Daylight Market - Global Outlook & Forecast 2023-2028

INDUSTRY OVERVIEW

The global daylight market was valued at USD 283.92 billion in 2022 and is expected to reach USD 401.82 billion by 2028, growing at a CAGR of 5.96% during the forecast period. Daylighting involves strategically positioning elements like windows, skylights, curtain walls, and reflective surfaces to harness natural light effectively for building interior illumination. The daylight market report covers products integral to daylighting interiors, such as windows, skylights, and glass curtain walls. Daylight systems have extensive applications in newly constructed and renovated buildings or residences. The report encompasses daylighting systems in various settings, including residential and commercial buildings. Commercial structures encompass sectors such as hospitality, corporate offices, healthcare facilities, educational institutions, retail complexes, shopping malls, sports facilities, and more. Further, the daylight market in APAC is expected to experience significant growth as it is characterized by strong economic growth coupled with rising construction activities and increasing disposable income, which has primarily supported the industry growth in the region.

MARKET TRENDS & OPPORTUNITIES

Rising Installation of Roof Lights for Commercial Spaces
The increasing adoption of roof lights in commercial projects can be attributed to their ability to enhance natural daylight, consequently reducing the reliance on artificial lighting. Roof lights, which are windows installed on a building's roof to optimize the inflow of natural light, have traditionally found use in large commercial settings like warehouses and offices with high ceilings or those lacking attic space. In other words, roof lights are specialized architectural features installed in the roof or ceiling of commercial buildings to harness and optimize natural light. However, due to their multiple advantages, beyond just augmenting daylight, roof lights are now gaining substantial consideration for use in residential properties. In addition, roof lights are integral to sustainable building practices, as they reduce a building's environmental impact. As businesses and building owners increasingly prioritize sustainability, installing roof lights has become a strategic choice to reduce carbon emissions, meet sustainability goals, and support the daylight market growth.

Growing Sustainable and Green Buildings
The growing focus on sustainable and green building practices is a significant driver of the global daylight market. Sustainable and green building principles prioritize energy efficiency, environmental responsibility, occupant well-being, and resource conservation. Sustainable and green building practices aim to minimize energy consumption. Daylight systems reduce the need for artificial lighting during daylight hours, leading to significant energy savings and lower operational costs for building owners. Many sustainable certifications and local building codes require minimum daylighting and energy-efficient lighting systems. This encourages the adoption of daylighting solutions in green buildings.

INDUSTRY RESTRAINTS

High Cost of Installation
Although daylighting can provide numerous positive results regarding energy efficiency and worker performance, a high-performance system requires a significant initial investment, which is considered the major challenge for daylight market growth. However, while implementing an integrated and strategic design approach, a company can allow overall long-term savings, making up for the initial investment in daylighting systems. Installing skylights, light tubes, and curtain walls is generally more expensive, depending on the building design and material used.

The primary factor that challenges daylight market growth is profit or return on investments. Daylighting represents only a small share of the lighting market, which offers growth opportunities. However, the profit motive and the marketing machine behind the electric luminaires are stronger and easier to quantify. Thus, like other renewable resources, daylighting also suffers from the owner-tenant riddle, where although the facility owner invests, the tenant earns the benefits.

SEGMENTATION INSIGHTS

INSIGHTS BY PRODUCT
The global daylight market by product is segmented into windows, curtain walls, and skylights. The Windows product segment dominated the global industry in 2022. The growth of the windows market is attributed to higher spending on new offices and commercial buildings in China and the growth of residential construction in the US. The U.S. and China are expected to account for 65% of the global window sales growth and demand. Further, new residential construction is estimated to account for most of the demand in 2022, and this trend is expected to continue during the forecast period. The MEA region is expected to witness the fastest growth for windows, supported by the rise in residential construction, growing income levels, and rural-to-urban migration. 

INSIGHT BY INSTALLATION
The replacement installation segment held the most prominent share of the global daylight market in 2022. With the remodeling and reconstruction of residential spaces, most homeowners are focused on upgrading their living standards by adopting daylight systems or skylights to decrease electricity use and feel the natural sunlight. These products can be easily re-installed in a building, providing extensive benefits for end users. Thus, the interest in electricity or light renovation projects is expected to fuel the segmental market growth during the forecast period. Further, the growing demand for photovoltaic, smart, and electric daylight systems drives replacement demand. Replacement demand originates from all commercial, industrial, and residential sectors. Daylight systems are frequently found in historic industrial buildings and are often a significant portion of the roof.

INSIGHT BY END USER
The residential end-user segment dominated the global daylight market in 2022. The rising global population and shrinking size of households are driving the demand for housing facilities. To meet the rising demand, governments worldwide are implementing policies to support the construction of residential units. Other major emerging markets for residential construction include China, India, Germany, Australia, Indonesia, Brazil, the UAE, and Saudi Arabia. Further, initiatives by the U.S. and Europe to decrease the overall energy consumption in residential and commercial buildings are driving daylight installation growth. Further, retail and corporate offices primarily drive the daylight market among commercial properties. Retail buildings accounted for approximately 25% of the industry share, and corporate offices accounted for around 31% in 2022. Hospitality was the fastest-growing market for commercial daylighting and is estimated to grow at a CAGR of 7.39% during the forecast period.

INSIGHT BY DISTRIBUTION CHANNEL
The global daylight market by Distribution Channel is segmented into offline and online. The offline channels are the most significant distribution channels and dominate the global daylight market. Several stores are located in the central parts of several localities and attract a considerably large customer base. Consumers in different countries prefer B2B stores to purchase daylight products. Therefore, major daylight product sales occur at B2B supermarkets and hypermarkets—the offline channel witnesses high sales due to distributors' use of the Direct-to-Consumer (DTC) model. Further, distribution via retail stores is a substantial revenue-generating opportunity for several vendors in the global daylight market. Retail stores, in general, are a significant market-capturing platform for several vendors in the industry. It is equally important for vendors to pitch and promote their products in such a manner that enables them to earn brand loyalty from consumers.

GEOGRAPHICAL ANALYSIS

The global daylight market is primarily stimulated by installing new daylight systems in new construction projects and replacing existing ones. Daylight systems find applications across various sectors, including residential and commercial spaces such as retail, hospitality, recreational facilities, hospitals, educational institutions, government facilities, workspaces, and offices. They are considered an effective means for buildings to meet sustainability standards as they provide ample natural light, reducing or eliminating the need for electric lighting during daylight hours. In commercial buildings, incorporating daylighting can also lead to a 10-20% reduction in cooling energy consumption. Europe and the U.S. are witnessing a heightened focus on energy efficiency, driving increased adoption of daylighting in these regions.

Furthermore, the daylight market's growth is bolstered by infrastructural development, renovations, and remodeling of existing commercial and residential structures. In mature markets like North America and Europe, growth primarily stems from innovations introduced by key industry players. In emerging markets, rapid infrastructure development and increased construction output propel the global daylight market's expansion.

COMPETITIVE LANDSCAPE

The global daylight market is highly competitive, with the presence of a large number of public and private companies. These vendors typically compete on key parameters such as product design, quality, reliability, support services, and price. The rapid technological advancements adversely impact the market vendors as consumers expect continuous innovations and product upgrades. The present scenario drives vendors to alter and refine their unique value proposition to achieve a strong industry presence. Some of the major vendors dominating the global daylight market include Velux, Brett Martin, and Lamilux Heinrich Strunz Holding. These brands have many product offerings with a widespread presence in the global industry. The major vendors are adopting innovative technologies to retain their strong industry position.

The global key vendor, Velux, introduced innovative smart skylight technology. These skylights have features that can monitor air quality, humidity, and temperature. They are also equipped with Netatmo intelligence technology. These skylights have ‘plug and play’ smart home solutions for remote sensor-based operation. They automatically detect the sunlight level, humidity, temperature, and carbon dioxide levels to adjust the opening and closing of valves and motorized shades. The system can automatically recognize the need for fresh air and open the skylight without any program or remote operation. It also closes skylights automatically when it rains. The smart algorithm feature sets the skylights to open in the morning and close when the occupants leave home with just one tap. These skylights include a Wi-Fi gateway and an iOS and Android control app.

The presence of diversified global and regional vendors characterizes the global daylight market. As international players increase their market footprint, regional vendors will likely find it increasingly difficult to compete with global players. The daylight market competition is expected to intensify further with increased product/service extensions, technological innovation growth, and mergers and acquisitions. Arizton believes global players would grow inorganically by acquiring regional or local players in future years.