The commercial lighting market is projected to reach USD 21.8 billion by 2025 from USD 8.2 billion in 2020; it is expected to grow at a CAGR of 21.5% during the forecast period.

Major drivers for the growth of the market are ongoing and upcoming smart city projects in the developing countries, growing focus of governments worldwide on energy consumption, increasing acceptance of standard protocols for lighting control systems, escalating demand for LED lights and luminaires for use in outdoor applications, and surging use of integrated lighting control systems. Rapid transition from traditional lighting to connected lighting solutions and increased adoption of PoE-based and solar lighting system are major opportunities for the commercial smart lighting market.

The market for services is expected to grow at the highest rate during the forecast period due to the rising adoption of smart lighting solutions and lighting services to reduce energy cost and achieve energy conservation and ecological safety. The growth of the market for services is also attributed to the high demand for engineering, consulting, and analytical services from end users of smart lighting solutions.

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The retrofit installations segment is expected to register a higher CAGR during the forecast period. The rate of energy conservation is projected to increase owing to the rising number of retrofitting initiatives undertaken by government and private organizations in the US. Retrofit lighting is often considered a ‘low-hanging fruit’ that instantly and easily helps achieve significant reductions in energy usage.

The wireless segment is expected to witness a higher CAGR during the forecast period. The use of wireless technology eliminates the need for wires, reduces the maintenance cost, and provides convenience to indoor and outdoor applications. Hence, wireless technology-based lighting solutions are likely to be adopted at a higher rate in the coming years. Wireless technology is also expected to become the mainstream control technology in the near future owing to the ongoing developments and increasing adoption of the technology in indoor professional lighting and commercial verticals.

The market for outdoor applications is expected to grow at a higher CAGR during the forecast period. This growth is mainly due to increasing focus on enhancing connectivity by constructing roads and installing smart lights on these roads, especially in key countries such as the US, the UK, Canada, India, and China.

The commercial smart lighting market in APAC is expected to grow at the highest CAGR during the forecast period. This growth can be attributed to the rapid infrastructure development activities being undertaken in APAC, mainly in China, where smart lighting solutions pave the way for the modernization of infrastructure. Projects related to infrastructure modernization and development, such as smart cities, across the region would also drive the demand for smart street lights, thereby propelling the growth of the market for commercial smart lighting in this region.

Several initiatives have been taken by various governments in APAC countries to improve the infrastructure, which is driving the growth of the commercial smart lighting market. Industries present in this region are focusing on the modernization of their infrastructure. This is further likely to create opportunities for smart lighting vendors in this region. The demand for smart lighting systems for commercial applications is majorly driven by emerging countries such as China, India, and Japan.