February 20, 2018

Indoor farming stimulates LED market

					Indoor farming

According to U.S. consultants, traditional greenhouses, vertical farming and the legalization of cannabis offer huge potential for LED lighting technology.

The U.S. consultants from Strategies Unlimited have a close eye on the LED market. Philip Smallwood, Director of LED & Lighting Research, is particularly enthusiastic about a relatively young market segment: greenhouse lighting systems. In his blog post to mark the “2nd Horticultural Lighting Conference” in fall 2017, he describes a new dawn in the LED sector that reminds him of 2010/11. According to the consultants’ analysts, the booming market will double in size in the next five years—from four to eight billion U.S. dollars. “LED technology has the potential for disruption,” Smallwood wrote.

According to Strategies Unlimited, LEDs still account for less than 25 percent of the market. But by 2022, LED manufacturers’ turnover will increase to three billion U.S. dollars. More and more operators of traditional greenhouses are switching to LED lighting. Not only is it energy efficient, it also makes it easier to produce the optimum light wavelengths for the plants being grown. That’s because an entire LED spectrum is available nowadays, with all conceivable frequencies from UV to near-infrared.

New markets stimulate demand

In addition to greenhouses, new markets are emerging too. The global trend toward vertical farming, for example. Fruit and vegetables are grown in multi-story buildings as a way of supplying fast-growing cities with short transport distances. Artificial lighting makes up for the lack of sunlight in these buildings. At the same time, indoor cultivation of cannabis is booming in the U.S. According to Strategies Unlimited, it has been partly legalized for medical purposes in 29 US federal states. Half a dozen states have completely legalized cultivation, although the licensed growers will be strictly regulated. The consultants estimate that this market alone will require lighting technology worth around 400 million US dollars in 2022. According to forecasts, around 70 percent of this amount will be spent on LED technology.