Grow Lights Market

The grow lights market was valued at USD 2.50 billion in 2016 and is expected to reach USD 5.11 billion by 2022, at a CAGR of 11.86 % during the forecast period. Grow lights can be efficiently used to grow crops and vegetables indoors in any season. However, these crops would require artificial lighting for photosynthesis, which may not be favorable in a particular region due to extreme climatic conditions.

The figure below shows the breakdown of the primaries, on the basis of company type, designation, and region, conducted during the research study.

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Grow Lights Market Dynamics

Growth in indoor farming practices

Indoor farming is not dependent on soil and external climatic conditions; it is a form of plant production in which plants are grown indoors by utilizing artificial light sources such as high pressure sodium lamps (HPS), metal halide, and LED, among others. This allows regular plant growth, without being much affected by environmental factors such as storms and extreme temperatures. In addition, indoor farming enables to keep away plants from insects and pests, thereby reducing the usage of harmful pesticides. Indoor farming first originated in Denmark in 1957, due to lack of sunshine for growing plants. Similarly, such factories were setup in Japan, the U.S., and the Netherlands in the later years.

However, due to the lack of suitable technology to obtain sufficient yield and excessive operating costs, indoor farms have failed to gain popularity. Earlier, indoor farms used HID lamps as the main source of lights for plants, which were high on electricity consumption and heat emission. The development of the LED technology for grow lights is now allowing growers to cultivate plants indoors while keeping the electricity consumption at a minimum level. On the other hand, fluorescent grow light is a cost-effective alternative to LED grow lights; however, their light output is suited for only some types of plants. LED grow lights are proving to be far more beneficial as their light spectrum can be adjusted to suit the plant requirements and can provide higher returns on investment over a longer term.

The need for indoor farming is expected to rise across the world, especially in the urban areas, in the near future. According to the estimates of the United Nations, nearly 80% of the world’s population would be residing in cities and metropolitan regions by 2050. The land available for cultivation would not be sufficient to meet the rising demand of the urban population.

Also, as the distance between cities and farms increases, the logistics costs would drive up the prices for fresh vegetables. To counter all these effects, plants would need to be grown within the confines of the cities. LED grow light manufacturers have started working with commercial growers to setup industrial-scale indoor farms in cities. General Electric (U.S.) is providing LED lighting systems to Mirai, Inc. (Japan) for its plant factory in the Miyagi Prefecture, Japan.

Royal Philips (Netherlands) is working with growers in the Netherlands and Japan for the development of full-scale indoor plant production facilities. Looking at all these developments, indoor farms are expected to increase in number with the rise in urban population. This, in turn, would drive the market for LED grow lights.

High costs of energy-efficient and better quality grow lights

The use of grow lights is increasing with the rising awareness about their benefits. Different sources of artificial lights have been used to grow plants indoor. Earlier, HPS and electric ballasts were widely used for indoor farming, which were effective light sources but power consuming. Nowadays, LEDs are in trend; these grow lights are overcoming the drawbacks of high pressure sodium (HPS), high -intensity discharge (HID) lights, and electric ballasts.

The initial capital required for the purchase of good-quality LED grow lights is higher compared to that of conventional lighting technologies such as FL and HID. This is mainly because each LED grow light unit contains arrays of LEDs, specially designed for horticultural applications. Often, these units contain different types of LEDs with variation in watts and wavelengths to provide a broad range of light spectrum and intensity for different types of plants.

High-powered LED grow lights are available in the market for prices starting from USD 500. A high-quality, full-spectrum LED grow light can be installed as the primary light source for commercial indoor growing and can cost around USD 2,000 or more, depending on the power output and other specifications. A high-powered induction grow light also costs USD 1,300 or more, whereas high-powered plasma grow light costs around USD 3,000.

The costs of these grow lights are higher compared to that of a 1,000 watt HPS light, which costs between USD 100 and USD 150 and provides sufficient light for photosynthesis. This significant price difference is restraining the growers to adopt energy-efficient grow light technologies such as LED, induction lighting, and plasma lighting.

However, advancements in the semiconductor technology and rising awareness about the long-term benefits of LEDs are creating a certain degree of interest in LED grow lights among the growers, especially for indoor applications. The LED grow light manufacturers have also started introducing new products with competitive pricing to encourage more number of growers to adopt this technology.

The objectives of the study of grow lights market report:

• To define, describe, and forecast the grow lights market on the basis of technology, installation, application, and geography
• To describe the spectrums used in grow lights
• To forecast the market size of various segments with regard to four main regions—North America, Europe, Asia-Pacific (APAC), and Rest of the World (RoW)
• To provide detailed information regarding the major factors influencing the growth of the market (drivers, restraints, opportunities, and industry-specific challenges)
• To use the Porter’s five forces model to gauge the entry barriers to this market, along with the analysis of the value chain and market roadmaps to study the evolution
• To strategically analyze the micromarkets with respect to individual growth trends, future prospects, and contributions to the total market
• To analyze the opportunities for stakeholders by identifying high-growth segments in the grow lights market
• To strategically profile key players, comprehensively analyze their market share and core competencies, and detail the competitive landscape of the market
• To analyze the competitive developments such as joint ventures, mergers and acquisitions, new product launches and developments, business expansions, and research and development (R&D) carried out in the grow lights market

This research study involves an extensive usage of secondary sources, directories, and databases (such as Hoovers, Bloomberg BusinessWeek, Factiva, and OneSource) to identify and collect information useful for this technical, market-oriented, and commercial study of the grow light market. To find the overall market size, top-down and bottom-up approaches have been used to estimate the sizes of other individual markets by using percentage splits from secondary sources such as Hoovers, Bloomberg BusinessWeek, Factiva, and OneSource as well as with the help of primary research. The entire procedure includes the study of the annual and financial reports of the top market players and extensive interviews of industry leaders such as CEOs, VPs, directors, and marketing executives for key insights (both qualitative and quantitative) pertaining to the market.

Grow Lights Market Ecosystem:

The grow lights market comprises key manufacturers such as Royal Philips (Netherlands), General Electric Company (U.S.), Osram Licht AG (Germany), Gavita Holland B.V. (Netherlands), LumiGrow, Inc. (U.S.), Heliospectra AB (Sweden), Transcend Lighting Inc. (U.S.), and Sunlight Supply Inc. (U.S.); and raw material suppliers such as Beacon Lighting India (India); end users such as Walters Garden, Inc. (U.S.), Green Sense Farms (U.S.), and Borst Bloembollen B.V. (Netherlands); and suppliers such as Shenzhen Juson Technology Co., Ltd. (China).

Grow Lights market Scope:

Target Audience:

• Grow Light Manufacturers
• Grow Light Panel Technicians and Technologists
• Research Organizations and Consulting Companies
• Associations, Forums, and Alliances Related to Grow Lights Investors

“Study answers several questions for the target audiences, primarily which market segments to focus in the next two to five years for prioritizing the efforts and investments.”

Grow Lights Market Segmentation:

In this report, the overall grow lights market has been segmented on the basis of technology, installation, application, spectrum, and geography.

Grow Lights Market, By Spectrum:

• Partial Spectrum
• Full Spectrum

Grow Lights Market, By Technology:

• High Intensity Discharge
• Fluorescent Lighting
• LED
• Other Technologies

Grow Lights Market, By Installation:

• Retrofit
• New Installation

Grow Lights Market, By Application:

• Vertical Farming
• Indoor Farming
• Commercial Greenhouse
• Turf and Landscaping
• Research
• Others

Grow Lights Market, By Geography:

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • U.K.
  • Germany
  • Netherlands
  • Scandinavia
  • Rest of Europe
• APAC
  • China
  • Japan
  • Australia
  • New Zealand
  • Rest of APAC
• RoW
  • Middle East and Africa
  • South America

Available Customizations

With the given market data, MarketsandMarkets offers customizations according to the company’s specific needs. The following customization options are available for the report.

Company Information

• Detailed analysis and profiling of additional market players (up to 10)

The grow lights market is expected to grow at a CAGR of 11.86 % between 2017 and 2022 to be valued at USD 5.11 billion by 2022.  Grow lights, especially LEDs are used in a wide range of farming-related applications, owing to the advantages they offer such as high reliability, low power consumption, and spectral intensity. The increasing commercial greenhouse and vertical farming practices, which require the use of different grow lights, are driving the growth of the overall market.    

This market is segmented on the basis of technology, installation, application, spectrum, and geography. The applications include vertical farming, indoor farming, commercial greenhouse, turf and landscaping, and research. Among all these applications, commercial greenhouse held the largest market share in 2016.

On the basis of technology, the grow lights market has been segmented into high-intensity discharge (HID), fluorescent lighting (FL), light emitting diode  and other lighting technologies (induction and plasma lighting). Traditional lighting technologies such as high-intensity discharge (HID) and fluorescent lighting (FL) are quite popular among commercial growers as well as hobbyists. LED grow light is a new technology in horticultural lighting and is proving to be far more effective than other lighting technologies. Though LED grow lights are expensive, their long-term benefits in terms of energy efficiency make them an ideal option for indoor plant cultivation.

The market on the basis of installation, has been segmented into retrofit and new installations. The market for retrofit installations is likely to hold a larger market share in the coming years. In the context of the grow lights market, retrofitting is defined as removing an existing grow light and installing a new one, either of the same lighting technology or of a different lighting technology. New installations are generally characterized by the expansion of existing facilities or setting up of a new facility, such as a new greenhouse or a vertical farm.

Europe was the leading market for grow lights in 2016. Within Europe, the Netherlands is a leading exporter of horticultural produce, grown within its numerous automated commercial greenhouses. The concept of vertical farming is also gaining popularity in Europe. The rising population in Europe is a major driver for the increasing need to practice indoor horticulture in this region. Also, the severe cold in winters and insufficient sunlight in parts of Europe mandates indoor growing with the help of artificial lightings. North America was the second major market for grow lights in 2016. The emergence of vertical farms and the booming market for cannabis cultivation are driving the demand for grow lights in this region.

The initial capital required for the purchase of good-quality LED grow lights is higher compared to that of conventional lighting technologies such as FL and HID. This is mainly because each LED grow light unit contains arrays of LEDs, specially designed for horticultural applications. Often, these units contain different types of LEDs with variation in watts and wavelengths to provide a broad range of light spectrum and intensity for different types of plants. High-powered LED grow lights are available in the market for prices starting from USD 500. A high-powered induction grow light also costs USD 1,300 or more, whereas high-powered plasma grow light costs around USD 3,000. The costs of these grow lights are higher compared to that of a 1,000 watt HPS light, which costs between USD 100 and USD 150 and provides sufficient light for photosynthesis. This significant price difference is restraining the growers to adopt energy-efficient grow light technologies such as LED, induction lighting, and plasma lighting.

Royal Philips (Netherlands) holds a leading position in the grow lights market and is a recognized brand in the lighting and illumination business; it offers a diversified product portfolio for horticultural applications. The company has developed innovative products to cater to the horticultural lighting markets by combining its expertise in lighting technologies with inputs from plant psychologists. Its products come in a variety of shapes, with a range of lumen outputs, which are offered at various price points to suit a wide range of growers from hobbyists to commercial growers. The company mainly focuses on partnering and collaborating with other companies to grow in the LED grow lights market. For instance, Philips partnered with Dummen Orange (Netherlands) in 2016. This partnership is expected to benefit both the companies to exchange information as well as conduct experiments to understand the effects of LED Lighting on a variety of red roses and other crops. Philips offers its horticultural lighting solutions in all the major markets across the world with the help of its global distribution and servicing capabilities.

Commercial greenhouses and vertical farming are expected to be the two major application areas for grow lights during the forecast period

Commercial greenhouses have witnessed increased automation in the last decade, and the concept of controlled environment agriculture (CEA) is being implemented in the greenhouses to maintain optimum growing conditions and obtain a higher yield. The growers are gradually realizing the potential benefits of cultivating plants inside a greenhouse; this has contributed to the development of commercial greenhouses. LED grow lights can be easily programmed and integrated into the CEA setup within a greenhouse. Hence, growers with greater investment capabilities have started shifting toward LED grow lights from conventional lighting systems

Indoor Farming

The ever-growing population in the world is generating additional demand for food. The food production is not met adequately through indoor farming due to the changing climatic conditions. However, the technological advancements in grow lights are helping indoor farming to efficiently increase the crop yield. Grow light systems are installed as a primary source of light for indoor farming, as natural light is insufficient or completely absent.

Vertical Farming

Vertical farming is changing the outlook of food production. The increased use of LED grow lights is encouraging the cultivators to adopt vertical farming on a large scale. In vertical farming, plants are stacked in layers one above the other which helps in utilization of maximum space available. The consumers’ demand for high quality, locally developed food free from pesticide and other harmful chemicals is increasing. Many places in the world are facing space constraints owing to the said concerns, and the food prices are also high at these places. However, with the use of vertical farming methods, the yield can be produced even at a square foot area. It helps in harvesting a variety of crops for whole year in spite of the changing climatic conditions.

Commercial Greenhouse

Commercial greenhouses are constructed to practice horticulture in a protected environment to ensure an optimum yield. Greenhouses are designed in such a way that they can trap the natural sunlight and humidity and retain it, which makes it conducive to grow various types of plants. The plants can be grown either by using soil as a base or by using hydroponic technique. Plants grown in greenhouses are protected from external dirt, and with proper care, they can be protected from insects and pests as well. It helps obtain a greater yield in greenhouses and achieve profitability.
Turf and Landscaping

Turf and landscaping are mainly needed at golf courses, sports pitches, gardens, and other recreational amenities. In this application, grow lights are utilized to ensure uniformity in terms of plant growth, color, and shape of the leaves or grass. Even in malls, shopping complexes, parking lots, and residential and commercial buildings, grow lights can be used to stimulate the growth of ornamental plants. Grow light sources emit light with a uniform intensity within its coverage area, which is low on power consumption and is well-suited for landscaping application, especially for ornamental purposes

Key players in the market include Royal Philips (Netherlands), General Electric Company (U.S.), Osram Licht AG (Germany), Gavita Holland B.V. (Netherlands), LumiGrow, Inc. (U.S.), Heliospectra AB (Sweden), Transcend Lighting Inc. (U.S.), and Sunlight Supply Inc. (U.S.); and raw material suppliers such as Beacon Lighting India (India); end users such as Walters Garden, Inc. (U.S.), Green Sense Farms (U.S.), and Borst Bloembollen B.V. (Netherlands); and suppliers such as Shenzhen Juson Technology Co., Ltd. (China).

Critical questions the report answers:

• Where will all these developments take the industry in the mid to long term?
• What are the high growth applications for grow light market?

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