Lighting as a Service Market - Global Industry Size, Share, Trends, Opportunity, and Forecast Segmented By Application (Residential, Office, Shops, Hospitality, Industrial, Architectural Lighting and Others), By Installation (Indoor and Outdoor), By Component (Luminaries & Control Equipment, Software & Communication Systems and Maintenance Services) and By Region 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 3.84 Billion
CAGR (2026-2031)	34.83%
Fastest Growing Segment	Residential
Largest Market	North America
Market Size (2031)	USD 23.07 Billion

Market Overview

The Global Lighting as a Service Market will grow from USD 3.84 Billion in 2025 to USD 23.07 Billion by 2031 at a 34.83% CAGR. Lighting as a Service (LaaS) is a managed service delivery model wherein illumination is provided on a subscription basis rather than through the purchase of hardware assets, typically encompassing design, installation, maintenance, and technology management. The market’s growth is fundamentally supported by the financial shift from capital expenditure to operational expenditure, allowing organizations to modernize infrastructure and access energy-efficient LED technology without significant upfront investment. Additionally, the urgent demand for sustainability in commercial real estate drives adoption as companies seek to meet strict regulatory standards and reduce utility costs. According to 'LightingEurope', in '2024', lighting accounts for approximately 20% of the total cost-effective electrical energy savings potential in non-residential buildings, highlighting the substantial efficiency gains that incentivize the transition to managed lighting solutions.

Despite these strong drivers, a significant challenge that could impede market expansion is the data security risk associated with Internet of Things (IoT) integration. As LaaS systems increasingly rely on connected sensors and cloud-based platforms for real-time monitoring and control, they introduce potential cybersecurity vulnerabilities within corporate networks. These security concerns can create hesitation among risk-averse enterprises and government entities, potentially slowing the deployment of smart, connected lighting infrastructures despite their operational benefits.

Key Market Drivers

The Integration of Internet of Things (IoT) with Connected Lighting Solutions stands as a primary catalyst for the market, transforming traditional illumination into intelligent, data-driven networks. This connectivity enables real-time monitoring and predictive maintenance, which are the operational cornerstones of the Lighting as a Service model. By embedding sensors and control systems, providers can offer value-added services like occupancy analytics that go beyond simple light provision. The scale of this deployment is evident; according to Signify, January 2025, in the 'Fourth Quarter and Full-Year Results 2024', the company's installed base of connected light points increased to 144 million at the end of the year. This expanding infrastructure creates a fertile foundation for subscription-based services that rely on continuous connectivity to deliver optimization.

Simultaneously, the Rising Adoption of Energy-Efficient LED Lighting Systems drives momentum by offering operational expenditure reductions that justify long-term service contracts. As organizations face pressure to minimize carbon footprints, the high efficiency of solid-state lighting becomes a financial imperative. According to the New York Power Authority, November 2024, in the 'Energy-Saving LED Streetlights Installation Begins in the City of Amsterdam' release, smart LED streetlights are 50 to 65 percent more efficient than alternative options. This efficiency gap incentivizes entities to outsource upgrades to service providers without upfront capital. Public sector support further accelerates this shift; according to the U.S. Department of Energy, in 2024, the agency awarded $11.5 million to install LED lighting in public facilities, reinforcing the trend toward modernized infrastructure.

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Key Market Challenges

The data security risk associated with Internet of Things (IoT) integration is a critical factor hampering the expansion of the Global Lighting as a Service Market. As LaaS models evolve from simple LED retrofits to connected systems requiring cloud-based monitoring, they necessitate the continuous collection and transmission of granular building data. This connectivity expands the digital attack surface, effectively turning lighting networks into potential entry points for cybercriminals to infiltrate broader corporate IT infrastructures. Consequently, risk-averse organizations, particularly in data-sensitive sectors such as finance, healthcare, and government, often view these vulnerabilities as unacceptable, leading to extended sales cycles or the outright rejection of subscription-based lighting models in favor of traditional, offline alternatives.

This apprehension regarding digital vulnerability is a quantifiable barrier to the wider deployment of smart infrastructure. According to the 'Association for Smarter Homes & Buildings', in '2024', '26% of current users identified data privacy and cybersecurity concerns as a significant challenge impeding the adoption of smart building technologies'. This statistic underscores the direct correlation between security anxieties and the slowed uptake of connected environments. Since LaaS is intrinsically linked to the smart building ecosystem, this prevailing skepticism regarding data protection limits the market’s addressable customer base and stifles the transition toward fully managed, connected lighting solutions.

Key Market Trends

The Incorporation of Circular Economy Principles in Service Models is fundamentally altering the market's value proposition, shifting the focus from linear hardware consumption to comprehensive lifecycle management. In this evolving landscape, Lighting as a Service (LaaS) providers are increasingly deploying modular, serviceable luminaires that can be repaired, remanufactured, or upgraded, thereby reducing material waste and aligning with the stringent sustainability mandates of global enterprises. This strategic pivot towards circularity is gaining significant commercial traction as major players prioritize closed-loop systems to secure long-term contracts; according to Signify, January 2025, in the 'Fourth Quarter and Full-Year Results 2024', the company’s circular revenues accounted for 35% of its total sales, exceeding its strategic targets and validating the growing customer demand for sustainable service-based solutions.

Simultaneously, the Transition to Cloud-Based and Wireless Control Architectures is serving as the technological backbone for scalable service delivery, enabling providers to bypass the costs and complexity of rigid, hardwired installations. By leveraging wireless connectivity, LaaS vendors can drastically reduce the labor associated with retrofitting legacy infrastructure, while cloud integration facilitates the seamless remote monitoring and usage-based billing essential for subscription models. The magnitude of this industry-wide shift is evident in the revenue streams of leading manufacturers; according to Glamox, May 2025, in the 'Glamox Group Annual Report 2024', 42% of the company's total turnover was derived from connected lighting solutions, highlighting the critical role of connectivity in modernizing the built environment for managed services.

Segmental Insights

The Residential segment represents the fastest-growing category within the Global Lighting as a Service Market, driven primarily by the rapid integration of Internet of Things (IoT) technologies into smart home ecosystems. This expansion is supported by a shift in consumer preference toward subscription-based models that offer advanced automation and remote management without significant upfront capital investment. Furthermore, stringent energy efficiency mandates established by institutions such as the U.S. Department of Energy compel the adoption of managed, high-efficiency LED solutions. These regulatory pressures, combined with the demand for intelligent home connectivity, are accelerating the transition toward service-oriented residential lighting architectures.

Regional Insights

North America maintains a leading position in the Global Lighting as a Service market due to the extensive implementation of energy-efficient lighting systems across commercial and industrial facilities. This growth is significantly influenced by rigorous energy conservation standards established by institutions such as the U.S. Department of Energy, which encourage the replacement of legacy infrastructure with sustainable alternatives. Furthermore, the increasing preference for financing models that remove upfront capital costs allows enterprises to upgrade facilities efficiently. These factors collectively drive the region's strong market performance and sustained demand for managed lighting solutions.

Recent Developments

• In May 2025, eEnergy Group established a strategic partnership with Redaptive to fund up to £100 million of decarbonization projects across the United Kingdom. This collaboration appointed the UK-based net zero energy services provider as a dedicated delivery partner for Redaptive’s Energy-as-a-Service projects. The agreement enabled the funding and installation of energy-saving technologies, including LED lighting and solar power systems, for both public and private sector clients without requiring them to provide upfront capital. By combining Redaptive’s financing capabilities with eEnergy’s operational expertise, the alliance aimed to accelerate the implementation of sustainable infrastructure and support organizations in reducing their energy costs.
• In November 2024, LEDVANCE launched a new range of innovative lighting products designed to enhance flexibility and efficiency for professional applications. The release featured the new Microdisk downlight equipped with Night Ring technology, which was engineered to reduce glare and provide improved visual comfort for hospitality and commercial settings. Additionally, the company introduced a new PAR lamp incorporating Opti Select technology, allowing users to adjust beam distributions without disassembling the luminaire. These product advancements were aimed at offering electrical contractors versatile, energy-saving solutions that meet strict regulatory standards while simplifying inventory management and installation processes in the field.
• In October 2024, Redaptive secured a $100 million strategic investment from the Canada Pension Plan Investment Board to accelerate the deployment of its Energy-as-a-Service (EaaS) solutions. This significant capital infusion was intended to support the company’s growth by expanding its customer base, which includes major commercial and industrial enterprises. The funding enabled the company to further its mission of helping organizations achieve sustainability and energy efficiency goals without requiring upfront capital for equipment upgrades. The investment underscored the growing market demand for scalable, data-driven energy solutions that reduce carbon footprints and optimize utility costs for large real estate portfolios.
• In June 2024, Signify entered into a ten-year Light as a Service (LaaS) agreement with Leonardo UK, a prominent aerospace and defence company, to upgrade the lighting infrastructure at its Yeovil manufacturing site. This collaboration involved the turnkey installation of energy-efficient LED fixtures integrated with the Interact lighting management system across fourteen buildings. Under the performance-based contract, the client was not required to make an upfront capital investment, instead paying an annual operating fee while Signify assumed responsibility for the design, installation, and maintenance of the system. The project aimed to significantly reduce carbon emissions and improve the working environment for personnel.

Key Market Players

• Signify Holding
• Koninklijke Philips N.V.
• General Electric Company
• Eaton Corporation plc
• Zumtobel Group AG
• Cree Inc.
• Acuity Brands, Inc.
• Lutron Electronics Co., Inc.
• Future Energy Solutions, LLC
• SIB Lighting

By Application	By Installation	By Component	By Region
Residential Office Shops Hospitality Industrial Architectural Lighting and Others	Indoor and Outdoor	Luminaries & Control Equipment Software & Communication Systems and Maintenance Services	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Lighting as a Service Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Lighting as a Service Market, By Application:

• Residential
• Office
• Shops
• Hospitality
• Industrial
• Architectural Lighting and Others

• Lighting as a Service Market, By Installation:

• Indoor and Outdoor

• Lighting as a Service Market, By Component:

• Luminaries & Control Equipment
• Software & Communication Systems and Maintenance Services

• Lighting as a Service Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE