Frost & Sullivan: Uncertainty for the Energy Efficiency Market, But the Lighting Control Sector Appears to Be a Bright Spot

LONDON - “Energy Efficiency” was the buzzword of 2008, and rightfully so. With
high energy prices and the “green” movement in full swing, it made both
economic and social sense to invest in energy saving technologies. Entering
2009, however, the world finds itself in a different economic situation.
Energy prices have declined, and the financial crisis leaves companies with
little or no capital to spend on investments. In light of these new economic
conditions, it is questionable whether the trend toward energy efficiency
will continue. However, Frost & Sullivan believes that the demand for energy
efficiency in buildings will remain a powerful driver in the short and medium
term future.

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When oil prices peaked in 2008, it became clear that measures to reduce
energy consumption were needed. This need, combined with increased
environmental awareness and challenges to meet the rapid growth in global
energy demand, fuelled the growth of the energy efficiency market. Energy
efficiency seemed to be the perfect solution; organizations cut energy
consumption costs by investing in green technology and earned themselves a
greener image which gave them a competitive advantage.

However, in the midst of a recession, oil prices have been falling so
energy efficient technology has lost its appeal as a cost-effective
investment. Sheer lack of capital has caused many organizations to be
reluctant to invest in energy efficient measures. Although a variety of
energy efficient technologies are available, such as the Intelligent Business
System (IBS), which helps organizations seamlessly integrate their physical
equipment layer into their IT network and promises immediate cost reductions,
organizations are unable to come up with the initial costs of such an
investment.

Despite the questionable outlook of the energy efficiency market as a
whole, the European lighting control equipment sector seems to have a bright
future. Spurred by sustained customer investment in solutions for energy
efficiency and combined with technology developments in the broader lighting
equipment markets, the European lighting control equipment market will
experience robust growth up to 2014. The market has grown strongly in recent
years and although the outlook for the next two years is subdued with demand
projected to decelerate, the underlying demand drivers are strong enough to
ensure solid growth in the medium and longer term.

New analysis from Frost & Sullivan
(www.buildingtechnologies.frost.com), European Lighting Control
Systems Market, finds that the market earned revenues of US$620.5 million in
2007 and estimates this to reach US$919.2 million in 2014. The product
sectors included in this research were fixture mounted, wall mounted and
integrated building automation systems (BAS).

At a time when the construction market is in trouble and there is
uncertainty about energy prices in the future, successful competitors will be
those that build their proposition around educating customers about the true
benefits of better lighting control to achieve energy efficiency. The
benefits include both improved environmental performance of the building and
reduced operating costs.

“The environmental issue is growing but when compared to other energy
efficiency technologies, customers are not aware of how much lighting control
systems can contribute to reduce carbon dioxide emissions,” counsels Frost &
Sullivan’s Partner John Raspin. “Suppliers need to work hard on the message
and value proposition as well as push for lighting control to be seen as a
more integrated form of energy management and energy efficiency within a
building.”

The global energy demand is still very much alive. It is estimated that
world energy usage will increase by 26% between the years 2005 and 2015.
However, the only remaining driver of the energy efficiency market is the
green movement and the legislation that stems from it. The question is
whether emissions regulations and related environmental legislation will be
enough to keep the energy efficiency movement going at full-steam.

Companies now face an ethical dilemma: will they be driven to go beyond
the minimum requirements even though it is no longer cost effective in the
short run, or will they revert back to their old ways, taking advantage of
the now declining fuel prices? “It is now that we will find out which
companies are serious about ‘being green,’” concludes Raspin.

If you are interested in receiving more information on the energy
efficiency market, then send an e-mail to Chiara Carella, Corporate
Communications, at chiara.carella@frost.com, with your full name, company
name, title, telephone number, company e-mail address, company website, city,
state and country. Upon receipt of the above information, a brochure will be
sent to you by e-mail.

GIL 2009: Europe

Frost & Sullivan has expanded its flagship Global Congress on Corporate
Growth - GIL Global - into several major cities around the world including
London. For the first time ever in Europe, Frost & Sullivan will be hosting
the Growth, Innovation and Leadership Congress ‘GIL 2009: Europe’ on 19-20
May, at the Sofitel St James in London. GIL Global is the industry’s only
event designed to support senior executives in their efforts to achieve
sustainable, top-line growth. To register, obtain a programme agenda, explore
sponsorship opportunities, or attend as a member of the media for ‘GIL 2009:
Europe’, please contact Chiara Carella, Head of Corporate Communications for
Frost & Sullivan in Europe, at chiara.carella@frost.com. One-on-One
interviews with Frost & Sullivan senior growth consultants are also being
scheduled. For more information you can also visit www.frost.com/giluk

About Frost & Sullivan

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Contact:
Chiara Carella
Corporate Communications - Europe
P: +44-(0)-20-7343-8314
M: +44-(0)-753-3017689
E: chiara.carella@frost.com

www.frost.com

Source: Frost & Sullivan

Chiara Carella, Corporate Communications - Europe of Frost & Sullivan, +44-(0)-20-7343-8314, or mobile, +44-(0)-753-3017689, chiara.carella at frost.com; Logo: https://www.newscom.com/cgi-bin/prnh/20081117/FSLOGO