KSA Lighting Market Outlook to 2030

KSA Lighting Market Overview

• The KSA lighting market is valued at USD 1.8 billion based on a five-year historical analysis. The market is driven by significant growth in infrastructure development and urbanization projects, especially those aligned with the Saudi Vision 2030 initiative. The increasing emphasis on energy-efficient lighting systems such as LED, smart lighting solutions, and the governments efforts to reduce energy consumption in the public and private sectors are key drivers. Industrialization and residential expansions further support the markets strong demand for advanced lighting systems.

• Riyadh and Jeddah are the dominant cities in the KSA lighting market due to their large-scale infrastructure developments and rapid urbanization. Riyadh, being the capital, hosts major public and private projects, while Jeddah benefits from its commercial and industrial growth as the largest port city. The ongoing smart city initiatives and investment in tourism infrastructure, such as NEOM and the Red Sea Project, further bolster the lighting demand in these regions.
• Under Saudi Arabias Vision 2030, sustainability is a central pillar, with green lighting initiatives forming a key part of the framework. The government is promoting the transition to energy-efficient lighting in public and private sectors as part of its sustainability goals. The target is to reduce electricity consumption in the lighting sector by 20 terawatt-hours annually by 2025. Over 15% of all street lighting in Saudi Arabia has already been replaced with LED systems by 2023, with the rest expected to follow by 2025.

KSA Lighting Market Segmentation

By Product Type: The KSA lighting market is segmented by product type into LED lighting, conventional lighting, smart lighting, and solar lighting. LED lighting holds the dominant market share, driven by its energy efficiency and longer life span compared to conventional lighting solutions. The government's energy-saving policies and the rise in electricity costs are pushing the adoption of LED products, particularly in public infrastructure and commercial sectors. Smart lighting is also gaining traction due to its integration with IoT and automation systems in commercial buildings.

By Application: The KSA lighting market is segmented by application into residential, commercial, industrial, and public infrastructure. The commercial segment leads the market, particularly in the retail and office spaces, driven by the increased adoption of energy-efficient lighting solutions. Additionally, the focus on modern office designs and the rise of new commercial spaces under Saudi Vision 2030 projects, including NEOM, encourage businesses to adopt advanced lighting technologies to meet energy-efficiency goals and sustainability initiatives.

KSA Lighting Market Competitive Landscape

The KSA lighting market is dominated by a mix of local and international players, with the market seeing increasing consolidation through partnerships, acquisitions, and expansions. Key players have a significant presence in both public and private sector projects, with their extensive portfolios of LED and smart lighting products. The competitive landscape is influenced by innovation in lighting technology, government regulations favoring energy-efficient solutions, and ongoing urbanization projects. Companies are focusing on expanding their market share through product launches that cater to smart city initiatives, including intelligent lighting systems with IoT and AI capabilities.

KSA Lighting Industry Analysis

Growth Drivers

• Urbanization: The Kingdom of Saudi Arabia (KSA) has been undergoing rapid urbanization, with the urban population growing from 31 million in 2021 to over 33 million in 2023, according to the World Bank. Major cities like Riyadh, Jeddah, and Dammam are expanding with significant infrastructure projects, including street lighting and public spaces. Saudi Arabias Vision 2030 aims to develop several new cities, such as Neom, which require modern and efficient lighting infrastructure. This urban development has accelerated the demand for energy-efficient lighting solutions, especially in the public sector.
• Industrialization: KSAs industrial sector has seen significant growth, driven by its diversification efforts under Vision 2030. As of 2022, the industrial sector accounted for 24% of the nations GDP, up from 21% in 2020. The push for energy-efficient solutions, such as LED lighting, has become critical in the industrial sector, especially in manufacturing, petrochemicals, and logistics. LED lights are now used in industrial spaces for better energy efficiency and durability, minimizing operational costs and maintenance downtime. This shift is supported by Saudi Arabias plans to reduce energy consumption by 8.8 terawatt-hours annually.
• Government Regulations: Saudi Arabias government has implemented stringent energy efficiency mandates under the Saudi Energy Efficiency Program (SEEP), launched in 2017. The program targets significant reductions in electricity consumption, focusing on the lighting sector, which historically contributed to 20% of national electricity usage. By 2024, the program aims to lower this usage through LED adoption and phase out inefficient lighting technologies. These mandates have already led to a nationwide ban on the import and sale of non-energy-efficient lights, helping the country save an estimated 2.5 gigawatt-hours of energy annually.

Market Challenges

• High Initial Installation Costs: The initial installation costs for smart lighting solutions remain a challenge in KSA. Despite long-term savings, the upfront investment in smart lighting systems can be 30%-50% higher than traditional lighting infrastructure. The cost includes sensors, wireless networks, and software integration, creating a barrier for smaller municipalities and private sector developments. According to the Saudi Arabian Monetary Authority, municipalities have budget constraints that hinder widespread adoption, especially in rural areas. These high costs slow down the pace of implementation, although ongoing government incentives aim to mitigate these challenges.
• Technical Challenges: Wireless connectivity, a backbone for smart lighting, faces technical challenges in certain regions of Saudi Arabia, especially in remote and underdeveloped areas. Reports from the Communications and Information Technology Commission (CITC) highlight that over 25% of rural areas still lack stable 5G connectivity, which is crucial for real-time monitoring and automation of smart lighting systems. Without seamless connectivity, the efficiency of these systems is compromised, leading to intermittent failures or delays in energy-saving responses.

KSA Lighting Market Future Outlook

Over the next five years, the KSA lighting market is expected to show significant growth driven by continuous advancements in LED and smart lighting technologies, increasing demand for energy-efficient solutions, and government-backed infrastructure projects under Vision 2030. With a focus on sustainability and the development of smart cities, the adoption of solar and smart lighting solutions is forecast to rise. As these projects unfold, lighting manufacturers will continue to innovate, creating opportunities for further market expansion.

Opportunities

• Rise in Energy-Efficient Lighting Systems: The adoption of LED lighting in KSA has seen a sharp rise due to government incentives and energy efficiency regulations. By 2023, 65% of lighting in new infrastructure projects utilizes LED technology, compared to just 42% in 2020. With electricity prices rising and growing awareness of sustainability, more households and businesses are transitioning to energy-efficient lighting. The shift to LEDs helps the country meet its goals of reducing electricity consumption by over 10 terawatt-hours annually by 2025.
• Smart Lighting Demand in Residential and Commercial Sectors: The smart lighting market in the residential and commercial sectors is experiencing rapid growth, driven by increased demand for automation and energy management. According to the Saudi General Authority for Statistics, over 1.2 million smart lighting systems were installed in residential and commercial buildings by mid-2023, up from 700,000 in 2021. The demand is especially strong in Riyadh and Jeddah, where real estate developers are incorporating smart lighting as a key feature in high-end projects to enhance energy efficiency and user convenience.