXXXXXXXXXXXXXXXXX XXXX XXXXXXXXXXXXXXXXXX
  12. 12. © 2013 12Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.Safety, Security And Quality Of Life Aspects• Safety remains the #1 driver of the road and street lighting market.It is translated into different areas of application:– Traffic safety: A constant drive to improve visibility in order to preventaccidents.– Users safety: A need to assure that the installed equipment will notcause injuries (falling luminaires…).– Operators safety: In particular, electrical safety is a must.• Security is also a strong driver in this segment. This appliesspecifically to the urban installations.– Regular studies bring evidence and counter-evidence of lighting as acontributor to urban security at night… Debate continues!• Quality of life has emerged in the last decade, although it has lostsome attention with the more recent upsurge of energy efficiency.– Visual comfort is expected: With higher colour rendering, adequatecolour temperatures, glare control.– Landscape integration is also a clear preoccupation: initially purelyfunctional, road and street lighting is increasingly integrating aestheticscriteria driving the segment’s expectations towards architecturaloutdoor lighting. Significantly, industrial designers are now involved inmost luminaire and pole development projects.Pictures from GEA case for white lightEven before the start of the « LEDrevolution », white light has emerged asa strong industry trend. It is valued for:• Its comfort – A colour temperaturecloser to that of daylight, as opposedto the orange glow of sodium; andbetter colour rendering.• Its safety – Improved peripheralvision and quicker response,evidenced by research.• Its security – Improved facialrecognition, and clear preference byCCTV operators.
  13. 13. © 2013 13Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.LED Light EngineThermal Management - Introduction• Traditionally, there are 3 level of thermal management for LED-based lighting products… However, insome cases (Chip On Board or Chip On Fixture), there can be only 1 or 2 level(s) of thermal management.• Heat is an issue in LED-based lighting systems as it can have 3 main consequences:– Decrease of lumen output in the time.– Derating of flux in the time.– Increase of failure rates.• Maximize Maintenance / Flux• Minimize FailuresREQUIREMENT =
  14. 14. © 2013 14Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.Application Focus - Tunnel Lighting• Tunnel lighting offers strong opportunities for LEDs. The #1 benefit of LEDs in tunnel is lifetime, a clearadvantage where maintenance generates heavy costs and disturbances (traffic interruption…).• The LED technology cannot yet fully cover all of tunnel lighting. This is owed to the various zones,requiring different luminance levels. Until now, LED solutions have been feasible for the transit andinterior zones (3 & 4 on the diagram). Higher light output solutions are needed to meet the requirementsof the other zones, especially the access and threshold zones. LEDs can technically address these, but arenot yet economically feasible without a control system.• Tunnel lighting represents a huge opportunity for LED solutions. For example:Europe has over XXkm of road tunnels (Italy XXkm, Norway XXkm) / China has XXkm of road tunnels / The USA andCanada have XXkm of road tunnels.• China and Italy have programmes to convert road tunnels to LED lighting:– Autostrade per l’Italia has initiated in 2008 the replacement of XX luminaires in its XXkm of tunnels.Cree’s The Edge TSP was selectedby Autostrade per l’Italiafor their tunnel refurbishments
  15. 15. © 2013 15Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.LED Luminaire Market For Road And Street LightingMarket Volume (2008 - 2020) - Split By Application• Residential, amenity and tunnel lighting was the main driver for LED luminaire market in 2012… However,the technology should really trigger highway and road lighting applications starting from 2013.• LED luminaire market volume should boom until 2017 (XXMunits) and then stabilize until 2020 (XXMunits)due to decrease of replacement market (with the higher lifetime of LED-based system).In 2012, LED luminaire for road and street lighting represented a market volume of nearly XXMunits.Remark:In our scenario, we assume a moderatereplacement rate of conventionalluminaires (i.e. replacement by LEDluminaires before end of life ofconventional luminaires) explaining marketvolume stabilization by 2016 - 2017...… However, should this replacement rateget higher, market volume could continueto increase until 2019 - 2020.
  16. 16. © 2013 16Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.75 cours Emile Zola, F-69001 Lyon-Villeurbanne, FranceTel : +33 472 83 01 80 - Fax : +33 472 83 01 83Web: http://www.yole.frAbout Yole Développement and LEDActivity
  17. 17. © 2013 17Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.Yole DéveloppementField of Research Activity• Yole Développement is a market research and strategic consulting company founded in 1998.• We are involved in the following areas:• Our research is acquired by in-house personnel via open-ended discussions and interviews.– We employ 32 full-time analysts with technical and marketing degrees– Primary research includes over 3,500 interviews per year
  18. 18. © 2013 18Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.Yole DéveloppementAround the WorldWe are present in Europe, North America and AsiaLyon, France -Headquarters40% of our activity is inEurope30% of our activity is inAsia30% of our activity is inNorth AmericaYole Inc.Yole JapanYole KoreaYole TaiwanYole ParisSystem PlusConsulting
  19. 19. © 2013 19Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.Yole DéveloppementMission Statement – Knowledge-Based Company• We help our customers develop their business through specific analysis and reports, including:– Accurate market data, market segmentation and marketing analysis.– Technical evaluation, technology cost and Cost of Ownership (COO) analysis.– Patent portfolio analysis.– Freedom to operate analysis.– Strategic analysis to enhance company and business unit performance.– Strategic development support (growth opportunities identification, M&A support, investor(s)identification,etc.).– Advertising opportunities in Yole’s magazines, webinars and specific events.• Our customers get measurable, operational results from our actions!
  20. 20. © 2013 20Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.Supporting the Entire Value ChainYole consultants provide Market Analysis, Technology Evaluation and Business Plan Assessment forcustomers along the entire value chain
  21. 21. © 2013 21Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.About Yole’s LED Analyst TeamDr. Philippe ROUSSEL - Business Unit ManagerDr. Philippe ROUSSEL holds a PhD in Integrated Electronics Systems from theNational Institute of Applied Sciences of Lyon (INSA - France). He joined YoleDéveloppement in 1998 and is Business Unit Manager of the CompoundSemiconductors, Photovoltaic, LED and Power Electronics department.Dr. Eric VIREY - Senior AnalystDr. Eric VIREY holds a PhD in Optoelectronics from the National Polytechnic Instituteof Grenoble (INPG - France). In the last 12 years, he has held various R&D,engineering, manufacturing and marketing positions with Saint-Gobain. Most recently,he was Market Manager at Saint-Gobain Crystals, in charge of Sapphire andOptoelectronic products.Pars MUKISH - AnalystPars MUKISH holds a master’s degree in Materials Science & Polymers and amaster’s in Innovation & Technology Management (EM Lyon - France). He works atYole Développement as Market and Technology Analyst in the fields of LED andLighting Technologies, carrying out technical, economic and marketing analysis.Previously, he was a Marketing and Techno-Economic Analyst for several years withthe CEA.
  22. 22. © 2013 22Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.Yole Activitieswww.yole.frYOLE FINANCEM&A / Due Diligence /Fund raising serviceswww.yolefinance.comMEDIANews feed / Magazines / WebcastsREPORTSMarket & technologyPatent AnalysisReverse costing reportCONSULTINGMarket researchTechnology & StrategyPatent Analysis
  23. 23. © 2013 23Copyrights © Yole Développement SA and Lux Fit SAS. All rights reserved.2012 - 2013 LED Reports (Latest & To Come)Status of theLED Industry©2012 Copyrights © Yole Développement SA. All rightsreserved.LED Front-End©2012 Copyrights © Yole Développement SA. All rightsreserved.LED Packaging©2012 Copyrights © Yole Développement SA. All rightsreserved.UV LED©2012 Copyrights © Yole Développement SA. All rightsreserved.LED Phosphor©2012 Copyrights © Yole Développement SA. All rightsreserved.LED CoSim+©2012 Copyrights © Yole Développement SA. All rightsreserved.OLED ForLighting©2012 Copyrights © Yole Développement SA. All rightsreserved.SapphireSubstrates©2012 Copyrights © Yole Développement SA. All rightsreserved.III - V Epitaxy©2012 Copyrights © Yole Développement SA. All rightsreserved.

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