Horticulture Lighting Market Growth Industry Analysis

The global horticulture lighting market is projected to reach USD 9.4 billion by 2027, it is expected to grow at a CAGR of 24.5% during the forecast period.

The key factors fueling the growth of this market include rising number of government initiatives to promote the adoption of CEA practices and SSL technology, growing demand for food owing to the continuously increasing population, increased funding to develop vertical farms and greenhouses, and ongoing legalization of cannabis cultivation.

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Horticulture lighting Market Dynamics

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Driver: Strong government support for controlled-environment agriculture (CEA) practices and adoption of SSL technology

Controlled-environment agriculture (CEA) has grown beyond a niche technology and has now become a tangible option for increasing food security while protecting the environment. Fueled by year-round market demand for local food, as well as by advancements in vertical farming and greenhouse technology, CEA technology is being adopted at a rapid rate to optimize the use of space, energy, water, labor, and capital. In CEA, plants are grown in a controlled environment, such as greenhouses, indoor farms, or vertical farms, for the efficient production of fresh, high-quality fruits and vegetables. CEA facilities allow fruits and vegetables to be produced near the population centers where they will be consumed.

Restraint: High setup and installation costs of LED horticulture lights

The use of horticulture lighting is increasing with the rising awareness about the benefits offered by these solutions. Different sources of artificial lights have been used to grow plants indoors. Earlier, HPS and electric ballasts were widely used in indoor farming as effective sources of light. Nowadays, LEDs are in trend; these lights overcome the drawbacks of high-pressure sodium (HPS), fluorescent (FL), metal-halide lights, and electric ballasts. However, the initial capital required for the purchase of good-quality LED lights is higher than that of conventional lighting technologies, such as FL and high-intensity discharge (HID) lamps. This is mainly because each LED light unit contains arrays of LEDs, specially designed for horticultural applications. Often, these units contain different types of LEDs with variation in watts and wavelengths to provide a broad range of light spectrum and intensity for different types of plants. High-powered LED grow lights are available in the market for prices starting from USD 500. A high-quality, full-spectrum LED grow light can be installed as the primary light source for commercial indoor growing.

Opportunity: Consolidating trend of farm-to-table concept

The farm-to-table concept involves bringing local food to restaurants, cafeterias, food joints, and other locations within the same community. There is a growing demand for locally grown food, and the number of diners who are interested in eating such meals is increasing day by day. As the concept has endured, more people have joined in, and there is no doubt that the overall awareness of eating locally grown food has increased nowadays. Thus, the farm-to-table concept is no longer limited to the health-conscious or trend-aware eaters. The desire for more local ingredients could soon be spread into several different markets within the hospitality industry. Horticulture lighting promises timely availability of yield in the case of farm-to-table restaurants. With the help of CEA, food can be made available in the desired quality and quantity although the demand keeps on increasing. The impact of this factor is expected to increase in the coming years owing to the increase in demand for locally grown food.

Challenge: Complexities associated with deployment of controlled environment agriculture technology in large fields and high need for technical know-how

In controlled environment agriculture (CEA), plants require light, water, nutrients, and climate control devices for their growth. These requirements need to be supplied externally at a specific cost. In vertical farms and greenhouse facilities, energy consumed per plant is the same, no matter how large the facility is, for which a well-equipped infrastructure is required. In a nutshell, the cost of capital involved is directly proportional to the area of a greenhouse or vertical facility. Moreover, it is challenging to monitor and maintain these facilities, and highly effective management and maintenance teams are required to manage these facilities. This could affect the profitability of the growers, posing a major challenge for them. The design and development of horticulture lighting fixtures for plant growth are related to their working mechanism. In horticulture lighting systems, different light sources emit light of different spectra as the plant response to light depends on the color of light it receives.