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Summary:

The future of lighting in commercial and industrial buildings is digital, networked and intelligent. But the potentially massive opportunity of retrofitting these buildings with lighting control systems, has largely been untapped, and is being driven by a dozen startups according to a GigaOM Pro report.

The future of lighting in commercial, industrial and government buildings is digital, networked and intelligent, though the potentially massive opportunity of retrofitting these buildings with lighting control systems has largely been untapped. But according to a new report on GigaOM Pro (subscription required), written by Trevor Curwin of Kachan & Co., the lighting controls sector is now being driven by a dozen startups that have a solid chance of getting acquired by larger players.

There are hundreds of billions of square feet of existing commercial and industrial building space in the developed world, including 74.5 billion square feet of floor space in commercial buildings currently in the U.S. Commercial and industrial building owners commonly spend 40 percent of their electricity expenditures on lighting, but only seven percent of their buildings in the U.S. have installed lighting control systems of any kind, including retrofitted lighting fixtures, dimmable lighting systems or building automation networks.

So far, the companies that have developed lighting-specific control technology for these buildings are mostly less than three years old, says Curwin’s report. Startups in the space include Cavet, Energy Automation Systems (EASI), Fifth Light Technologies, Adura Technologies, Lumenergi, Easylite, Lutron Electronics, Starfield Controls, Echoflex Solutions, and Universal Lighting Technologies.

Because the market is so young and new, but the market size is substantial, the best of these startups have a good chance of getting acquired by larger players like building automation giants Johnson Controls and Honeywell, or demand response players like EnerNOC, and Comverge.

The success for these startups will rely on having a low upfront capital cost, having the least disruption of the building infrastructure, targeting the private sector (which is underserved) and having a strong sales team. Building owners said that the most important aspects of a lighting controls system were “low-cost dimmable ballast technologies,” a “one-stop
integrated solution” and having a “plug-and-play concept.”

At a time when lighting control customers are looking to cut operating costs, and when state and federal-level policies are heavily  focused on energy efficiency, the success of these firms’ efforts could be indicative of trends on the broader greentech market.

To check out the entire report see GigaOM Pro (subscription required):

Report: An Assessment of the Lighting Control Market Segment

Image courtesy of Cavet.

By Katie Fehrenbacher
  1. While it is good to bring this idea to the fore, you should do a bit more research before spouting off broad assertions. Lutron Electroniocs has been around for over 40 years, and brought the first solid state dimmer to market in the 60s. The thought of them being acquired by a start-up like EnerNOC is somewhat laughable. If anything, they might be the one to acquire many of the newer firms in the controls space, as
    Lutron has been at the vanguard of lighting controls since they created the market a half a century ago.

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  2. Actually Jon G, stay fresh – in Katie’s defense… just looked it up, EnerNOC has twice the revenue with one third the employees at this point.

    Katie, my proposal remains open…

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  3. Simply to raise our hand as one of the kindergarten age players. DimOnOff was created around 5 years ago with this specific market in mind and has been developing and selling products based on a distributed lighting control using various wireless technologies. We strongly believe that the right solution is a combination of various technologies and the challenge is to make them work together.

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  4. [...] As we pointed out in a recent report, a dozen or so startups now dominate the big, untapped smart lighting controls market, with the best likely to become acquisition targets for building controls incumbents such as [...]

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  5. [...] we pointed out in a recent report, a dozen or so startups now dominate the big, untapped smart lighting controls market, with the best likely to become acquisition targets for building controls incumbents, such as [...]

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  6. I agree with Jon’s assessment. Lutron is a leader in Lighting controls, both from a technology and market leadership perspective. While EnerNOC has enjoyed great success in recent years I highly doubt they would ever acquire Lutron or a company similar to Lutron. It’s too much of a deviation from their established business model and would eat up most of their cash. It would be an eyebrow raising acquisition to say the least.

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