Favorable legislation mandating energy conservation increase opportunities for LED manufacturers, the research said.
The North American LED lighting market will get a leg up from supportive legislation, such as the Energy Policy Act of 2005 and Energy Independence and Security Act of 2007, which mandates greater energy efficiency of general service incandescent lamps, Frost & Sullivan noted.
The legislation also hastens the market introduction of efficient and high performing solid-state lighting (SSL) products, including LED lighting.
However, despite the thrust from the government, the higher initial costs of LED lighting products compared to that of competing technologies restrain their adoption. The economic downturn of the last few years has made end users particularly prudent as they demand cost effective systems that also offer energy savings.
Although the operating costs of an LED Â lighting system are low, the capital expenditure of LED lighting products is often prohibitive to end users that do not have a clear vision of the short- to medium-term return on investment from energy savings. The technology will experience wider uptake as ongoing research helps lower costs of production, making LED lighting more affordable.
“The need to conserve energy by upgrading older systems to LED lighting is a key driver for the market,” said Frost & Sullivan Energy and Environment Industry Analyst Alejandra Lozano. “In particular, we find there is higher adoption of energy efficient lighting in the outdoor segment due to government funding for lighting upgrades in exterior applications.”
According to Lozano, educating customers about the lifecycle cost benefits of installing an LED lighting system and demonstrating the energy savings that are achievable with these systems are vital to market success.
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