Emerging LED Lighting Market in India to push Urban Planning towards Eco-Efficiency and Low-carbon Trajectory

An "energy" revolution akin to the Green and White revolutions that occurred few
years ago altering the agriculture and dairy sectors, is the need of the hour in
India. And, Light Emitting Diode (LED) lighting will be at the heart of such a
revolution. Mandatory norms of energy efficiency for new buildings/facilities,
incentive support for energy-efficient projects, Integrated Lighting Management
Systems (ILMS) for street lighting, and phasing out of energy-guzzling lighting
products could trigger an energy-efficiency revolution in India.

The LED lighting market in India is at a nascent stage and these lighting systems
are yet to make inroads into the market, which is currently dominated by compact
fluorescent lamps (CFLs) and T5 fluorescent lamps (T-FL). Poor penetration is due to
high upfront cost of LED lighting systems, absence of standards, testing,
measurement and verification protocols, and low level of awareness.

LED lighting systems are anticipated to play significant role in reducing India's
overall energy requirements. Energy consumption can be reduced by usage of LED
lighting for street lighting, in conjunction with ILMS. Implementing energy saving
performance contracts (ESPC) for residential and commercial segments and integrating
LED lighting controls and systems with building management systems will further
lower energy costs of a building. Some LED lighting suppliers are bundling ESPC
services along with their lighting products and energy-saving solutions, to
diversify their revenue stream.

Current policies on energy efficiency might become redundant considering the
construction sector's growth rate in India. The construction market is booming again
and has been forecast to increase from USD 100 billion in 2010 to USD 154 billion by
2015, and USD 500 billion by 2025. Investments in green buildings are projected to
increase to USD 30 billion by 2015.

Currently, seven mega cities are proposed to be built along the 1,500-km long
Delhi-Mumbai Industrial Corridor (DMIC) with the help of Japanese government and
Japanese corporations such as Matsushita, Hitachi, and Mitsubishi. A total of 24
mega cities have been planned - along the line of states like Uttar Pradesh,
Haryana, Rajasthan, Madhya Pradesh, Gujarat, and Maharashtra - with the seven
proposed cities to be completed by 2018-19 in the first phase. The whole DMIC
project cost is estimated at USD 90 billion.

Prices of LED lighting systems have fallen by more than 30 percent in the past 2-3
years due to increasing adoption and manufacturing technology improvements. Mass
commercialization and acceptance will lead to a further fall in prices, which will
make these products more affordable for commercial segments as well as low and
middle-income households in the residential segment. With 20 percent of electricity
consumption in a building attributed to lighting systems, there is indeed a great
potential for LED lighting to gain prominence in India. One of the major schemes
that the Bureau of Energy Efficiency (BEE) is implementing during the 11th Five Year
Plan (FYP) (2007-12) includes - Bachat Lamp Yojana, an ongoing program to promote
energy-efficient and high-quality CFLs as replacement for incandescent bulbs. Going
forward, in the 12th and 13th FYPs, the Government must make efforts to replace
these CFLs with LEDs.

Energy Conservation Building Code (ECBC), which sets minimum energy performance
standards for new commercial buildings, has stipulated energy use of 110 kWh/m2/year
as against the national benchmark of 180 kWh/m2/year. BEE is also targeting to
reduce energy consumption by municipal street lighting systems, which currently
adopt energy-guzzling lamps.

The Indian market is highly driven by the principle of 'value for money'. Offerings
in future will be aimed at providing better quality and durable LEDs at low prices.
The LED market in India was completely import-dependent in the past. However, few
companies in India are now entering into joint ventures with foreign companies.
Cheap imports from China, Taiwan, and Korea by distributors and dealers have been
found to be of poor quality that has hurt the confidence of genuine users. Absence
of regulations and standards form a conducive market environment for such
unorganized sectors to thrive. Today, India being a growing market for LEDs, many
overseas companies are setting up manufacturing plants to cater to the growing needs
of commercial, municipal (street lighting), and residential customers.

Cities of the future will most certainly witness dramatic changes in urban planning.
It is thus imperative to incorporate smart concepts and greater information
technology (IT) usage to monitor usage, reduce leaks/slippages, and aid in efficient
delivery mechanism through effective demand management. This means that going
forward, lighting companies would have to work in sync with software companies, and
energy service companies (ESCOs), building management solution providers, and public
agencies/urban local bodies, to bring various "smart" concepts to fruition.

If you are interested in knowing more about the topic, please send an e-mail to
Ravinder Kaur/Priya George, Corporate Communications, at ravinder.kaur@frost.com /
priyag@frost.com, with your full name, company name, title, telephone number,
company e-mail address, company website, city, state and country.