Annual revenues from smart street lighting will grow at a compound annual growth rate of 31%, reaching US$1.7 billion in 2026, according to a report by ABI Research.
“Street lighting programs today, and over the next several years, will focus on replacing conventional lamps with LED lamps, says the report. “However, only 20 percent of LED street lamps will be truly ‘smart’ through integration with lighting controls systems. This imbalance will slowly correct itself and by 2026, central management systems will connect to over two-thirds of all new LED street light installations.”
Smart street lighting vendors such as Telensa, Telematics Wireless, DimOnOff, Itron and Signify have been the most successful, thanks to their cost-optimized products, market expertise and aggressive commercial approach.
There are additional opportunities to be had by smart city suppliers. Street poles may be the infrastructure for wireless connectivity, environmental sensors or even intelligent cameras. “The challenge is finding a feasible business model that encourages deployment of multi-sensor solutions,” said Adarsh Krishnan, Principal Analyst at ABI Research.
Smart street lighting were deployed for four main purposes. In order of priority, they are remote scheduling of dimming profiles based on seasonal changes, time shifts or special social events; metering individual street light energy consumption for accurate usage-based billing; asset management to improve maintenance planning; and finally, sensor-based adaptive lighting.
North America leads now
Regionally, street lighting deployments are unique in their vendor and technology approach, as well as end-market requirements.
In 2018, North America has been a leader in smart street lighting accounting for 31 percent of the global install base, followed by Europe and the Asia Pacific.
“In Europe, non-cellular LPWA network technologies have a dominant share of smart streetlights today but will cede some market share to cellular LPWA network technologies, especially as NB-IoT based end-devices become more commercially available in the second quarter of 2020,” ABI says.
Low-cost solutions based on cellular LPWA networks followed by non-cellular LPWA networks will witness the most growth in the APAC region, accounting for a market share of 48 percent and 36 percent, respectively, of the total install base in 2026, says the report.
Asia Pacific as the largest market
By 2026, the Asia Pacific region will have the largest install base of smart streetlights, accounting for over one-third of global installations. This growth is due to China and India, both of which not only have ambitious LED street lamp retrofit programs but also are building LED component manufacturing facilities to lower lamp costs.
In India and China, LED streetlights have seen a very low penetration of lighting control systems due to a nascent domestic solution ecosystem. Also, international vendors are unable to adapt their solutions to meet local market requirements for innovative yet low-cost products, Krishnan pointed out.
The conversion of traditional street light infrastructure to energy-efficient, remotely monitored and controlled smart street lights, has enjoyed considerable growth in the wider smart city market, Juniper Research says.
This is owing to the fact that, essentially, the project pays for itself over a relatively short period, contributing to significant energy savings. Lamp conversion to LED can save up to 50-60%, Juniper Research notes. There is also the benefit of reducing maintenance truck roll, thanks to the ability to monitor where and when the lighting needs repairing.
“For these reasons, it is not surprising that many cities around the world have chosen smart street lighting projects as an initial endeavor to becoming a smart city,” Juniper Research concludes.