Conventional lighting put in the shade by LED boom

Lighting companies are seeing an explosion in the light-emitting diode (LED) market in India with growing investment by the government in energy-efficient light systems, falling prices and a worldwide mandate to arrest global warming. Over the last one year, companies have seen growing business in the commercial segment of the market. They say that there is a strong pipeline of orders as the government, SEZs, private builders, hotels and other industries show interest in LED technology and choose it over conventional lighting, such as incandescent bulbs and CFLs, for replacing their old systems.

LEDs, which are powered by semi-conductor chips, are much less energy guzzling than conventional lights: an LED bulb utilises around 10 watts of energy and is 10 times less space consuming than an incandescent bulb, which utilises up to 100 watts of electricity. It also has a longer life, about 25,000-50,000 hours compared to an incandescent bulb?s 1,000 hours. Philips, Bajaj Electricals, Wipro, Havells, and Lighting Science Group, among other players, have made a beeline to woo Indian businesses and the government, launching many LED products over the last 12 months.

Companies including Japanese multi-national Panasonic are strategising to make an entry into the Indian market soon.

?In less than a year, we have sold 10,000 LED street lights. We have an equivalent number in the pipeline,? said Indranil Goswami, director, Lighting Application Services at Philips Electronics India. ?Many application areas are opening up. The acceptance of street lighting is very high.

The interest from both government and private players is being converted into acceptance,? he added.

Arun Narayan, managing director, Lighting Science Group India, noted that the pipelines of LED orders are getting better. ?People are asking for LED products, especially in all-new construction projects, both commercial and high-end residential. Use by government is in the trial phase and as soon as the specifications are ready, large-scale procurement will begin,? he said.

Wipro launched its first LED product four years back, but larger migration from conventional lighting has happened in the last one year, said Parag Kulkarni, head of the Commercial Lighting and Furniture Business at Wipro. The firm has introduced over 20 LED products in the last one year.

?There is a faster migration happening. Customers may not come pre-decided since the market is at an early stage. However, vendors give them options and certainly promote LED. Q-o-q, growth is crossing 50% for us,? Kulkarni said.

The confidence of LED players has been corroborated by a study from research firm Frost and Sullivan that says that LED lamps and luminaires exhibit strongest growth trends among all lighting technologies in the country. The market grew 46% to $73 million in 2010 and, by 2015, could be worth $400 million.

Currently, LEDs are 3-5 times more expensive than conventional sources of lighting. However, firms expect a tipping point between 2012 and 2015 ? Philips, for instance, says that the amount of light per LED is growing 20 times every decade, while the cost has been going down 10 times per decade.

The LED lighting market in India contributes 3.7% of India?s overall lighting market revenues of more than a billion dollars. That pie could significantly increase in the coming years and even cannibalise other product groups. Although street lighting appears to have gained more traction than any other product category ? it could account for half of LED market revenues in 2012 ? firms have started strategising around other categories as well. R Sundararajan, executive VP and head, Luminaires BU, at Bajaj Electricals, noted that customers are currently more comfortable using LEDs for outdoors. ?However, we don?t want to miss the bus in indoor segment. So, we are developing applications for green buildings. In the indoor space, the demand will pick up over the next 3-4 years? time,? he said.

Besides outdoors, Havells India is focusing on indoor and consumer lighting that includes residential applications and professional applications for office, hospitality, shop, and industrial customers. Panasonic in India is planning to leverage the capabilities of Anchor Electricals, which it acquired in 2007 for over $420 million, to introduce LED products across all segments.

Some firms are introducing consumer home products though traction in this segment is marginal owing to costs. An LED bulb for home could cost between R650 and R1,200. If growing volumes and technology innovations can bring down prices faster, India can make a speedier switch to LEDs. That would save a lot of energy bills.