U.S. LED Market Outlook to 2030

U.S. LED Market Overview

• The U.S. LED market was valued at USD 13.3 billion, driven by increasing demand for energy-efficient lighting solutions, government support for energy savings, and rising applications across various sectors such as residential, commercial, and industrial. This growth has been supported by the phasing out of traditional lighting technologies, leading to a sharp rise in LED adoption. Innovations in smart lighting and connectivity have also contributed to the expansion of the market.
• In terms of geographical dominance, cities like New York, Los Angeles, and Chicago play a leading role in the U.S. LED market due to their focus on smart city initiatives and large-scale infrastructure projects. These cities, with higher urbanization rates and more progressive policies on sustainability, have accelerated the adoption of LED technologies, contributing significantly to the overall market demand.
• The U.S. Department of Energys Solid-State Lighting (SSL) program has been crucial in advancing the adoption of LED technologies. The program has funded extensive research and development efforts aimed at improving LED efficiency, performance, and affordability. As of 2024, the program has led to the deployment of over 1 million SSL installations in public and private sectors across the country. These efforts contribute to significant energy savings and promote further market growth.

U.S. LED Market Segmentation

The U.S. LED market is segmented by product type and segmented by application.

• By Product Type: The market is segmented by product type into LED bulbs, LED fixtures, LED tubes, and LED modules. Recently, LED bulbs have had a dominant market share due to their widespread application in residential and commercial settings. The affordability and efficiency of LED bulbs have made them the preferred choice for homeowners and businesses looking to reduce energy consumption while improving lighting quality.
• By Application: The market is also segmented by application into residential, commercial, industrial, and public infrastructure. The commercial sector has dominated the U.S. LED market, largely driven by retrofitting of office spaces and public buildings to meet energy efficiency standards. Businesses are increasingly adopting LEDs for long-term cost savings, improved light quality, and environmental benefits, making this segment the most lucrative.

U.S. LED Market Competitive Landscape

The U.S. LED market is highly competitive and consolidated with a mix of global giants and domestic players. The competition is driven by product innovation, energy efficiency, and smart lighting solutions. Key companies are focusing on R&D investments, strategic partnerships, and expanding their presence in new market sectors, such as horticulture lighting and connected lighting solutions.

U.S. LED Industry Analysis

Growth Drivers

• Energy Efficiency and Sustainability: The U.S. LED lighting market is significantly driven by energy efficiency and sustainability goals. LEDs use up to 75% less energy than traditional incandescent lighting, according to the U.S. Department of Energy (DOE). Replacing conventional lighting with LED lighting in public infrastructures can save up to 300 terawatt-hours (TWh) annually. This results in reduced electricity consumption, aligning with the U.S. energy policy aimed at lowering energy dependency on fossil fuels. The adoption of LEDs plays a key role in achieving sustainability goals, making it an attractive solution across both commercial and residential sectors.
• Government Incentives and Regulations: Government incentives and regulations act as powerful drivers for the LED lighting market in the U.S. Federal and state programs like the Energy Efficiency and Conservation Block Grant (EECBG) provide substantial financial support for LED installations. Additionally, the Infrastructure Investment and Jobs Act of 2021 allocates billions for energy-efficient lighting projects across urban and rural areas, further pushing LED adoption. The DOEs regulations ensure that new lighting products meet stringent energy efficiency standards, leading to widespread LED adoption in both public and private sectors.
• Rising Adoption of Smart City Projects: The increasing adoption of smart city initiatives across the U.S. is boosting demand for energy-efficient LED lighting systems. Over 100 cities have already launched smart city projects integrating advanced LED streetlights with IoT systems for enhanced energy savings and real-time data collection. New York City, for example, has retrofitted over 250,000 streetlights with LEDs, contributing to annual savings of over $14 million in energy and maintenance costs. These projects emphasize sustainable urban development, further driving demand for LED technologies.

Market Challenges

• High Initial Setup Costs: One of the primary challenges in the U.S. LED market is the high initial setup cost. While LEDs offer long-term savings, the upfront cost for installation, especially for large commercial projects, remains substantial. A typical LED retrofit for a large commercial building can cost between $150,000 and $500,000, which is prohibitive for some small- to medium-sized enterprises. Though prices for LEDs have declined over the years, the cost of replacing or retrofitting outdated lighting systems still poses a barrier for many sectors, especially in less funded municipalities.
• Complex Retrofits in Existing Infrastructures: Retrofitting older infrastructure with LED systems can be technologically complex and expensive. Many U.S. cities, particularly those with outdated grids or public buildings, find it difficult to integrate new LED technologies without comprehensive infrastructure overhauls. For example, New York City had to allocate additional funds to upgrade electrical systems alongside LED installations, costing millions more than anticipated. This complexity poses a significant hurdle for full-scale implementation, particularly in rural and less economically developed regions.

U.S. LED Market Future Outlook

Over the next few years, the U.S. LED market is expected to experience significant growth, driven by advancements in smart lighting systems, IoT-enabled lighting solutions, and energy-efficient technologies. The market will also be influenced by increasing government regulations aimed at reducing carbon emissions and energy consumption. Further expansion in sectors such as horticulture, healthcare, and public infrastructure will provide new growth opportunities for LED manufacturers.

Future Market Opportunities

• Smart Lighting Solutions & IoT Integration: The integration of smart lighting solutions with IoT represents a significant opportunity in the U.S. LED market. These systems enable real-time monitoring, automated dimming, and energy optimization, which can reduce energy consumption by up to 30%. In 2024, major U.S. cities such as Los Angeles and Chicago have launched smart lighting pilot projects, aiming to upgrade thousands of streetlights to smart, connected systems. Such initiatives create opportunities for expansion in both public and private sectors.
• Expansion in Residential and Commercial Sectors: The LED market is experiencing significant growth in both residential and commercial sectors, driven by increased demand for energy efficiency. In 2024, approximately 60% of U.S. households have already switched to LED lighting, while major commercial real estate projects are incorporating LEDs to meet sustainability goals. Commercial sectors are increasingly investing in LED retrofitting to comply with federal energy regulations, further expanding market opportunities.