The grow lights market is projected to reach USD 2.5 billion in 2025 from USD 1.0 billion in 2020, at a CAGR of 19.9%. Major drivers for the grow lights market’s growth are the increasing adoption of indoor farming in urban areas; ongoing government initiatives to support energy-efficient lighting; the growing need for long-lasting, energy-efficient, and economical grow lights; the emerging trend of farm-to-table concept. Further, the rise of vertical farms, technological advancements in LED grow lights, the legalization of cannabis in different countries including the US, and the emergence of horticulture lighting software and calculator will create opportunities for the grow lights market. The major restraint for the market is the high setup and installation costs. The lack of standard testing practices for assessing product quality of grow lights and their fixtures pose a major challenge to this market.
The commercial greenhouse segment is projected to account for a significant share of the grow lights market Commercial greenhouses are constructed to practice horticulture in a protected environment to ensure an optimum yield. Greenhouses are designed in such a way that they can trap the natural sunlight and humidity and retain it, which makes it conducive to grow different types of plants. These plants can be grown either by using soil as a base or by using the hydroponic technique. Initially, greenhouse farming was largely practiced for nonprofit organizations such as research institutes, schools, as well as in gardens for decoration purposes. Gradually, growers realized the potential benefits of cultivating plants inside a greenhouse, and this led to the development of commercial greenhouses. Plants grown in greenhouses are protected from external dirt, and with proper care, they can be protected from insects and pests as well. It helps obtain a higher yield in greenhouses and achieve profitability.
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The grow lights market for the software & services segment is expected to grow at a higher CAGR than the hardware segment during the forecast period. Different kinds of software solutions are used in grow light systems to improve plant quality and fulfill different light requirements by different plants, as well as to create and maintain an optimal lighting environment necessary to maximize production. Along with software, design and engineering, maintenance, and support services are also offered by the companies operating in the grow lights market.
Grow lights are used to ensure that plants get optimum light for their growth. Hence, when the light intensity decreases, grow lights are required to be retrofitted immediately. The introduction of new grow light technologies such as LED, plasma, and induction has provided growers with more options to choose from while retrofitting their grow light systems. The choice of light solely depends on the type of plants that are to be grown. LED grow lights offer variable spectrums, which makes them suitable for a wide range of plants, such as cannabis, green leafy vegetables, and ornamental plants. Hence, grow light technology is highly preferred by growers to improve the growth and quality of plants in greenhouses. Horticulture lighting is a new concept in vertical farming, which is nowadays adopted in urban establishments. All these factors are expected to present significant opportunities for new installations of grow lights in the coming years.
The grow lights market in APAC is expected to register the highest CAGR during the forecast period. Surging population and increasing emphasis of regional governments on the adoption of LED lights in farming practices, along with fast-track urbanization, are the key factors driving the market growth in APAC. Additionally, to reduce transportation costs and minimize the distance between the market and production plant of fresh fruits and vegetables, farmers are focusing on urban farming, which is likely to generate demand for grow lights in the coming years.
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