UAE’s LED lighting market accelerates towards smart, low-carbon urban infrastructure

The UAE’s LED lighting market is shifting from being mostly a cost-saving retrofit option to becoming a vital part of the country’s low-carbon urban transformation. According to IMARC Group, the market hit AED 4,548 million in 2024 and is expected to expand to AED 11,401 million by 2033, with a compound annual growth rate of about 10.8% from 2025 through 2033. This growth reflects a mix of government policies, rapid construction activity, falling costs for components, and the rise of AI-enabled smart lighting systems.

Public sector initiatives had an initial, measurable effect. For example, Dubai’s Roads and Transport Authority completed a large-scale LED upgrade across metro stations and facilities, installing nearly 20,000 bulbs and saving around 16.7 million kilowatt-hours over two years, according to the RTA. They value the energy savings at AED 7.6 million and note that emissions decreased by roughly 7,283 tonnes of CO2. Similarly, Abu Dhabi has followed suit, government projects replacing traditional streetlights with LEDs have reported energy reductions of up to 85% in pilot zones, industry sources say. These positive results directly support Dubai’s Clean Energy Strategy and the UAE’s broader goals for energy efficiency, transforming LEDs from optional upgrades into expected infrastructure standards.

Demand from the private sector is just as strong. Developers building new commercial spaces in Dubai and other Emirates are increasingly specifying LED systems, often to meet sustainability certifications like LEED, Estidama, and Al Sa’fat. Industry data shows that retrofit programs across corporate portfolios can cut lighting-related energy consumption by anywhere from 60 to 80%, with payback periods usually under two years. The hospitality sector, more than 700 hotels nationwide, is also adopting smart, tunable lighting to match guest preferences and meet regulatory standards. Major retailers, including regional branches of international brands, have been scaling up their LED offerings in response to rising consumer interest.

Advances in technology and decreasing costs are fueling broader adoption. IMARC Group and other market analysts observe that LED panel prices have dropped by about half since the earlier models, while efficiency has improved to roughly 150 lumens per watt in top-tier products. This improved performance, along with cheaper sensors, drivers, and wireless controls, has helped make Internet of Things (IoT) connected lighting a mainstream solution. New applications are popping up everywhere: horticultural LEDs for vertical farms in desert areas, UV-C modules for sterilization in healthcare settings, and even experiments using LED luminaries for high-speed data transfer through Li-Fi.

Artificial intelligence is also making a big difference in the value proposition of LEDs. Vendors and system integrators claim that layering AI on top of connected LED systems can lead to significant gains. For instance, as per IMARC Group’s summary, adaptive brightness control powered by AI can reduce overall lighting use by up to 45% in smart office buildings, by adjusting brightness based on daylight availability and occupancy patterns. Predictive maintenance, driven by machine learning, monitors fixtures in real time, forecasting failures weeks ahead and cutting unplanned maintenance costs by as much as 60%, which in turn extends asset life. AI also supports circadian lighting, adjusting color temperatures throughout the day to mimic natural light; some research attributes productivity boosts of approximately 25% in companies that implement these systems.

These claims are starting to gain traction commercially. Signify, the maker of Philips Hue, introduced an AI assistant for personalized lighting scenes in the UAE in early 2025, according to company announcements. They also launched a cloud-connected emergency lighting system designed for easier compliance and faster deployment. Industry insiders suggest that these moves mark a shift away from standalone products toward integrated platform services that combine energy savings, compliance, and enhanced user experience.

When it comes to market segmentation, the opportunities are vast. IMARC Group categorizes the market into LED panel lights, downlights, and streetlights used in commercial, industrial, and residential sectors. Meanwhile, Grand View Research estimates that the industrial and commercial LED segment alone reached about USD 1.39 billion in 2024, and it’s expected to continue its double-digit growth, driven by increasing urbanization and stricter efficiency regulations. Both import channels and domestic production lines are supplying the market, with regional manufacturing initiatives aimed at shortening supply chains and increasing added value through system integration.

Of course, challenges remain. The rapid pace of technological change creates compatibility and lifecycle concerns for large-scale institutional buyers. The quality and durability of cheaper imports can vary, which complicates procurement and total-cost-of-ownership calculations. Moreover, integrators need to ensure strong cybersecurity and data governance, especially since lighting systems increasingly serve as gateways for building management and occupant monitoring. Finally, some claimed energy savings still need independent validation across the diverse operational environments within the Emirates.

Nevertheless, policy momentum and tangible project results continue to drive progress. Government programs and municipal pilot projects offer scalable models for wider adoption, while retailer expansion and online distribution channels make advanced LED solutions more accessible to consumers and small businesses. For stakeholders interested in climate technology in the UAE, the LED market provides several entry points: efficient lighting fixtures serve as an immediate tool for reducing emissions, and AI-enabled platform approaches open up possibilities for operational efficiencies and new revenue streams.

Looking forward, the market’s growth will depend on several factors, like how strict building codes become, the pace of smart city initiatives, the maturity of AI tech, and local manufacturing capacity. IMARC Group forecasts that these combined influences should more than double the market’s value by 2033. For policymakers and investors focused on climate tech in the Gulf, LEDs coupled with intelligent controls appear to be a low-risk, high-impact solution, aligning impressive economic savings with ambitious decarbonization goals.

Source: Noah Wire Services