Lighting-as-a-Service Market in Japan

Lighting-as-a-Service in Japan Trends and Forecast

The future of the lighting-as-a-service market in Japan looks promising with opportunities in the commercial, industrial, and municipal markets. The global lighting-as-a-service market is expected to reach an estimated $5437.2 million by 2031 with a CAGR of 35.6% from 2025 to 2031. The lighting-as-a-service market in Japan is also forecasted to witness strong growth over the forecast period. The major drivers for this market are the increasing global demand for lighting technologies that use less energy, substantial R&D efforts by major organizations in the field, and the rapid adoption of light-emitting diode (LED) technology for energy-efficient lighting.

• Lucintel forecasts that, within the installation category, indoor will remain a larger segment over the forecast period due to its widespread use for impactful displays in malls and retail centers, as well as the explosive expansion of the commercial sector in emerging countries.

Emerging Trends in the Lighting-as-a-Service Market in Japan

Lighting-as-a-Service in Japan is highly dynamic, supported by the country’s focus on sustainability, technological innovation, and energy efficiency. As businesses and municipalities pursue cost-effective, smart lighting, these trends are reshaping the landscape. From automation advances to increased attention to energy savings, these trends are not only changing the lighting infrastructure but also emphasizing environmental consciousness.

• Smart Lighting Integration: Japan is adopting intelligent lighting that uses IoT, allowing lighting operations to be monitored and optimized in real-time. This advanced technology reduces energy management costs, decreases maintenance costs, and boosts user experience. With the growth of smart cities in Japan, energy consumption and operational efficiency are markedly reduced by incorporating IoT-based lighting systems. These systems can automatically adjust brightness based on environmental conditions, minimizing energy wastage. They also generate data for predictive maintenance, improving the sustainability of lighting infrastructure overall.
• Sustainability and Energy Efficiency: Concerns about climate change are increasingly driving Japanese businesses and municipalities to adopt energy-efficient lighting solutions. Lighting-as-a-service is rapidly gaining popularity as a green alternative to the traditional lighting model. As a global leader in sustainability, Japan has strong sustainable practices. This translates to a high demand for energy-efficient lighting. Through Lighting-as-a-Service, organizations do not need large upfront payments when upgrading lighting systems. As Japan adopts such services, energy consumption will decrease, and carbon emissions will be reduced, further advancing its sustainability goals. Energy-efficient lighting remains a crucial market trend.
• Government Incentives for Green Technologies: Japanese government policies strongly promote green technologies. Policies such as regulatory support for lighting technology that increases energy efficiency can boost the demand for Lighting-as-a-Service. The Japanese government also offers financial incentives and subsidies to businesses and municipalities that adopt energy-efficient lighting solutions. This lowers the cost and enhances the attractiveness of Lighting-as-a-Service, further driving its adoption. Such incentives are key to making green technologies more accessible, aligning with national efforts to reduce carbon emissions and promote sustainable development in Japan.
• Aging Infrastructure Upgrades: Aging infrastructure in Japan is driving a large-scale push to modernize lighting systems in public spaces and government buildings. Lighting-as-a-Service offers a cost-effective solution for these upgrades. Much of Japan’s lighting infrastructure is decades old, necessitating upgrades to more energy-efficient, advanced systems. Lighting-as-a-Service facilitates these upgrades without large capital investments because the service is provided on a subscription basis. This trend supports Japan’s efforts to modernize its infrastructure while maintaining financial sustainability.
• Renewable Energy Integration: Japan is integrating renewable energy sources into Lighting-as-a-Service as it seeks to minimize reliance on conventional energy grids and promote sustainable practices. Integrating solar power and other renewable sources into Lighting-as-a-Service models allows Japanese businesses and municipalities to reduce their environmental footprint and simultaneously save on energy costs. This aligns with Japan’s initiatives towards renewable energy production. Other benefits of such bundled systems include cushioning the rising cost of energy.

Emerging trends such as smart lighting integration, a focus on sustainability and energy efficiency, government incentives, infrastructure upgrades, and the integration of renewable energy sources are changing the lighting-as-a-service market in Japan. These trends not only provide cost-effective, sustainable solutions but also align with Japan’s broader environmental goals. As these trends continue to evolve, they are positioning Japan as a leader in innovative and sustainable lighting solutions, shaping the future of the industry.

Recent Developments in the Lighting-as-a-Service Market in Japan

The Japan lighting-as-a-service market has been transformed by a wave of significant recent developments. Focused on sustainability, efficiency, and advancements in technology, the market continues to grow rapidly. These developments are fueled by the search for cost-effective methods, government green technology policies, and Japan’s commitment to becoming a carbon-neutral society.

• Mass Adoption of IoT-Based Lighting Systems: Japan is accelerating the adoption of IoT-based smart lighting systems, offering real-time monitoring, dynamic lighting control, and improved energy efficiency. IoT-based lighting solutions are gaining prominence in Japan. This allows municipalities and businesses to monitor energy usage in real-time, adjust lighting settings, and track maintenance needs. This development will result in substantial energy savings and reduced operational costs. Japan is thus moving toward smart, efficient lighting infrastructure by embracing these systems.
• Government Support for Energy-Efficient Lighting Solutions: The Japanese government has been encouraging energy-efficient lighting systems by providing financial incentives to stimulate the growth of Lighting-as-a-Service. The Japanese government, through various initiatives such as subsidies and tax incentives, has eased the adoption of energy-efficient lighting solutions for businesses and municipalities. These policies have fast-tracked the transition to Lighting-as-a-Service models. They help offset installation costs while promoting sustainable technologies. Continued government support is expected to further accelerate market growth.
• Partnerships Between Lighting Providers and Renewable Energy Firms: The introduction of renewable energy into lighting systems is a significant development in Japan’s lighting-as-a-service market. This is happening through partnerships with renewable energy firms. Lighting solution providers and companies developing renewable energy products are collaborating to integrate solar and wind energy. This development enables businesses and municipalities to reduce reliance on traditional energy sources to achieve sustainability. It also provides flexibility in energy management, making it highly attractive to the eco-conscious market in Japan.
• Smart City Initiatives Expanding Across Japan: Japan’s focus on creating smart cities is driving the implementation of Lighting-as-a-Service solutions in urban areas. These solutions are integral to creating more energy-efficient and connected cities. A growing number of smart city projects in Japan has created significant demand for Lighting-as-a-Service. These solutions are part of larger urban modernization initiatives that aim to reduce energy usage, enhance security, and improve the quality of life for residents. As more smart cities are developed, Lighting-as-a-Service will become an integral part of these urban ecosystems.
• Sustainable Business Practice Focus: Given the environmental concerns, many businesses in Japan have shifted toward a sustainable model that includes adopting Lighting-as-a-Service. Japanese companies are increasingly prioritizing sustainability in their operations. Eco-friendly lighting systems have become the preferred choice because they reduce environmental impact and lower costs by adopting Lighting-as-a-Service models. This shift reflects a commitment to corporate social responsibility and focuses on green technologies for long-term sustainability goals.

The progress of Japan in adopting IoT-based lighting systems, government support for efficient lighting, collaboration with renewable energy companies, smart city implementation, and commitment to sustainable business practices is transforming the market. These advancements are bringing smart, sustainable, and cost-effective lighting solutions to the country, with Japan leading the global shift toward more efficient lighting. Furthermore, these developments are expected to drive further growth in Japan’s lighting-as-a-service market.

Strategic Growth Opportunities for Lighting-as-a-Service Market in Japan

The lighting-as-a-service market in Japan provides various growth opportunities through technological advancement, sustainability, and regulatory support. With increasing energy efficiency and cost-effectiveness, businesses and municipalities are finding Lighting-as-a-Service to be a popular option. Opportunities include smart city projects, industrial and commercial sectors, and other applications. Growth opportunities are seen through innovative lighting solutions that meet sustainability, energy efficiency, and advanced technology demands.

• Integration with smart cities: As cities in Japan embrace smart infrastructure, there is space for Lighting-as-a-Service providers to integrate lighting solutions within these systems. Connected, efficient lighting requires smart cities and a system that can be controlled remotely and adjusted according to environmental needs. The purpose of this service in such projects includes flexibility, energy savings, and easy management. As the demand for IoT grows in cities undergoing urbanization, prospects for these services are becoming more valuable.
• Industrial sector upgrades: More and more manufacturers and factories in Japan are upgrading to Lighting-as-a-Service to improve energy efficiency in their industries. With the growing need for energy-efficient and cost-effective lighting in industrial environments, Lighting-as-a-Service offers the perfect solution. This sector benefits from lower energy consumption, reduced maintenance costs, and the ability to upgrade lighting without upfront investment. These services align with Japan’s industrial focus on reducing environmental impact and improving operational efficiency.
• Government buildings and infrastructure: Japan’s old infrastructure presents an opportunity for the government to replace the lighting system with Lighting-as-a-Service. By modernizing public infrastructure, the Japanese government can achieve its goals at lower costs through Lighting-as-a-Service. Government buildings, public spaces, and transportation hubs are ideal candidates for such solutions. The government can reduce operational costs and contribute to sustainability goals by upgrading to energy-efficient lighting without significant capital investments.
• Retail sector adoption: As the number of retail outlets, malls, and public spaces grows, Lighting-as-a-Service is increasingly used to enhance the quality of lighting while saving energy. The retail sector in Japan opts for energy-efficient lighting solutions both for aesthetic and operational purposes. High-footprint retail spaces benefit from LED lighting systems because they require less maintenance and are energy-efficient. Lighting-as-a-Service offers a low-cost, capital-expenditure-free way to upgrade lighting and enhance the customer experience.
• Corporate sustainability initiatives: Lighting-as-a-Service offers an opportunity to improve the sustainability of Japanese corporations by saving energy costs and reducing carbon footprints. Pressure is mounting on Japanese companies to focus more on sustainability. One of the best ways to respond to this pressure is through the adoption of Lighting-as-a-Service. With energy-efficient and environmentally friendly lighting solutions, companies can cut operating costs while supporting broader climate goals in Japan. This opportunity has been magnified by increasing corporate responsibility efforts and growing interest in green technology.

Strategic growth opportunities in the market for Lighting-as-a-Service in Japan are driven by smart city integration, industrial sector upgrades, government building modernizations, retail sector adoption, and corporate sustainability initiatives, all of which align with Japan’s broader goals of improving energy efficiency, sustainability, and technological innovation. As trends evolve, Lighting-as-a-Service will become an increasingly attractive solution to help Japan achieve its objectives while fostering economic growth and environmental responsibility.

Lighting-as-a-Service Market in Japan Driver and Challenges

Various technological, economic, and regulatory factors shape the Japanese lighting-as-a-service market, presenting both challenges and opportunities. Key drivers include advancements in energy-efficient lighting technology, government policies supporting sustainability, and the demand for smart infrastructure. However, challenges such as high initial costs, regulatory barriers, and competition from traditional lighting solutions create significant obstacles to broad adoption. To navigate this landscape successfully, drivers and challenges must be well understood.

The factors responsible for driving the Lighting-as-a-Services market in Japan include:
• Technological advances in lighting: Advances in LED technology and smart lighting innovation are major reasons for Japan’s adoption of Lighting-as-a-Service. Technological innovation in Japan has brought LED technology and smart lighting systems, making Lighting-as-a-Service more efficient and affordable. These technologies can offer more accurate control, reduced energy consumption, and higher performance. Adding IoT to these systems increases demand for flexible, adaptive, and smart lighting services.
• Energy policies by the Japanese government targeting energy savings: Lighting-as-a-Service thrives in a supportive environment. The Japanese government has implemented policies to promote energy efficiency across sectors, making them a major driver for the lighting-as-a-service market. Government incentives, tax breaks, and regulations related to carbon emission reduction are making it more attractive for businesses and municipalities to opt for energy-efficient lighting systems. These initiatives support the broader goals of sustainability and reduced environmental impact.
• Cost savings and operational efficiency: The business-to-business, industrial, and public sectors require cost-saving solutions, and the Lighting-as-a-Service model is responding to these demands. Japanese businesses and public institutions have always sought ways to cut costs while improving efficiency. Lighting-as-a-Service offers an easy way to deliver energy-efficient lighting without capital expenditures. The pay-per-use model reduces financial barriers, allowing a broader range of organizations to adopt it. Eventually, savings come from reduced energy usage and maintenance expenses.
• Increasing demand for sustainable solutions: Growing concern about climate change and the urgent need for sustainability is driving companies to adopt energy-efficient lighting systems. With increasing global awareness about environmental concerns, businesses in Japan must reduce their carbon footprints. Lighting-as-a-Service fits well within this context of sustainability and energy efficiency. It allows companies to meet sustainability objectives without incurring the high costs usually associated with environmental upgrades, making it an attractive solution for various industries.
• Smart infrastructure developments: The growth of smart cities and smart buildings in Japan is driving demand for advanced lighting systems. The rapid growth of smart cities in Japan is increasing the demand for connected and efficient lighting solutions. Lighting-as-a-Service fits perfectly into the smart infrastructure ecosystem, offering scalable and adaptable lighting systems that can be integrated into IoT networks. This trend is expected to continue as Japan modernizes its urban environments and infrastructure.

Challenges in the Lighting-as-a-Services market in Japan are:
• High initial investment costs: The initial investment required for the transition to Lighting-as-a-Service is too high for most businesses, despite the obvious long-term savings. One of the major barriers to adopting Lighting-as-a-Service in Japan is the high initial investment needed to transition from traditional lighting systems to advanced LED and smart lighting solutions. Although the subscription-based model reduces some financial burdens, the upfront cost of installation and retrofitting may be a major barrier for smaller businesses or public institutions with limited budgets.
• Regulatory hurdles: Regulatory requirements and compliance issues can hinder the general acceptance of new lighting technologies. The complexity of navigating regulatory frameworks when adopting Lighting-as-a-Service can be challenging. Strict certification requirements and rigid government regulations involving energy efficiency and environmental impact may delay the integration of these systems. Local rules and regulations concerning lighting installations and maintenance present further challenges in the deployment process for service providers.
• Competition from traditional lighting models: Traditional lighting systems and solutions still offer direct competition to Lighting-as-a-Service. Lighting-as-a-service is growing globally, but many sectors still prefer older lighting systems, such as direct purchasing or renting contracts. The traditional system remains a familiar and comfortable environment for businesses, which can create reluctance to switch. Additionally, the benefits of Lighting-as-a-Service may not be clear enough for businesses to make the change.

Major drivers and challenges for Lighting-as-a-Service in Japan include technological advancements, government support, the demand for cost-effective solutions, green trends, smart infrastructure development, high capital investment costs, regulatory complexities, and competition from traditional models. As these factors continue to influence the market, more businesses and municipal corporations will seek lower costs and increased sustainability, leading to higher adoption of Lighting-as-a-Service.

List of Lighting-as-a-Service Market in Japan Companies

Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies, lighting-as-a-service companies cater to increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the lighting-as-a-service companies profiled in this report include:
• Company 1
• Company 2
• Company 3
• Company 4
• Company 5
• Company 6
• Company 7
• Company 8
• Company 9
• Company 10

Lighting-as-a-Service Market in Japan by Segment

The study includes a forecast for the lighting-as-a-service market in Japan by installation, component, and end use.

Lighting-as-a-Service Market in Japan by Installation [Analysis by Value from 2019 to 2031]:

• Indoor
• Outdoor

Lighting-As-A-Service Market by Component [Analysis by Value from 2019 to 2031]:

• Luminaries and Control Equipment
• Software and Communication Systems
• Maintenance Services

Lighting-as-a-Service Market in Japan by End Use [Analysis by Value from 2019 to 2031]:

• Commercial
• Industrial
• Municipal
• Others

Features of the Lighting-as-a-Service Market in Japan

Market Size Estimates: Lighting-as-a-service in Japan market size estimation in terms of value ($B).
Trend and Forecast Analysis: Market trends and forecasts by various segments.
Segmentation Analysis: Lighting-as-a-service in Japan market size by installation, component, and end use in terms of value ($B).
Growth Opportunities: Analysis of growth opportunities in different installation, component, and end use for the lighting-as-a-service in Japan.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the lighting-as-a-service in Japan.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.

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FAQ

Q1. What are the major drivers influencing the growth of the lighting-as-a-service market in Japan?
Answer: The major drivers for this market are increasing demand worldwide for lighting technologies that use less energy, substantial R&D efforts carried out by the major organizations in the field, and quick adoption of light-emitting diode (LED) technology for energy-efficient lighting.
Q2. What are the major segments for lighting-as-a-service market in Japan?
Answer: The future of the lighting-as-a-service market in Japan looks promising with opportunities in the commercial, industrial, and municipal markets.
Q3. Which lighting-as-a-service market segment in Japan will be the largest in future?
Answer: Lucintel forecasts that indoor will remain the larger segment over the forecast period because it is widely used for impactful displays in malls and retail centers, and commercial sector’s explosive expansion in emerging countries.
Q4. Do we receive customization in this report?
Answer: Yes, Lucintel provides 10% customization without any additional cost.

This report answers following 10 key questions:

Q.1. What are some of the most promising, high-growth opportunities for the lighting-as-a-service market in Japan by installation (indoor and outdoor), component (luminaries and control equipment, software and communication systems, and maintenance services), and end use (commercial, industrial, municipal, and others)?
Q.2. Which segments will grow at a faster pace and why?
Q.3. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.4. What are the business risks and competitive threats in this market?
Q.5. What are the emerging trends in this market and the reasons behind them?
Q.6. What are some of the changing demands of customers in the market?
Q.7. What are the new developments in the market? Which companies are leading these developments?
Q.8. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.9. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.10. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?
For any questions related to Lighting-as-a-Service Market in Japan, Lighting-as-a-Service Market in Japan Size, Lighting-as-a-Service Market in Japan Growth, Lighting-as-a-Service Market in Japan Analysis, Lighting-as-a-Service Market in Japan Report, Lighting-as-a-Service Market in Japan Share, Lighting-as-a-Service Market in Japan Trends, Lighting-as-a-Service Market in Japan Forecast, Lighting-as-a-Service Companies, write Lucintel analyst at email: helpdesk@lucintel.com. We will be glad to get back to you soon.