Growth in the UK Energy Efficient Lighting market has been buoyant over the review period, in contrast with the greater UK lighting market which has seen demand decline in 2008 and 2009. This is the result of a combination of legislation, public information campaigns and a high level of subsidisation (particularly in the domestic sector) which has largely offset the general economic decline and resultant slowdown in housebuilding and construction activity. Growth peaked in 2008, at 16%, and is expected to reach 10% this year (2010), taking the value of the market to £574 million by year end. 

The market for energy efficient lighting comprises lamps or bulbs, luminaires and lighting controls, and in 2009 accounted for 36%, in value terms, of the greater UK Lighting Market, up from just 21% in 2005.

Some of the most notable trends in the market include:

-  Energy efficient lamps can now be fitted to most standard luminaires, and growth in the luminaires and controls sector is thus increasingly mirroring growth in the lamps sector – a trend likely to become even more noticeable as technology advances.
-  A high level of innovation; particularly in terms of ultra efficient lighting – a key current and future growth area.
-  An extremely price-competitive market which – in combination with a stronger Euro – has increased pressure on margins.
-  Greater focus on providing design-led solutions that address specific problems rather than rather than just producing more energy-efficient products.
-  Subsidies and schemes – which help to drive uptake.
-  Focus on whole life costs rather than just initial capital costs, particularly in the non-domestic sector.
-  A high level of imports.

The value of the UK energy efficient lighting market is expected to reach £969 million in 2014, and the rate of growth – which began to slow slightly in 2009 will remain buoyant over the review period. This is – of course – dependent on how soon economic recovery makes itself felt on activity and output in the housebuilding and commercial construction markets, as well as the underlying and substantial shift into energy efficient lighting products, away from the ‘standard’ lighting alternatives.

Given the projected decline in use of non-energy efficient lighting solutions, largely the result of progressive legislation currently already in place, we expect that the share of energy efficient lighting in the overall UK lighting market – 36% in 2009 – will reach 63% by 2014.  Due to the difficulties in establishing agreed data or viewpoints for the energy efficient halogen sector, we have excluded tungsten halogen from our analysis, but assuming the bulk of tungsten halogen becomes energy efficient by 2014, then the share taken by energy efficient products would be closer to 95% of the overall market at that time.

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