Government Policies and Street-Lighting Boost Demand for LED Lighting


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The Indian market for LED lighting has demonstrated a steady growth in last couple of years. Street lighting, and industrial and commercial applications are propelling the market in India today. Government’s support to green technologies, too, has encouraged the adoption of LED lighting in India.


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industry Focus 109 electronics for y ou | December 2014 the indian market for LEd lighting has demonstrated a steady growth in last couple of years. street-lighting and industrial and commercial applications are propelling the market in india today. Government’s support to green technologies too has encouraged the adoption of LEd lighting in india. in this report we look at the LEd industry in depth Government Policies and Street-Lighting Boost Demand for LED Lighting ABHISHEK A. MUTHA be more than 50 per cent to the total lighting industry.” On a similar note Raushan says “LED lighting market in India is esti- mated to cross US 3 billion by 2020 growing approximately at a CAGR of 40 per cent. This will help LED lighting market to account approximately 55 to 60 per cent of the total lighting market in India by 2020.” Energy conservation decreasing cost and commercial applications driving demand The shift toward renewable energy de- mand for energy-effcient products and LED luminaries has increased. Several technology features of LED like long lifespan energy-saving capacity which is more than 50 per cent as compared to compact fuorescent lamp CFL and I ndia is a country where a major chunk of population is still not connected to the power grid. In order to supply power to them In- dia will need to create either newer sources of power or reduce the power demand by implementing energy- effcient devices at all levels. “It has been estimated that in India lighting systems consume 18 per cent of total power consumption which is consid- ered high when compared to other countries where lighting consump- tion is approximately 12 to 14 per cent” informs Pankaj Raushan senior research analyst MarketsandMarkets. Due to this light emitting diode LED has emerged as an important energy- effcient device especially for lighting systems. LED lighting industry growing at CAGR of 40 to 50 per cent For fnancial year 2013-14 the lighting market was estimated by the indus- try to be around ` 20 billion informs Puneet Dhawan senior vice president and head of lighting business Orient Electric. He says “The percentage contribution from LED industry to the total lighting industry is hardly 14 to 15 per cent.” He adds “For the past two years LED industry has been growing at a compound annual growth rate CAGR of 45 to 50 per cent and will continue to grow at that rate for the next three to four years. The pre- diction is that four years from now contribution from LED industry will LED commercial lighting LED street-lighting

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industry Focus 110 December 2014 | electronics for y ou absence of toxic materials are other ma- jor driving factors that make LEDs more affordable and growth-driving informs Harmeet Singh technical lead Analogue Applications TI India. “The average lumen effciency is much higher for LEDs when com- pared to incandescent lamps and CFL lamps” notes Swetanta Lahiri research analyst Netscribes. Energy conservation is driving demand in the LED sector. With LEDs you can save approximately 80 per cent of energy as compared to normal lighting devices. LEDs have a longer life in compari- son to normal lighting devices or even CFLs. Dhawan informs “In general life of an LED is approximately 25000 burning hours whereas ordinary lights last around 1000 burning hours and CFLs around 5000 to 6000 burning hours. Consumer’s demand is driven by the fact that once he or she has used LEDs extra costs for maintenance or replacement will not be incurred for a long period of time.” Awareness with regard to energy- saving has a huge impact on the development of energy-effcient light- ing systems such as LED light bulbs. “People are now more inclined toward buying LED light bulbs instead of CFLs or other ineffcient light bulbs. This is further being supported by the declining prices of LED light bulbs” says Raushan. Government policies are helping The Indian market for LEDs has shown a steady growth and increasing demand over the last couple of years thanks to the initiatives taken by the government. “Newly-formed govern- ment in India has emphasised that each and every house should have a light bulb by 2019 creating huge de- mand for power by 2019. This has led to the requirement of energy-effcient lighting systems such as LED light bulbs” says Raushan. Street-lighting and industrial and commercial applications are boosting the market in India. Government has also emphasised that all street lights in public places should be replaced with LED light bulbs encouraging the adoption of LED lighting in India. Street-lighting has huge scope for en- ergy-saving that can be achieved with the implementation of LED light bulbs. The largest segment driving LED adoption is the street-lighting segment informs Harish Lalchandani country head GE Lighting. He says “In a bid to cut energy costs and increase the quality of light toward enhancing town and pedestrian safety the government is pushing conversion of all street lights to LED. According to ELCOMA reports there are about 27.5 million street-light- ing points in India that will be converted to LED in a phased manner.” Government has taken several other steps to ensure the implementa- tion of LED at all levels. “Recently the government of Andhra Pradesh has an- nounced that it will be distributing LED light bulbs to 3.7 million households in Andhra Pradesh at a cost of ` 10 US 0.16 approx. which usually cost ap- proximately 6” informs Raushan. LED standards were published in 2012 which brought in a large-scale light- ing revolution in India shares Lahiri. He says “Customs duty on LED was reduced from 10 per cent to 4 per cent as part of government of India initiatives.” Government is also kick-starting demand in the domestic segment notes Dhawan. He says “Government through its energy-development agencies in vari- ous states is promoting a lot of projects where they are going to replace the exist- ing lighting systems with LED. In the last one year or so I have seen a lot of such projects coming up and agencies being set-up by the government.” Power Ministry has also intended to provide LED technology under Rajiv Gandhi Grameen Vidyutikaran Yo- jana RGGVY initiative. Raushan says “Government has intended to replace all street-lights and lights in public plac- es with LED light bulbs. It has modifed all CFL distribution scheme into LED distribution. All government depart- ments have been asked to procure only LED light bulbs instead of incandescent bulb and CFL light bulbs.” He adds “All this development is expected to drive the demand as well as awareness amongst the consumer regarding LED light bulbs.” Talking about how the Ministry of Power played an important role in promoting the use of LED lamps under RGGVY scheme Lahiri says “Railways have already started using LEDs in dif- ferent utilities such as traffc signals and railway coaches.” Finally government of India initia- tives like ‘Bachat Lamp Yojna’ and ‘LED Technology-wise it is OLED solar and wireless LED Here are some technological trends emerging in the LED space: Colour-changing LEDs. “One key trend is the development of LED lights that can produce any light within the visible spectrum. Philips is the first to introduce such LED bulbs which can change the colour of light” notes Raushan. With the help of an app the consumer can control the colour of LED. Wireless-bonded LEDs. Development of wireless-bonded LED technology can be con- sidered to be another latest technology trend with regard to LED lighting market. Raushan says “Wireless-bonded LED technology is also referred as flip-chip. It provides benefits such as improved durability better heat dissipation and longer life.” Wireless LEDs. Modern buildings being constructed today comprise lighting arrange- ments with daylight occupancy and time scheduling on/off sensors. “Similarly many upcoming LED road lighting systems call for wireless operability daylight and on/off scheduling” says Lalchandani. The new LED lighting systems both for indoor and street- lighting need to be designed to seamlessly integrate and work with these sensors and control systems. OLEDs. There is a new trend of solar LED lights being used to provide low-cost lighting in rural households. “The newest technology trend observed in the LED market is the organic light emitting diode OLED technology. OLEDs are LEDs manufactured from polymers with a liquid crystal display LCD glass covered with indium tin oxide ITO and polymer materials applied by ink jet printing” informs Lahiri.

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industry Focus 111 electronics for y ou | December 2014 Village Campaign’ are also promoting LED usage in street-lighting informs Singh. Notable market trends An interesting market trend which has been observed is that the demand for India-made LED light bulbs is higher when compared to imported LED light bulbs. Raushan says “Imported LED light bulbs do not have the electronics to withstand Indian electrical systems and thus do not work for very long. LED manufactured in India has good reliability and provides better after- sales services which is not the case with imported LED light bulbs.” He adds “Although LED imported from China is cheaper it is of bad quality and does not last long and thus people prefer Indian LED light bulbs.” On a similar note Dhawan says “Government should help the industry by restricting cheap imported products that actually harm consumers as they are not in line with the quality and safety requirements.” Some other recent trends in the market include price reduction and shift toward manufacturing of low- and mid- power LEDs. LED lights are extensively used in automotive lighting too. “The use of LED lamps in digital signage is another trend that has been observed” informs Lahiri. As the LED street-lighting segment is becoming more mature newer risk- sharing models are being explored between municipalities and lighting solution providers. Lalchandani says “Some of these risk-sharing models comprise deferred payments longer warranties special-purpose investment for large investments and annuity based payments.” He adds “Nowadays many customers also seem to be looking up at lighting solutions companies as one- stop-shop providers who can offer end-to-end solutions right from design installation testing and commissioning and fnancing.” LEDs are preferred over CFLs and tubelights for new installations “We have observed that most people to- day who are going for new installation in offces homes industries factories and other commercial spaces prefer to go for LEDs. It is slightly costly when compared to normal fuorescent lighting or even high-pressure sodium vapour lights for outdoor lighting” says Dhawan. He adds “But the pay- back period which is between two to three years is so attractive that for any new installation people are ready to shell out money on LED installation rather than the conventional lighting.” Majority of the new installations be it residential or commercial are opting for LED lighting today. Another aspect of this trend is the retro-ftting or replacement of LEDs. There are a lot of campaigns and activi- ties that create awareness on the benefts of LED even while replacing CFLs or other lighting. “Retro-ft is little slower as the initial cost is higher due to replace- ment of old fxture with new ones for LEDs” informs Dhawan. The latter is a slower process comparatively but both are catching on. Pricing trends Despite the fact that LED provides huge energy-saving LED market is not as large in India as it should be. This is mainly due to the fact that cost of LED lighting is much higher than that of traditional light bulbs. Raushan says “Due to recent development with regard to manufacturing of LEDs in India improvement in technology and competition price of LEDs has reduced to a large extent. It has been estimated that by the next two to three years price of LED light bulbs will be reduced by 50 per cent but still its cost will be higher than that of traditional light bulbs.” However with awareness about energy-saving application of LED lighting has increased thus pushing down prices of LED light bulbs. “In India in 2010 one LED lamp cost ap- proximately ` 1200 which now in 2014 costs around ` 400 ” informs Raushan. It has been observed that with the development and improvement in the manufacturing technology cost of LED light bulbs has decreased almost 30 per cent in the last couple of years. This has also forced the local manufacturers to develop low-cost LED light bulbs. Singh notes “The price of an LED bulb of 5-7 watts with power factor greater than 0.9 and total harmonic distortion lesser than 20 per cent which was ` 400 in 2012 has reduced by 50 per cent.” He adds “Products that were once available for more than ` 400 in Challenges faced by the industry h Lack of awareness regarding LEDs makes it difficult to scale-up business for the mass market h Inefficient LEDs imported from China resulting in huge competition h High cost of manufacturing return on investment ROI made in tools in India is very low h Lack of standards and LED testing facilities h Heavy dependence on import of LED-related electronic components h Lack of skilled manpower Major contributors to the story Harish Lalchandani country head GE Lighting Pankaj Raushan senior research analyst MarketsandMarkets Puneet Dhawan senior vice president and head of lighting business Orient Electric Harmeet Singh technical lead Analogue Applications TI India Swetanta Lahiri research analyst Netscribes

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industry Focus 112 December 2014 | electronics for y ou 2012 are now available for 50 per cent less.” Luminaries in other categories or application areas have witnessed a similar reduction in price in India. Dhawan believes “Within a year or two we should see the price of an LED lamp almost comparable to a normal CFL lamp or fxture.” Recommendation from the industry Government is actively participating in promoting the LED segment notes Dhawan. Street-lighting is one of the major applications of electric power in India. He says “By helping munici- palities of the civic authorities to have this perception and mindset change of transitioning from energy-guzzling high-voltage sodium lights to LED which at one-fourth the wattage can give you the kind of lighting experi- ence in terms of light availability on the roads is actually a key area for the government to work upon.” Dhawan also says “We expect the government to come up with regula- tions to help the Indian LED industry to set-up manufacturing of these prod- ucts in India.” Lahiri believes “There is still need for a stronger institutional mechanism. It is necessary to enable testing of LED products through the development of common testing protocols.” LED will need government support and RD facilities to boom in future Development of LED lighting market in India is primarily dependent on government and industry bodies at least for the short-term duration. Once there is price rationalisation demand for LED lights is expected to get a big boost believes Raushan. He says “In- dustry needs to develop its own RD facilities which help in the develop- ment of electronic components for LED lights. This is expected to reduce the cost of manufacturing.” He adds “Industry also needs to tackle sub- standard LED lights procured from Chinese market which is hampering the LED market.” This develops a negative marketing with regard to LED lighting systems. Industry should work toward reducing the import of materi- als required for the development of LED lights. Lahiri also believes that the industry should look toward building strategic partnerships to obtain quality input at the right price. Developing an effcient distribution network that can handle different segments such as enterprises consumers and government bodies would help the industry grow. He says “Another important step is brand-cre- ation in order to infuence enterprises B2B and consumers retail sales for sales.” Engaging in the development of innovative designs and improvements in product effcacy would give a push to the Indian LED market.  The author is a senior technical correspondent at EFY

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