Horticulture Lighting Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

Global Horticulture Lighting Market Trends and Insights

Precision-tuned LED Spectra Elevating Cannabis Economics

Research trials show that white light with dual red peaks at 640 nm and 660 nm increases bud weight and light-use efficiency versus single-peak systems.^{[2]Frontiers in Plant Science, “Optimizing Growth and Cannabinoid Accumulation in Cannabis,” frontiersin.org} Far-red supplementation shortens the daily lighting cycle from 12 hours to 10 hours while preserving cannabinoid content, trimming a further 5.5% in power use. Commercial growers therefore view spectral recipes as proprietary IP, and willingly pay 30-40% price premiums for cannabis-optimized fixtures. Premium pricing shields suppliers from commodity margin pressure and attracts new venture capital to the horticulture lighting market. Ongoing legalization across U.S. states and Germany’s adult-use bill will lock in multi-year demand visibility.

Urban Food-Security Programs Accelerate Vertical-Farm Growth

Asian megacities champion vertical farming to offset land scarcity and import dependence. Dubai’s GigaFarm project targets 3 million kg annual output using stacked hydroponic towers lit exclusively by LEDs. The UAE alone aims to commission 500 vertical farms by 2026. Taiwan’s Everlight and Fucai leverage geographic proximity to supply tailored luminaires, cutting lead times and logistics costs for regional growers. Because lighting represents 25-45% of vertical-farm opex, every incremental efficiency gain feeds directly into profit margins. As a result, the horticulture lighting market finds its highest unit growth in compact, city-centric farms rather than traditional greenhouses.

EU Fit-for-55 Directive Catalyzes Retrofit Wave

The revised Energy Performance of Buildings Directive obliges heated glasshouses to replace legacy lamps with connected LEDs as part of 2050 decarbonization targets.^{[3]Signify, “Revised EPBD Positions Connected LED Lighting as Key Efficiency Lever,” signify.com} Effective February 2025 bans on mercury-based fluorescents further accelerate change xrite.com. Dutch pilot trials show full-LED tomato houses cut heat input 40% without yield loss agritechtomorrow.com. Capital budgets freed by lower energy bills shorten payback times to three years or fewer, erasing the last economic objections. For vendors, Europe supplies a high-volume replacement pipeline that smooths revenue even when new-build activity slows.

Corporate ESG Green Bonds Unlock Capital for Smart Lighting

Growers tap ESG-linked debt instruments to finance large-scale retrofits that align with carbon and water neutrality pledges. RED Horticulture closed a EUR 17 million Series A in 2024 to commercialize AI-driven lights that promise 60% energy savings and 35% yield gains. Investors prize transparent impact metrics, and LED upgrades deliver quantifiable CO₂ avoidance. As more sustainability funds enter agriculture, the horticulture lighting market gains a diversified funding base beyond traditional equipment loans, reinforcing demand even during macro-economic slowdowns

Material Cost Inflation Squeezes Fixture Margins

Aluminium heat sinks account for up to 30% of bill-of-materials in high-power grow lights. Spot prices rose 28% year-on-year, while rare-earth phosphors jumped in tandem, eroding gross margins for fixture makers. US-China tariffs of 104% on lighting components further inflated landed costs for North American importers.^{[4]Inside Lighting, “Industry Rattled as U.S.-China Tariffs Hit 104%,” inside.lighting} Vendors now dual-source from Vietnam and India, yet shipment rates doubled to more than USD 200,000 per container, limiting savings. Smaller firms defer capital investment, slowing innovation cadence and reducing competitive intensity in the horticulture lighting industry.

Photobiological Safety Compliance Delays Product Launches

Under IEC 62471, lamps sold in the EU must undergo blue-light-hazard testing and risk-group certification before market entry. Each spectrum variant can cost EUR 50,000-200,000 in lab fees and documentation.^{[5]Luminus Devices, “Understanding IEC 62471 Eye Safety Risk Groups,” luminusdevices.zendesk.com} Start-ups lacking in-house regulatory teams often skip Europe altogether, narrowing buyer choice and slowing uptake of cutting-edge spectra. For incumbent brands, compliance raises barriers to entry and lengthens amortization for new product platforms, exerting a modest drag on overall horticulture lighting market growth.

Segment Analysis

By Lighting Technology: LED Innovation Sustains Leadership

LEDs held an 80.3% slice of the horticulture lighting market in 2024 on the strength of efficiency gains that cut power bills by up to 60%. The sub-50 W category is on course for an 18.6% CAGR as vertical farms deploy dense, low-heat modules to reach lower canopies. High-power 50-300 W devices continue to dominate greenhouse retrofits, while >300 W engines serve large campus operations requiring high photon flux densities. Fluorescent lamps began a steep phase-out after the February 2025 mercury ban, and plasma systems now sit in specialist niches. Samsung’s stated intent to exit LEDs by 2030 signals that scale alone is insufficient without application-specific expertise.

As LEDs shift from disruptive novelty to essential infrastructure, competitive focus moves to spectral flexibility and software hooks. ams OSRAM’s Q3 2024 results revealed seasonal sales spikes aligned with crop calendars rather than technology adoption curves. Suppliers are therefore synchronizing product launches with planting windows, reflecting a maturing horticulture lighting market. Collaborative R&D between fixture makers and seed breeders is also emerging, aiming to co-optimize genetics and light recipes for maximum yield.

Note: Segment shares of all individual segments available upon report purchase

By Offering: Software-Centric Services Gain Ground

Hardware still captured 91.4% of spending in 2024, reflecting the high upfront cost of fixtures and drivers. Yet the software and services slice is rising at a 20.8% CAGR as growers look beyond simple lumen output to algorithmic control. Platforms such as Sollum’s Smart LED system link crop physiology databases with dynamic dimming to boost productivity. Philips’ GrowWise tie-in with Hoogendoorn’s climate computers bundles lighting, HVAC and irrigation within one dashboard.

Recurring software fees create predictable annuity streams for manufacturers and incentivize continuous feature upgrades. Over time, differentiated analytics could eclipse component efficiency as the chief competitive lever in the horticulture lighting market. Early-mover vendors invest in data science talent, turning decades of photobiology studies into commercial algorithms that command premium pricing.

By Installation Type: New Builds Take the Growth Mantle

Retrofits represented 58.7% of projects in 2024, driven by aging HPS estates racing to meet energy codes. Their share will decline as the pipeline of unconverted greenhouses dries up and new builds expand at 15.2% CAGR. Virginia’s 65-acre Oasthouse Ventures greenhouse, scheduled to open in 2026, is engineered around LEDs from the ground up, highlighting how design freedom improves fixture placement and airflow. Quebec’s demo facilities underscore government appetite for purpose-built, climate-positive agriculture.

New constructions benefit from structural designs that support intra-canopy strings and moving-light rigs impossible in legacy houses. Suppliers such as Current are rolling out slimline modules that tuck between vine rows, translating directly into yield gains. As more developers opt for integrated controls, the horticulture lighting market gains long-term footing in full-stack CEA campuses.

By Cultivation: Cannabis and Specialty Crops Outpace Staples

Vegetables and fruits retained 46.9% share in 2024 due to entrenched greenhouse networks. Nonetheless, cannabis and specialty crops will climb at 17.5% CAGR as legalization and premium pricing justify elaborate light regimens. Trials extending photoperiods to 13 hours boosted inflorescence weight up to 1.5 × versus the 12-hour norm. Specialty herbs, microgreens and saffron also see value in spectrum tuning that enhances active compounds.

Future growth hinges on crop-specific recipes rather than one-size-fits-all luminaires. Vendors that catalogue cultivar responses position themselves for sticky customer relationships and higher average selling prices. Conversely, commodity tomato and cucumber houses will increasingly bid fixtures on cost per photon, reinforcing a dual-speed horticulture lighting market.

By Application: Vertical Farms Narrow the Gap with Greenhouses

Greenhouses controlled 43.2% of demand in 2024 but face growing competition from vertical farms expanding at 19.6% CAGR. Urban sites shorten logistics chains, deliver pesticide-free produce and appeal to institutional investors targeting ESG portfolios. However, light bills can swallow 45% of operating cost, making efficiency paramount. Advanced LEDs with high photosynthetic photon efficacy and granular dimming mitigate this burden.

Research campuses and container farms provide testbeds for edge technologies such as deep-red-enhanced spectra that trim flowering times. Aquaponic stacks marry fish waste nutrient streams with plant production, creating circular systems that rely heavily on precise lighting to balance growth rates. As these diversified formats mature, the horticulture lighting market widens beyond its greenhouse origins.

Geography Analysis

Europe led the horticulture lighting market with a 34.7% share in 2024, sustained by stringent energy mandates and century-old greenhouse clusters in the Netherlands and Germany. Trials proving 40% heat input cuts under full-LED regimes strengthen the economic case even before carbon penalties apply. Subsidies for smart-farm tech in Scandinavia further buoy demand.

Asia-Pacific delivers the fastest growth at 15.3% CAGR to 2030, anchored by China, Japan and Singapore’s vertical-farm roll-outs. Taiwanese LED makers Everlight and Fucai tailor high-margin horticulture SKUs for local integration, supporting a regional horticulture lighting market size expected to top USD 2.06 billion by 2029. Rapid urbanization and food-import reliance make in-city farms politically attractive.

North America shows steady momentum despite tariff-driven cost volatility. Cannabis legalization in additional U.S. states funnels capital into spectrum-specific fixtures that lift cannabinoid yields. South America and the Middle East are nascent but promising: Gulf states pioneer solar-powered greenhouses that cut water use by 70%, showcasing off-grid models transferable to other arid zones.