The document provides an overview of the transformation of the lighting market driven by LED lighting and smart lighting systems. It discusses how LED lighting is becoming mainstream due to energy efficiency and longevity advantages over traditional lighting. It also describes how connected smart lighting can achieve energy savings of up to 90% through controls and sensors. Finally, it covers trends like lighting as a service business models and human-centric lighting design.

1. October 2016
CLARUS

2. Solid-state lighting holds the promise of huge energy savings and long-
lasting light sources. This Future of Lighting - White Paper provides an
overview of the dramatic changes taking place in lighting across the globe.
The report focusses on market trends, technologies and opportunities, but
not on the major changes with the lighting manufacturing sector. We hope
you find it useful.
In 2015, the Clarus Property Services
Group diversified into LED Lighting, with
great success, securing and completing
numerous large commercial LED retrofits,
proudly working with many of the leading
property asset managers. On all of our
projects, Clarus secured up to 30% Energy
Efficiency Obligation Scheme (EEOS)
rebates for our clients and eligibility for
100% Accelerated Capital Allowances (ACA) in the first year.
Strategically, Clarus progressed into Smart Lighting Controls, which with
LED lighting can reduce lighting-related energy use by up to 90%, and
Lighting as a Service to mitigate client budgeting constraints. Our vendor-
neutral stance, enables Clarus design and implement the best
performance, most competitive technology on each project we construct.
With this new approach to office and industrial lighting, LaaS providers
have the potential to save billions of in energy costs annually - what we’ve
seen so far is just the beginning.
As Clarus continues its journey of research, development and
implementation of LED lighting and controls, we will happily share our
insights, partner and collaborate with interested parties. Enjoy.
www.clarusps.com

3. Contents
LED Lighting from Disruptive to Mainstream............................................................. 1
The Rapid Rise of LED Lighting..................................................................................... 2
What’s Driving the LED Lighting Market? .................................................................... 4
The Shift to Connected Smart Lighting ....................................................................... 5
It’s not just Lighting ....................................................................................................... 6
Retrofitting Advanced Lighting Controls ..................................................................... 7
Look no Wires ................................................................................................................ 8
Lighting as a Service – a Zero Hassle Strategy............................................................ 9
Watts Next? ..................................................................................................................10
End of the Light Bulb?..............................................................................................10
Towards Human Centric Lighting...........................................................................10
New LED Design Innovation....................................................................................11
10X to 20X LED Performance..................................................................................11
FUTURE OF LIGHTING
WHITE PAPER

4. P a g e | 1 of 11
LED Lighting from Disruptive to Mainstream
The $112 billion global lighting
market is undergoing a rapid
transformation driven by
technological change - and the rules
of the game continue to change
across the industry. The upheaval
stems from two powerful shifts:
1) The move toward light-emitting-
diode (LED) lighting.
2) The growing adoption of
Connected or Smart Lighting
Systems.
These trends, which reinforce one
another, are fundamentally altering
the underlying economics and
dynamics of the market.
In 2015, about 40% of total
U.S. energy consumption was
consumed in residential and
commercial buildings.1
The global lighting market is
undergoing considerable change as
LEDs cut into conventional luminary
sales, with LED market share forecast
to increase from 5% in 2010 to 45%
penetration by 2020.2
LED technology boasts major
advantages over conventional
technologies such as incandescent,
halogen, and compact-fluorescent-
lamp (CFL) lighting.
First, LED is currently four to five
times more energy-efficient than
conventional technologies and is
expected to become even more
efficient - a critical edge considering
that more than 50% of the total cost
of lighting stems from energy
consumption.
Second, LED is more versatile than
other technologies. LED lights comes
in a wider variety of colours, and are
smaller than those of other
technologies, so LED can be used in
creative new ways.
Third, LED lamps last about 15 years,
roughly four times the life span of CFL
lighting and more than ten times that
of incandescent lights.

5. P a g e | 2 of 11
The Rapid Rise of LED Lighting
Table 1: Total Global LED Lighting Market: Revenue Forecast, 2012-2019 ($millions)
Globally, the LED lighting market
revenues was $40 billion in 2015, and
is forecast to grow to $70 billion by
2020. Although the boom of 2013 –
2014 is over, the forecast for 2016 –
2019 will be an impressive 15%
average compound annual growth
rate (CAGR).3
LED is changing how we light the
world, successfully displacing
traditional illumination sources
across every part of the global
lighting market. Over the next few
years, billions of sockets will be in
play.
In the next few years, the shift toward
LED technology is likely to accelerate.
Although LED technology is still more
expensive than conventional lights,
the price is falling precipitously, owing
to technological advances in
manufacturing and increasing LED
efficiency (fewer LEDs are required
for a similar amount of light output).
The average price of a LED light
source is forecast to drop from more
than $6 in 2014 to less than $3 in
2020.
$16,939
$23,936
$32,285
$40,070
$47,303
$54,361
$61,854
$70,10041%
35%
24%
18%
15%
14%
13%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
2012 2013 2014 2015 2016 2017 2018 2019
Source: Frost & Sullivan
2016 -2019
CAGR 15%
Revenue($millions)
GrowthRate(%)

6. P a g e | 3 of 11
In Europe, during the 2016 - 2019
period, residential will be the biggest
sector at 36% of total revenues and
an average annual growth rate of
14%.
Architectural applications pioneered
LED adoption, but its revenue share
will decline over the forecast period.
During the forecast period, the fastest
growth is expected to be the
commercial and industrial sectors,
which are expected to have a
combined growth rate of 75% per
annum and combined revenues
market share of 34%.
LED penetration rate is still low, with a lamp penetration
rate below 10% in 2015.
Fig. 2: European LED Lighting Revenue Share 2016-2019
Fig. 2: European LED Lighting Growth Rates 2016-2019 Table 2: European LED Lighting Forecast 2016 – 2019
Source: Frost & Sullivan
Market Share
Revenue
Market Share
Growth
Revenue ($ millions)

7. P a g e | 4 of 11
What’s Driving the LED Lighting Market?
The global demand for artificial light
is expected to be 60% higher by 2030.
Governments are aware of this
increased need and plan to use LED
as the leading technology to satisfy
demand.
Supportive regulations and legislation
are driving the phasing out of older,
inefficient technologies.
Initiatives such as the rebates offered
by utilities in the United States and
Europe has also helped drive the
market.
The EU Energy Efficiency Obligation
Scheme (EEOS) rebates of up to 30%
on LED retrofit installations continues
to be a significant incentive.
Table 3: Total LED Lighting Market: Pricing Trend by Lighting Technology
LED prices are continuing to fall very
quickly, especially in general lighting.
Some products' average selling
prices were cut in half in 2015, due to
intensifying competition.
Whereas, incandescent lights
dominate residential sector (77%),
high intensity discharge (HID) and
linear fluorescent lights dominate
the commercial (88%), industrial
(99%) and outdoor sectors (92%).
The U.S DOE says that ‘far and away,
two categories of products - linear
and low/high bay lighting - have the
greatest overnight potential for
energy savings.’4
$0
$2
$4
$6
$8
$10
$12
$14
$16
2012 2013 2014 2015 2016 2017 2018 2019
AVERGAEPRICEPERLAMP
LED HID Fluorescent CFL Expon. (LED)
Source: Frost & Sullivan
LED pricing
parity with HID

8. P a g e | 5 of 11
The Shift to Connected Smart Lighting
Although switching to LED lighting
alone results in 40-60% energy
savings, it is still not sufficient to meet
global targets for savings and
sustainability.
Adaptive, smart and interoperable
lighting is essential to bring cost and
performance improvement to a next
level. Enabling LEDs to dynamically
change lighting levels in response to
local conditions, the total system
energy savings can easily reach up to
80% to 90%.
Lighting is an ideal network for
'Internet of Things' (IoT) services to be
built on – because it’s ubiquitous,
wired up and ready to go.
According to Gartner Research by
implementing a combination of: LED
Lighting, Sensors and Controls,
Connectivity, Analytics and
Intelligence you can amplify the
overall savings up to 90% by
delivering functionality of daylight
harvesting, occupancy sensing,
scheduling, task tuning.5
Some
systems can also manage HVAC
control and Demand Response
incentives, which further amplify
energy savings.
The great news is that a wave of next-
generation low-cost, easily deployed
smart lighting and building controls
and services has emerged.
Advanced sensors
collect occupancy,
ambient light,
temperature and
energy consumption
data.
Gateways aggregate
data from individual
sensors and send it
to the Energy
Manager for
analysis.
It monitors and
analyses energy
savings and other
data collected by
the sensor
network.
Smart Analytics
translates data from
the sensor network
into detailed energy,
temperature, and
occupancy insights
The Smart Lighting market is expected to grow to $8.14 billion
by 2020, at a CAGR of 22% between 2015 and 2020.6
Advanced Sensors Energy Manager Smart AnalyticsWireless Gateway
Typical Advanced Lighting System

9. P a g e | 6 of 11
It’s not just Lighting
Today’s lighting control systems
feature numerous options, including
individual wireless control, occupancy
detection, daylight harvesting,
predictive maintenance, real time
scheduling, human engagement and
asset tracking.
An advanced lighting control system
better responds to users’ needs while
saving money by reducing wasteful
lighting use when enough daylight is
available, dimming lights when
spaces are not occupied, and tuning
lights to specific needs.
Heating, ventilation, and air
conditioning (HVAC) equipment
consumes a substantial portion of
energy in commercial buildings -
roughly 35% to 40% of total building
energy consumption depending on
climate and other factors.7
Some advanced lighting control
systems now include the capability to
remotely and dynamically manage
HVAC systems, to provide heating and
cooling, only when and where it is
needed, and further amplify energy
savings.
This added functionality enables
facility managers to direct cooling or
heating to where occupants are
working, providing for a more
comfortable environment while
simultaneously saving energy.
Additionally, distributed temperature
sensing allows better control over hot
and cold spots in each zone,
improving user comfort and reducing
hot/cold calls.
Energy savings, asset tracking, real time building utilisation,
and security without compromising comfort.

10. P a g e | 7 of 11
Retrofitting Advanced Lighting Controls
In May 2016, the
Lawrence Berkeley
National Laboratory
(CA, U.S.) and the Building Energy
Exchange (NY, U.S.) completed a
Living Lab Demonstration Project,
with building project partners
Goldman Sachs and Bank of America,
to identify the most cost-effective
lighting control systems for retrofits.8
Berkley’s research showed that the
extent of savings and granularity of
control is directly related to the
number of fixtures that are rendered
dimmable and the number of
daylighting and occupancy sensors
installed. Upgrades also allow for
remote operation and integration
with energy management systems.
A lighting system should include the
open standard Digital Addressable
Lighting Interface (DALI), which can
accommodate change and growth,
with upgrades primarily being new
software. Lamps with DALI ballasts
are fully dimmable. DALI can also
detect lamp and ballast failures on
DALI luminaires and signals failures.
Overall, Berkley’s installed systems
achieved immediate energy savings
that varied between 75% and 79%.9
The Berkeley ‘Living Lab’ results were as follows:
Advanced Controls LED Fixtures & Lamps Daylighting






One Bryant ar
Bank of
West

11. P a g e | 8 of 11
Look no Wires
With explosive interest in the Internet
of Things (IoT), many enterprises are
focusing on wireless connectivity
options.
Wireless lighting controls eliminate
wiring from switches, sensors, and
gateways, while providing a high-level
of system security via encryption.
Though hardware costs are similar, a
wireless network reduces both
disruption and installation costs,
while retaining features and reliability
similar to fully wired systems.
Traditional automated building
controls systems are wired. Today’s
wireless systems provide a full
spectrum of features in a secure,
cost-effective package and connects
all components with greater
flexibility.
Wireless lighting controls eliminate
wiring from switches, sensors, and
gateways, while providing a high-level
of system security via encryption.
Wireless networks reduce the
installation time by up to 70%,
resulting in less cost and disruption,
in new construction and retrofit
applications.
Todays, Smart Lighting solutions
implement robust, self-healing
wireless mesh networking, which is
less expensive than traditional
networks.
Mesh networks enable scalability, as
each node maintains multiple
connectivity and allows for multiple
paths, with many nodes using the
same access point
A wireless network is a simple and secure way to quickly
implement an energy efficient lighting retrofit.

12. P a g e | 9 of 11
Lighting as a Service – a Zero Hassle Strategy
There is an increasing focus on the
total cost of ownership (TCO) of
lighting, which includes the initial cost
of lamps and luminaires, but also the
operational expense of maintaining
and replacing lamps and energy
costs.
Lighting as a Service (LaaS) is a
service delivery model whereby the
lighting service is charged on a
subscription basis.
The LaaS business model has
emerged in commercial installations
of LED lighting, specifically in
retrofitting buildings and outdoor
facilities, with the aim of eliminating
upfront capital expenditure costs and
facilitating the roll-out of energy
efficiency measures.
Third-party management of a lighting
system generally includes lighting
design, installation, maintenance,
financial, and even include the
recycling or disposal of spent lighting
fixtures.
LaaS has opened up new ways for
organisations to access lighting
upgrades without having to come up
the initial capital or taking on
additional debt or risk.
An Efficiency Services Agreement
(ESA) creates pay-for-performance
energy efficiency financing for the
upgrade with no upfront cost.
Through the ESA, the LaaS provider
pays for 100% of development,
construction and maintenance costs.
After a project is operational,
customers take a portion of the
realised savings from reduced energy
consumption to make service
payments to the LaaS provider.
The ESA is analogous to power
purchase agreements (PPAs) which
have been utilised to finance wind
and solar projects. However, ESA
service payments are based on actual
energy units that are saved (i.e.,
avoided kilowatt hours of electricity).

13. P a g e | 10 of 11
Watts Next?
End of the Light Bulb?
The average LED lamp lasts about 15 years, which is a longer timeframe than the
renovation periods in most application sectors. Thus, a separate and replaceable
lamp is not needed. The LED light source - or module - can be integrated directly
into the luminaire itself, as the entire unit will be replaced before the light source
burns out. Renovation cycles will become more important than technology
lifetimes, and LED longevity will push the market towards LED luminaires.
Towards Human Centric Lighting
Energy efficiency and sustainability
are major drivers for LED lighting and
Intelligent Lighting Systems. Thanks
to developments in solid-state
lighting there now exists a whole new
capability to dim and tune correlated
colour temperature that can really
improve conditions for people.
Light influences how productive we
are at work, how well we learn and
how quickly we recover from illness.
Adjusting the brightness and colour
of the light to mimic natural light
results in healthier lighting.
0 5 10 15 20 25
Road & Street
Sports
Industrial
Office
Residential
Consumer
Architectural
Healthcare
Hospitality
Retail Average
lifetime of
LED Light
Average renovation cycle (years)
Source:BCG2020LightingModel

14. P a g e | 11 of 11
New LED Design Innovation
LED is changing the very nature of
lighting. It’s now possible to work
with light as a material. It can be
scaled, trimmed, bent and positioned
virtually anywhere.
One of the latest innovations is a
skylight that uses nanotechnology to
recreate the physical appearance of
the sky and the sun from a panel
which can be installed on the ceiling
or on a wall. The resulting light is
natural and impressively realistic.
10X to 20X LED Performance
Already, LEDs built from pure gallium
nitride substrates (GaN on GaN) can
exceed typical halogen lamp
performance, using 75% less energy,
last 10 times longer, and offer more
vibrant and natural light.
GaN on GaN LEDs provide amazing
colour rendering, natural looking
whites, and crisp shadows – creating
a light source most comparable to
natural sunlight. Great for
healthcare, hospitality, retail, art
galleries, museums, and other
applications.
In the next few years, GaN on GaN
should be able to enable the current
to be increased by 10 to 20 times and
is on a trajectory to be the most
efficient LED lighting technology by
far.10
www.clarusps.com
Sources:
1
How much energy is consumed in residential and commercial buildings in the United States? IEA
2
How to Win in a Transforming Lighting Industry, The Boston Consulting Group, November 2015
3
Light as a Service, Triad of Ubiquity, Market Disruptions, and New Business Models, Frost & Sullivan, June 2016
4
Adoption of Light-Emitting Diodes in Common Lighting Applications, U.S. DOE, July 2015
5
Smart Lighting Has the Potential to Reduce Energy Costs by 90 Percent, July 2015
6
Smart Lighting Market by Connectivity Technologies - Global Forecast to 2020, Markets and Markets, August 2015
7
Energy-Efficient HVAC Systems for Commercial Buildings, Navigant Research, 3Q 2015
8
Lighting the Future Takeaways, Lawrence Berkeley National Laboratory & Building Energy Exchange, Dec. 2015
9
Lighting the Future Project Results, Lawrence Berkeley National Laboratory & Building Energy Exchange, Dec. 2015
10
Blue LED inventor Shuji Nakamura speaks about the future of lighting, LuxLive 2013