An Untapped Opportunity: Lighting Controls

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.

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