In the green energy sector, solar, wind, and lithium batteries prices all plummeted, which has disrupted markets and transformed existing market orders, leading to new developments.
Goldman Sachs published 60 charts related to low carbon economy in late August 2016, calling the LED industry as one of “the fastest technology shifts in human history.” Plummeting wind and solar energy prices were projected to greatly impact the energy sector, but only a few developed countries have adopted the technology on a large scale. In general, solar and wind energy has not upended the traditional electricity power sector at the same rate as LEDs replacement of traditional light sources. LED market shares was close to zero in 2010, but has substituted other lighting industries with its rapid market share grabs over the past few years. By 2020, LED luminaire sales will reach 69%, and by 2025 reach nearly 95%.
Observations of LEDs long term price trends indicate plummeting prices have boosted LED market penetration, transforming it into a mainstream light source. LEDs could have relied on heavy government subsidies, similar to other renewable energy, but it has become price competitive in a short period that it has overtaken incandescent bulbs and compact fluorescent bulb (CFL) prices, reported TechNews. GE Lighting even announced it will be exiting CFL sector by February 2016.
Goldman Sachs also forecasted many other large manufacturers will follow in GE’s footsteps and terminate CFL manufacturing. Since LEDs are based on semiconductor technology it has progressed at a rate much faster than traditional lighting technology for lumen per watt, or light generated for every unit of electricity, which is expected to grow exponentially by 2025. This has made LEDs far more energy efficient, and more competitive in the green energy market sector after integrating the lighting into independent micro grids and other power applications.
LEDs are not only competitive lighting products that are market disruptive, it has also affected the traditional upstream and downstream distribution. Traditionally vertically integrated lighting manufacturers had the largest market shares, but in the LED lighting sector large number of innovative mid-sized companies are overtaking the market, and increasingly focused on the downstream sector. In traditional lighting markets, the top four leading manufacturers have nearly an 81% market share, and the next 100 enterprises divide the remaining 19% market share. However, in the LED industry the top four manufacturers only have a 16% market share, while the remaining top 100 companies about 52%, and those outside the top 100 mark less than 32%.
The LED industry has propelled huge market changes, the LED luminaire industry is projected to create nearly 2 million job opportunities. Moreover, LEDs have not only affected the lighting sector, it has also been used widely in LED lighting. Many smart buildings and IoT technologies intend to use LEDs as the backbone for connecting nodes, and its energy efficiency will give LEDs more important roles in smart homes, smart buildings, and smart cities.