Investigation by Porsche Consulting

Martin Schrüfer,

Experts predict strong growth for Light as a Service

Where is the industrial lighting market heading? A recent study by Porsche Consulting reveals growth potential and opportunities. The Stuttgart-based management consultants analyzed various new studies and also conducted numerous interviews with experts in order to provide a practical basis for the evaluation. The result: the global lighting market is growing, the share of LED technology continues to increase and the LaaS segment is recording the strongest growth rates at over 40% per year.

Installation of LED luminaires from Deutsche Lichtmiete at the Sandkrug site © Deutsche Lichtmiete

The market leader in this segment is the Deutsche Lichtmiete Group, based in Oldenburg, Lower Saxony. In 2018, the company set the course for the future by acquiring the Japanese LED world market leader Nichia Corporation and constructing a new administration and production building. With the launch of Industry 4.0-capable products, the LED luminaire manufacturer is gradually putting its business model on a digital footing by 2020.

Artificial light is no longer just about illumination; aspects such as health and safety in the workplace, service life, power consumption and environmental compatibility also play an important role in the lighting market. According to the latest study carried out by Porsche Consulting on behalf of Deutsche Lichtmiete, the global lighting market is set to grow by 15% per year until 2025. The consultants see energy-efficient LED/OLED lighting systems and smart lighting solutions as the most important market drivers.

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Conversion saves energy and reducesCO2 emissions

When it comes to LED products, the market is currently dominated by the replacement of conventional lighting systems, in particular to save energy consumption and costs. According to dena (German Energy Agency), LED technology can save up to 70% of energy costs. Against the background of the current discussions about climate protection andCO2 tax, there is another significant advantage in favor of retrofitting: less energy consumption means lowerCO2 emissions.

LaaS market growing rapidly

LED technology is not cheap and ties up capital - a major hurdle for many companies and local authorities. And one of the reasons why Light as a Service (LaaS) - the outsourcing of lighting and renting of the finished lighting product - is becoming increasingly popular. Industry experts predict that LaaS will develop into a successful system in the B2B lighting market over the next few years, with annual growth of more than 40%. One company that already has LaaS in its name is Deutsche Lichtmiete from Oldenburg in Lower Saxony. To date, the LED industrial service provider has implemented over 400 projects and is regarded as a pioneer and market leader for LaaS in Germany. "Only around 30% of industrial areas in Germany have been converted, and the majority still have some way to go," says Markus Frank, Head of Sales at Deutsche Lichtmiete, explaining the market potential.

Founder and CEO Alexander Hahn came up with the idea of offering lighting as a rental concept in 2008. Today, the Deutsche Lichtmiete Group employs 101 people at six locations and achieved a turnover of EUR 33.5 million in 2018. The advantage of the rental concept for companies and institutions: They can convert to modern LED lighting without having to invest themselves. They also benefit from the flexible full-service package, which includes installation, maintenance and other services that are already covered in the rental agreement with a fixed rental rate. Last but not least, in-house luminaire production at the Oldenburg and Sandkrug production sites, both in Lower Saxony, is crucial to the success of the business. "This enables us to guarantee high quality standards for our customers," says Alexander Hahn. The digitalization of the business model is already in full swing. All lights are to be Industry 4.0-capable by 2020.

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