GROW LIGHTS MARKET ANALYSIS

The global grow lights market size was valued at US$ 3,119.9 million in 2021 and is anticipated to witness a compound annual growth rate (CAGR) of 21.0% from 2022 to 2030. With the rise in demand for energy efficient lights, the grow light market is expected to witness a robust growth. The global LED grow lights market is expected to see lucrative growth over the next few years. This is due to the fact that LEDs can reduce power consumption, thus reducing the cost associated with lighting. Rising urban cultivation will also boost the market in the coming years.

Global Grow Lights Market: Regional Insights

North America among regions is anticipated to gain a major share in the global grow lights market over the forecast period. The primary factors responsible for the growth of this region in the market is rise in demand for nutritious food, and growing trend of rooftop farming operations in urban regions. For instance, there are more than 20,000 natural food stores available in the U.S. and 3 out of 4 traditional grocery stores are offering organic products. As per the Organic Trade Association, the complete organic sales was 5.8% of the total food sales, and it registered a growth value of 4.6%. Thus, these factors are expected to drive growth of the global grow lights market over the forecast period.

Along with this, Asia Pacific is also anticipated to witness substantial growth in the global grow lights market over the forecast period. This growth is due to rapidly increasing urban agriculture, such as green houses, vertical farming, and growth chambers, creating strong demand for grow lights across the region. Countries such as Taiwan, China, and Japan are the major contributor to the grow lights market in Asia Pacific. Due to high technological developments in urban farming technologies, the demand for grow lights is high in these countries. Thus, Asia Pacific is anticipated to show high growth rate in the market over the forecast future.

Figure.1: Global Grow Lights Market Share (%), By Region,2021

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Global Grow Lights Market Drivers:

Growing adoption of indoor farming practices to fuel the market pace

In recent times, there has been a substantial growth investment in innovation technology of food and agriculture sector. This is owing to the rise in difficulties in the cultivation of crops in natural conditions resulting from changes in climatic conditions. As per the Union Bank of Switzerland, food and agriculture innovation is showing an ascent in capital investor and is likely to become US$ 700 billion market by 2030. Thus, indoor farming practices are increasingly being adopted all over the world, which is expected to support growth of the global grow lights market over the forecast period.

Surge in the number of startups innovating novel technologies to boost the market growth

The number of startups in this space that are involved in innovation of novel technologies for farming is increasing around the world. For instance, Bowery Farming raised US$ 140 million since its start in 2015, and it has made its leafy greens available in the U.S. to be bought in whole foods market and foragers. The company claimed that it uses 95% less water compared to conventional farming and it offers it is 100 times more productive. This in turn is promoting the adoption of farming techniques such as indoor farming, which in turn is creating demand for grow lights. Thus, these factors are likely to boost growth of the market in the near future.

Global Grow Lights Market Opportunities:

Penetration of advanced technologies such as IoT, Artificial Intelligence, and robotics in farming technologies is expected to offer business opportunities in the global grow lights market over the forecast period. The number of enterprises using such advanced technologies through approaches such as exploitation of advanced technologies for boosting innovation, revenues by increasing production, and forming new business models. Thus, the market is likely to witness several growth opportunities in the near future.

Furthermore, growing advancements in LED technology is also anticipated to create growth opportunities in the global grow lights market over the forecast period. With the rise in technological developments in LEDs, several issues associated with energy savings are being addressed. Due to its benefits such as reduced energy consumption indoor farming operations are inclining towards use of LED technology from high-pressure sodium lights, as traditional lights produce excess heat. Thus, this factor is creating various opportunities for the grow lights market.

Global Grow Lights Market Trends:

Growing energy demand for powering farming facilities is a recent trend

The demand for energy for powering agricultural facilities is significantly high compared to any other methods of food production. It is likely to increase the consumption of energy significantly all over the world in the coming years. In such scenarios, the adoption of microgrids as a possible solutions is increasing in modern day agricultural activities to overcome this challenge. This in turn is expected to create demand for grow lights, due to their various benefits, mainly of reduced power consumption. This trend is anticipated to continue in the global grow lights market during the forecast period.

Cannabis legalization across various regions is a growing trend

Due to growing legalization across different countries, the cannabis cultivation has increased significantly, which is creating need for greenhouses and vertical farming. This further is driving the demand for LED-based grow lights, as growing cannabis under sunless medium requires considering different factors. For instance, the product can be damaged due to the heat emitted from HPS lights. Thus, LEDs that can function at lower temperatures are used for overcoming this excessive heat issue. Thus, these factors are expected to fuel growth of the global grow lights market in the near future.

Global Grow Lights Market Restraints:

Changing lighting needs for different crops to hamper the market pace

Different crops cultivated in the modern agricultural setup need different grow light spectrum. Grow light spectrum is electromagnetic wavelengths of light generate by a source for promoting growth of a plant. For photosynthesis process, plants use light in the active photosynthetic radiation region of wavelengths that are measure in nanometers. Based on the species of crop, and environmental conditions, the light spectrum affects growth of the plant in different ways. Such changes in the use of lighting technologies in the setup can add into the cost of solutions. This in turn is expected to restrain growth of the global grow lights market over the forecast period. However, advent of LED-based grow light solutions is likely to drive growth of the market in the near future.  

High cost of setup and maintenance to impede the market growth

The upfront cost required for designing and establishing the facility of indoor farming methods such as vertical farming, greenhouse among others is high. Along with this, the ROI of the cost requires high maturity as well as it depends on profits in the future. Lighting technology plays an important role in the indoor farming and it is still being progressed. The cost of setting up lighting technology for these farming facilities is high and the maintenance of these systems also requires high cost. These factors hence, affect the adoption of grow light technology, which in turn is anticipated to restrain growth of the global grow lights market over the forecast period.

Figure.2: Global Grow Lights Market Share (%), By Application, 2021

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Global Grow Lights Market Segmentation:

The global grow lights market report is segmented into Light Source, Installation Type, and Application

Based on Light Source, the market is segmented into High-intensity Discharge (HID) Lights, Light Emitting Diodes, Fluorescent Lights, and Other Light Sources. Out of which, High-intensity Discharge (HID) Lights is expected to dominate the global market over the forecast period and this is attributed to the growing cultivation of plants needing higher light intensities such as citrus, forage, cereal, and C4 plants. These HID lights utilized for controlling environments such as indoor farming and laboratories. Thus, various benefits of these HID lights is driving growth of the segment.

Light Emitting Diodes segment is also expected to witness significant growth in the near future and this is owing to the various benefits such as reduced energy consumption of LED grow lights. The use of LED grow lights is a modern and efficient way of producing lights for growing plants. They come various shapes and sizes, and offer significant advantages. Due to this demand for these LED-based grow lights is considerably high in the market, which is likely to support growth of this segment in the near future.

Based on Installation Type, the market is segmented into New Installations, and Retrofit Installations. Out of which, New Installations is expected to dominate the global market over the forecast period and this is attributed to the rise in demand for fresh horticultural produce as a result of growing population. This is encouraging growers to expand their production facilities and to set up new greenhouse facilities for cultivating higher yield each year. Thus, the segment is expected to witness strong growth in the near future.

Retrofit Installations segment is also expected to witness significant growth in the near future and this is owing to the launch of novel lighting technologies such as plasma, LED offering more options while retrofitting grow light systems. These technologies are increasingly being adopted in retrofitting due to their benefits, which is expected to support growth of this segment in the near future.

Based on Application, the market is segmented into Indoor Farming, Vertical Farming, Commercial Greenhouse, and Other Applications. Out of which, Indoor Farming is expected to dominate the global market over the forecast period and this is attributed to the technological developments in the grow light field and cost-effective gardening solutions. Technological solutions for indoor farming increasingly becoming advanced with growing development in technology. This is driving the demand for grow lights in this sector, and this is expected to drive growth of the segment in the near future.

Commercial Greenhouse segment is also expected to witness significant growth in the near future and this is owing to the rise in adoption of LED grow lights in commercial greenhouses. The use of these lights could offer required lighting spectrum in all the stage of plant growth and along with this it also offers longer operation life and higher energy-efficiency. Thus, this segment is likely to show a strong growth in the market.

Global Grow Lights Market: Key Developments

In January 2020, Signify, announced the extension of its LED Toplighting compact range by introducing a high-efficiency version for reducing running costs or for a high output version for various crops. The solution introduced by the company can be connected to GrowWise Control System and also offers 50% lesser energy consumption.

In July 2020, Savant Systems Inc. announced the acquisition of GE lighting for enhancing the product portfolio for the lighting market. The acquisition is likely to provide both the companies with cost-effective and unique solutions for its customers.

In November 2019, Heliospectra AB, entered into an agreement with Bridge Farm Group for its MITRA LED lighting products. Bridge Farm Group deployed high-intensity MITRA LED lighting solution for fresh herb production and their greenhouse cultivation.

In February 2019, Osram Licht AG, announced the development of a research luminaire for catering the increasing demands of researchers at various private institutes and universities, and plant production in vertical farms and greenhouses.

Global Grow Lights Market: Key Companies Insights

The global grow lights market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis.

Some of the key players in the global grow lights market are Epistar Corporation, Signify, Hydro Grow, Savant Systems Inc., Iwasaki Electric Co. Ltd., Heliospectra AB, Everlight Electronics Co. Ltd., OSRAM Licht AG, LumiGrow Inc., and Illumitex Inc.

*Definition: Grow lights are used to provide indoor plants with the necessary light they need to thrive. They can also accelerate flowering and help maintain plant health. These lights come in many varieties, from LED bulbs to incandescent ones.