- Lighting accounts for about 8% of global electricity demand, equal to roughly 2 200 TWh in 2024.
- Rapid adoption of LED technology has stabilised electricity use for lighting despite global building growth.
- A second wave of LED deployment is emerging, focused on higher efficiency, circular design and smart controls.
The global lighting sector is entering a new phase of innovation as the next generation of light emitting diode technology promises higher efficiency, smarter systems and improved circular design according to new analysis by the IEA.
Lighting remains one of the most visible components of global electricity consumption as economies move deeper into what many analysts describe as the Age of Electricity. According to estimates from the International Energy Agency, lighting in buildings and outdoor applications accounted for about 8% of global electricity demand in 2024, equal to around 2 200 TWh. When industrial lighting is included, global electricity consumption for lighting is estimated to range between 2 500 TWh and 3 500 TWh annually.
Over the past two decades the sector has undergone a significant transformation as LED technology replaced older lighting systems. A typical halogen lamp produces around 20 lumens per watt while compact fluorescent lamps reach roughly 50 lumens per watt. LEDs sold today average close to 100 lumens per watt and some professional grade products exceed 200 lumens per watt.
The rapid spread of LED lighting has been one of the most successful energy efficiency transitions in recent years. The technology offers long operating lifetimes, falling costs and strong performance gains, which together have helped reduce electricity consumption, lower energy bills and limit emissions growth.
However the global shift to LED lighting is still unfolding and a second wave of deployment is now emerging. Adoption rates differ widely between regions while global demand for brighter buildings, urban infrastructure and outdoor lighting continues to expand. At the same time, early generation LEDs installed more than a decade ago are approaching the end of their operating life, creating an opportunity for replacement with more efficient and intelligent systems.
Government policies have played a critical role in driving adoption. Minimum energy performance standards now cover about 110 countries and energy labelling schemes have guided consumer purchasing decisions. Additional policy measures including efficiency obligation programmes and renovation initiatives have further supported market growth.
International environmental agreements are also accelerating the shift away from older technologies. The Minamata Convention on Mercury, which has more than 150 participating countries, is helping to phase out mercury containing fluorescent lighting and accelerate the transition to mercury free LED alternatives.
Global LED adoption currently follows three distinct patterns.
China and India are leading the transition, with LED market shares exceeding 85% and 75% respectively. Both countries have implemented strong policy frameworks and large scale public procurement programmes. India’s UJALA initiative, which purchases LED lamps in bulk, has dramatically reduced prices and enabled widespread replacement of older household and street lighting.
Europe and North America also demonstrate strong uptake, although the pace of replacement has been slower. These regions previously relied heavily on compact fluorescent and improved halogen lighting, which reduced the urgency to transition immediately when LEDs first entered the market.
Many emerging economies across Africa, Southeast Asia and Latin America are still catching up. LED sales shares in these regions range from 50% to 85%, although policy coverage and enforcement remain uneven. Regional standardisation initiatives in parts of Africa and the ASEAN region are helping accelerate progress, while several Latin American countries including Argentina, Brazil, Bolivia and Chile were early movers in eliminating incandescent lamp imports.
Despite rapid adoption, further efficiency gains remain possible in the buildings sector. Global floor area has expanded by more than 20% over the past decade, yet electricity consumption for lighting has remained relatively stable due to improvements in lighting efficiency.
Lighting is now the only major end use in buildings where efficiency gains have largely offset growth in floor space and population. Electricity demand in buildings has increased primarily in other areas such as space cooling and data centre operations.
The services sector currently represents the largest share of lighting related electricity demand in buildings. Although LEDs are common in new construction, retrofitting existing commercial buildings can be complex due to ceiling access, rewiring requirements and the need for new fixtures. As a result lighting upgrades are often implemented during broader building renovation programmes rather than as standalone projects.
In residential markets LED adoption is already high, but replacements are typically driven by product failure rather than proactive upgrades. Consumers often wait until older lamps stop working before switching to newer technologies, with affordability and product availability influencing purchasing decisions.
The efficiency improvements delivered by LED lighting have already prevented a significant increase in electricity demand. Without advances in lighting technology and market penetration over the past decade, residential lighting consumption would be more than 500 TWh higher today, roughly equivalent to the total electricity demand of South Korea. In the services sector indoor lighting consumption would be about 800 TWh higher, exceeding the entire electricity consumption of Africa.
Combined, these avoided increases represent about 70% more electricity consumption for indoor lighting in buildings.
Further improvements remain achievable. The average efficiency of LED products has roughly doubled since 2015, while the most advanced models can reach up to 230 lumens per watt. Many buildings however still rely on earlier generation products installed several years ago, leaving significant efficiency potential untapped.
Additional opportunities exist across all sectors. In many emerging markets LED penetration remains relatively low and around 30% of residential lamps globally still use older technologies. This creates an opportunity for countries to leapfrog directly to high efficiency lighting.
At the same time nearly 15% of residential LED lamps worldwide are early generation products that are approaching the end of their operational lifetime. Their replacement with more advanced lighting systems could deliver another wave of efficiency improvements.
Outdoor lighting infrastructure also presents major opportunities. Municipal street lighting retrofits can deliver rapid payback periods when large scale LED upgrades are implemented. However fragmented ownership structures, ageing infrastructure and limited procurement capacity often slow deployment.
Industry experts say capturing the next stage of LED efficiency gains will depend on improvements in product design, system performance and financing models.
Future lighting systems are expected to focus increasingly on circular design principles. Modular products that allow components such as drivers, optics and control systems to be replaced can extend product lifetimes and reduce waste. Repairability and refurbishment can also lower material demand while improving supply chain resilience.
System level performance improvements will also play a critical role. Technologies such as occupancy sensors, daylight detection and building management integration can significantly reduce energy consumption, particularly in commercial buildings. Direct current lighting systems may further reduce energy conversion losses in buildings equipped with on-site renewable power.
However fragmentation across smart lighting platforms remains a challenge, as many systems rely on proprietary software and hardware that limit interoperability.
Affordability remains another key factor. While LED prices have declined significantly over the past decade, advanced products equipped with smart controls can still cost several times more than basic models. In low income markets this upfront cost can slow adoption even when lifetime energy savings are substantial.
New financing models including low interest loans and Lighting as a Service programmes are emerging as potential solutions. At the same time governments are expected to tighten efficiency standards to ensure that the latest performance improvements reach global markets.
Industry collaboration is also expanding. Initiatives such as the ELECT Project in Zambia and international cooperation platforms are supporting knowledge sharing, technology benchmarking and the development of global best practices.
As the lighting sector evolves, analysts believe that combining smart technology, circular product design and innovative financing could unlock a new phase of efficiency gains while supporting broader electrification across buildings and urban infrastructure.
Author: Bryan Groenendaal
Link to the original IEA article HERE
