Governments’ Energy Efficiency Initiatives Driving Grow Lights Market
The growing initiatives by governments to promote the usage of LED lights are expected to aid the grow lights market advance in the forecast period. Governments and several international agencies are increasing their focus on reducing energy consumption, by encouraging the shift to LED lighting through numerous legislations and subsidies. Countries such as South Korea, Switzerland, Malaysia, Brazil, Venezuela, Australia, Russia, Argentina, and Canada are already witnessing the phasing out of incandescent light bulbs and their substitution with LEDs.
Furthermore, initiatives such as the legalization of cannabis production in the U.S. are creating lucrative opportunities for the players in the market. Over the years, cannabis production has become a profitable option for farmers in the U.S. due to the soaring demand for marijuana for medical and recreational production. Farmers are carrying out indoor cultivation of cannabis either via vertical farming or hydroponics. Since vertical farms are deploying grow lights on a wide scale, the increasing production of cannabis in the U.S. is widening the growth opportunities for the players.
The grow lights market is observing the trend of vertical farming in urban areas. Vertical farming requires the usage of lighting systems to stimulate the growth of the plants. In this kind of farming technique, plants are stacked in vertical layers, for space optimization. Vertical farms use control systems to maximize the cultivation conditions, and they are designed to allow for the cultivation of higher volumes of crop in less space. Indoor vertical farming also curtails the application of toxic chemicals for pest control, thereby improving the quality and nutritional value of crops.
The categories under the technology segment of the grow lights market include fluorescent, light-emitting diode (LED), high-density discharge (HID), and others, which include induction and plasma. Of these, the LED category held the largest market share in 2016 due to the growing support from the government for LED lights across the world and increasing adoption of energy-efficient and low-cost grow lights. Moreover, the rapid urbanization in the Asia-Pacific (APAC) region is fueling the demand for LED grow lights for indoor farming owing to a reduction in arable land area.
Geographically, Europe is expected to generate the highest revenue in the grow lights market till 2023. In the continent, Scandinavia, Germany, the Netherlands, and the U.K. are emerging as the major users of grow lights. The Asia-Pacific (APAC) market is projected to display the highest growth rate in the foreseeable future. This can be ascribed to the increasing focus on modern farming techniques and swelling population in the region. Here, Australia, Japan, China, and Singapore are emerging as the frontrunners in grow light usage for various types of indoor farming.
Thus, the growing popularity of indoor vertical farming and rising government initiatives to promote LEDs are boosting the demand for grow lights around the world.