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Bright forecast for LED lighting

A decade from now, LED installations will account for almost half of the commercial lamp market, especially in outdoor settings, says Pike Research.

LEDs are about to have their day in the sun.

By 2020, nearly half (46 percent) of the $4.4 billion commercial lighting business will be given over to LED lighting, according to a Pike Research report released Wednesday, "Energy Efficient Lighting for Commercial Markets."

The 6th Street Bridge in LA now basks in the light from LEDs. City of Los Angeles/Bureau of Street Lighting

Because of their energy-frugal characteristics, LEDs (light-emitting diodes) have always had the potential to save commercial properties a significant amount of money on their electricity bills. However, the initial expense of the lighting systems have made LEDs cost-prohibitive in many situations. Not so anymore, according to Pike Research.

The prices for commercial solid-state lighting systems have come down and will continue to decline enough to make them a practical and attractive option for commercial properties. There are federal and local government incentives to install LEDs in new buildings and as retrofits in existing properties. For these reasons, people can expect to see a significant increase in the use of LED lamps for commercial and industries properties, according to Pike Research.

The shift to LED installations will start outdoors.

LEDs, which have already seen an increase in installation for traffic lights and exit signs, will saturate the market for outdoor lighting within a few years, according to Clint Wheelock, managing director at Pike Research.

One doesn't have to look to hard to see anecdotal evidence of this already happening. An abundance of U.S. cities and towns have been announcing programs to install LEDs for municipal lighting. In one notable example, the Bureau of Street Lighting for the city of Los Angeles has been replacing much of LA's municipal lighting with LEDs, including all 209,000 streetlights. As a result of the change, LA has started to give off a different glow at night in addition to seeing a 40 percent reduction in its annual energy consumption for public lighting.