South Africa LED Lighting Market Overview, 2028

The Light Emitting Diode, or LED, is an electronic component that consists of a semiconductor chip that emits light as current flows through it. The movement of electrons between energy bands leads to the release of energy in the form of light. As a light source, an array of miniature LEDs on a chipset or a vertical array is employed, which is commercially available in many configurations such as lamps, batons, bulbs, strips, and so on. LEDs are more environmentally friendly than conventional light sources and are gaining popularity around the world, notably in Africa. The majority of South African households use incandescent light bulbs. These are the most common and least-priced types of light bulb. They are, however, inefficient and can emit a lot of heat. LED light bulbs are gaining popularity in South Africa. They consume less energy than incandescent bulbs and produce less heat. LED bulbs cost more than incandescent lamps, but they last far longer. In South Africa, compact fluorescent light bulbs (CFLs) are also available. CFLs consume less energy than incandescent bulbs and last longer than LED bulbs. They do, however, contain mercury, which can be damaging to the environment if the bulbs are not properly disposed of. OPPLE Lighting Co., Ltd, Savant Systems, Inc., Signify Holding, Dialight PLC, and African LED are the major players in the LED lighting market in South Africa.

According to the research report, provided by Bonafide research “South Africa LED Lighting Market, Overview 2028”, is expected to add USD 1.24 Billion in terms of Market Size by 2028. The growing adoption of LEDs as a light source is likely to drive the growth of the LED lighting market during the forecast period. Furthermore, lower LED prices, reduced heat losses, and increasing acceptance of LED lighting in various end uses such as industrial buildings, and residential and commercial buildings are expected to drive the growth of the LED lighting market. Furthermore, favorable government regulatory policies are expected to support the growth of the interior LED lighting market. On the other side, a lack of understanding about the cost of installation is expected to stymie the growth of the LED lighting market over the forecast period. Furthermore, technological innovation and development, as well as diverse product designs by LED light producers, will give significant chances for the LED lighting industry to grow in the next years. However, the advent of alternative technologies shortly may pose additional challenges to the growth of the LED lighting market.

Since other light sources emit hazardous heat and greenhouse gases, LEDs are being promoted globally to mitigate the negative impact of various lighting solutions. LED lighting, directly and indirectly, addresses electricity shortages and carbon footprints. As a result, governments throughout Africa are encouraging the usage and sale of LEDs. According to africa.com, an amendment has been suggested by African representatives to the Minamata Convention on Mercury in May 2021. The removal of special exclusions for mercury in lighting will pave the door for LED mainstream adoption, alleviating power systems across regions through energy savings. However, energy penetration remains a major barrier, affecting the demand for LED lights. Government and corporate sector groups are excited about expanding access to electricity through off-grid power options and developing conventional and renewable energy-producing initiatives. According to the African Development Bank Group, the South African Redstone concentrated solar power (CSP) project achieved its first debt drawdown in February 2022, making it one of the country's largest renewable energy investments. The African Development Bank served as Mandated Lead Arranger (MLA) and Coordinating Bank for the overall investment of ZAR 11.6 billion, committing ZAR 2.306 billion to the transaction.

According to one estimate, South Africa has approximately 18 million households. Only 81 households generate lightning using solar energy out of the 18 million households that receive lightning from the power grid. Furthermore, the IEA estimates that the country's overall electricity consumption in 2020 was 209.81 TWh, with 3.5 MWh consumed per inhabitant. The total CO2 emissions from electricity production are 388.21 metric tonnes. Furthermore, the industrial sector consumes 355, 172 TJ of electricity, while the residential sector consumes 166, 860 TJ. Coal was the most important source of energy in 2020, producing 211, 738 GWh of electricity. Other prominent sources of energy included oil, hydro, nuclear, and biofuels. Solar PV and Solar Thermal generated 3,603 GWh of electricity and 1,428 GWh respectively.

As per government sources, Household connection to mains power increased from 76.7% in 2002 to 89.3% in 2021, according to government data. The greatest rise was seen in the Eastern Cape, where access to mains electricity grew by 37.2 percentage points during this period, from 55.3% to 92.5%. According to the GHS, 79.6% of households used pre-paid electricity, and 12.5% used traditional in-house meters. In South Africa, 77.7% of households utilized electricity for cooking. Furthermore, it demonstrates that while electricity was the most common source of energy for lighting (87.2%), heating water (82.5%), and cooking (81.3%), many homes relied on a range of other energy sources such as wood (14.4%) and gas (6.9%) for cooking and candles (16.3%) for lighting.

While the rest of the globe has embraced new technology and LED lighting, the majority of South Africans continue to rely on old fluorescent bulb technology, missing out on the energy-saving, environmental, and cost-saving benefits of LEDs. Installation and replacement costs, as well as consumer aversion to change, are factors impeding LED adoption. This, however, creates replacement opportunities for local businesses, as does solar lighting. There are fundamental safety and performance criteria for older lighting technologies, such as compact fluorescent lamps and incandescent lights, but no such regulations exist for LEDs, which save energy and require less maintenance than compact fluorescent lamps. The business has petitioned the government to regulate and safeguard consumers against cheap, subpar, and potentially deadly goods that are imported mostly from Asia.

The government is continually working to eliminate dangerous light sources such as mercury, which is widely utilized in the region. Mercury, when discarded in the environment, may emit toxic fumes that can be lethal as they infiltrate the food chain over time. To address this, governments formed the Clean Lighting Coalition, a group of technical experts, campaigners, and business partners dedicated to eliminating the Minamata Convention exclusions for Mercury in lighting goods. Such policies open the road for LED lighting solutions to reach the general public. The necessity for rapid development of Africa's healthcare infrastructure was underscored during the pandemic. Despite accounting for 15% of the world's population, African residents account for 50% of communicable illness mortality, according to afdb.org. Organizations such as the African Development Bank Group are developing initiatives such as the Strategy for Quality Health Infrastructure in Africa, collaborating with regional governments to expand healthcare infrastructure. Such improvements will result in significant demand for lighting solutions to help better manage energy and contribute to overall growth.

Load shedding is a common stumbling block in various sections of the African continent. Most African sectors, including LED demand and manufacturing, are hampered by this issue. Several government efforts are attempting to promote energy-saving equipment such as LED. South Africa, for example, is witnessing the Department of Mineral Resources and Energy (DMRE) and the South African National Energy Development Institute (SANEDI) developing minimum energy performance standards (MEPS) for streetlights, according to engineering news.co.za. The MEPS is expected to promote efficiency and the adoption of high-quality lighting goods, allowing regulators to ensure that the devices fulfill specified energy-performance standards.

The South African Solar Energy Technology Road Map (SETRM) is being developed to provide a comprehensive, aligned, achievable, and time-bound strategic plan that will help guide: policy and regulatory development, industrial strategy and related investment, education, and skills program development, innovation, research and development, and the overall diffusion of solar technologies in the country, and given the country's significant regional impact, in the broader Southern African region. The goal of SETRM is to create a clear, comprehensive, and prioritized implementation plan (i.e. roadmap) for the development and diffusion of concentrated solar power, solar photovoltaic technology (is), solar heating and cooling technologies, and related R&D in South Africa toward reduced energy use, carbon emissions reduction, distributed electricity generation, expanded independent power production, and electricity supply to the national grid, and the reduction of reliance on fossil fuels.

As per World Bank, the population of South Africa was 60.04 Million in 2021, of which 29.56 Million are male and 30.48 Million are female. Of the total population, 20 million are under the age of 14, and 34 million have age between 15-64 years. The urban population is 8.2 million and the rural population is 1.26 million. As per World Bank, The GDP of South Africa was USD 419.95 Billion in 2021, the inflation rate was 6%, and per capita income was US$6,994.2. Declining per capita income is one of the challenges to the growth of the LED Lighting market. Due to the high cost of LED lights, South Africans are not interested in acquiring them.
The growing need for the internet of things (IoT) technology, rising consumer and government awareness about energy savings, and the emergence of light fidelity (Li-Fi) technology are the primary factors driving market expansion. The demand for energy-efficient connected lighting controls and ongoing and upcoming smart city projects, as well as various policies encouraging energy conservation and environmental protection, combined with stringent regulations, discourage the use of incandescent lamps in developing economies, exacerbating the market value. Commercial businesses' increased usage of smart and automated technologies is consequently likely to fuel market growth.

COVID-19 Impacts:
The lighting business, like many other industries in South Africa, was impacted by COVID-19 since supplies of electrical materials were disrupted due to a shutdown in several foreign nations. The market recorded a decrease in the pandemic scenario and a decrease in total market value. However, the growth momentum is expected to quickly rebound. COVID-19 has had an impact on the initial or starting node of the market value chain, namely lighting product producers. Furthermore, the market is seeing a pause in production and disruption in the supply chain, resulting in reduced industrial output growth and a fall in light manufacturing output across major manufacturing hubs.

Considered in this report
• Geography: South Africa
• Historic year: 2017
• Base year: 2022
• Estimated year: 2023
• Forecast year: 2028

Aspects covered in this report
• South Africa LED lighting market with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Product Type:
• Lamps :
• A-Type
• T-type
• Others (Can LED light bulbs, Flood LED light bulbs, Track LED light bulbs, Tube LED light bulbs, Etc.)
• Luminaries :
• Downlighting
• Decorative
• Directional
• Others

By Application:
• Indoor
• Outdoor

By Sales Channel:
• Retail/ Wholesale
• Direct Sale
• E-commerce

By Installation Type:
• New
• Retrofit

The approach of the report:
This report consists of a combined approach of primary as well as secondary research. Initially, secondary research was used to get an understanding of the market and list out the companies that are present in the market. The secondary research consists of third-party sources such as press releases, annual reports of companies, and analyzing government-generated reports and databases. After gathering the data from secondary sources primary research was conducted by conducting telephonic interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this we have started doing primary calls to consumers by equally segmenting consumers into regional aspects, tier aspects, age groups, and gender. Once we have primary data with us we started verifying the details obtained from secondary sources.

Intended audience
This report can be useful to industry consultants, manufacturers, suppliers, associations & organizations related to the LED Lighting industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing & presentations, it will also increase competitive knowledge about the industry.

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Manmayi Raval

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