Factors such as the increasing government support for energy-efficient lights, decriminalizing of marijuana for medical purposes in several countries, and soaring demand for agricultural products will fuel the horticulture lighting market at a CAGR of 18.1% during 2020–2030 (forecast period). The market stood at $3.2 billion in 2019, and it is expected to reach $20.3 billion by 2030. Moreover, the booming world population and increasing popularity of vertical farming will facilitate the market growth in the foreseeable future.
The rising adoption of vertical farming will fuel the horticulture lighting market growth in the coming years. The reduction of arable land is pushing farmers to make the optimum use of whatever space they get, to meet the growing needs of the booming population. Vertical farming encompasses the cultivation of crops indoors, in layers stacked above each other, with artificial lighting providing the illumination. This technique has the potential to reduce the requirement for water by almost 90%, decrease the requirement for soil, and make the optimum use of limited space.
The most important factor behind the market growth is the booming world population. According to the United Nations Department of Economic and Social Affairs (UNDESA), the global population is estimated to grow from 7.7 billion in 2019 to 8.5 billion in 2030. Much of this population boom will be reflected in the U.S., Brazil, India, and China. Owing to this exponential surge, the demand for food will also escalate in the coming years. Due to this reason, numerous countries have started focusing on indoor and greenhouse farming techniques to increase their agricultural production.
Additionally, the developing countries hold immense potential for the players of the horticulture lighting market. Currently, the usage of artificial lights is quite low in the agriculture sector, especially in South Africa, India, and Brazil, but the soaring popularity of the indoor crop cultivation and horticulture concepts will amplify the usage of such lights in the coming years. The large-scale adoption of such lighting products in these nations might reduce their costs in the future. Moreover, the governments of these countries are extending their support to light-emitting diodes (LED), to conserve energy.
The categories under the technology segment of the horticulture lighting market include LED, high-intensity discharge (HID), fluorescent, and others. Among these, the LED category held the largest share in 2019, as the LED technology is quite cost-effective, which is why its usage is rising in indoor and greenhouse agriculture. The intensity of such lights is apt for the growth of plants, which helps in improving the quality of the produce. These lights consume lesser energy than incandescent, fluorescent, and HID bulbs, therefore continue to gather support from the government.
During the forecast period, Europe will dominate the horticulture lighting market, owing to the leading position held by this region in terms of the production and export of flowers, vegetables, and fruits. Moreover, the presence of horticulture light providers, like Heliospectra AB, Signify N.V., and Osram Licht AG, will stimulate the region’s growth. Whereas Asia-Pacific (APAC) will display the fastest growth., which can be ascribed to the robust surge in the disposable income and population, which is resulting in the shift toward indoor and greenhouse farming.
Thus, the escalating global population and growing popularity of vertical farming are expected to propel the market growth in the forecast years.
