LED lighting is a rapidly growing sector, representing a threat to more traditional products.  Product development in the LED market will continue to offer this sector greater differentiation and result in increasing share in the medium to longer term.

In 2011, the LED lighting market was estimated to be worth around £105 million at manufacturers’ selling prices (MSP).  This is a developing market and is largely reliant on new installations and this is resulting in rapid growth.  The LED lighting market is expected to continue to see rapid growth as the technology becomes more widely accepted in the mainstream. In the long term, price decreases may impact on value but in the next 5 years, increased sales volumes should outweigh this issue.  Trading remains positive for the LED lighting market, with higher volumes of housing required and increasingly sophisticated, sustainable, efficient task-orientated lighting being used across all markets.

Energy efficiency continues to play an important role in the market, driven by legislative changes and increasing fuel bills.  The government remains committed to promoting the use of energy efficient products, promoting use within public sector projects and through the introduction of energy conservation and monitoring legislation.

The non domestic sector dominates the market by value. This sector has been quicker to take up LED technology as it is more focused on long term running costs, whilst domestic users are likely to be put off by the initial cost.

In 2011, the LED lighting market was dominated by sales of luminaires, which accounted for 90% of the market, with replacement lamps accounting for a further 8% and lighting controls the remaining 2%. Many current LED luminaires and modules are integrated.  These products are not easily replaced as they require mechanical fasteners to couple the LED to the heat sink.  This is changing as more replacement lamps and modules are being brought onto the market but means the traditional product split is becoming more difficult to define.

The supply of LED lighting is relatively fragmented, although the leading 5 companies are thought to account for 90% of current market value. Distribution is dominated by direct sales as manfacturers continue to introduce the technology to ever widening applications.