A New Market Emerges for Lighting Contractors

By Parker Allen

In several decades, our roadways may look drastically different than they do today. The majority of cars will be electric. Electric vehicle charging stations will populate every city, replacing gas stations as gas-powered vehicles are phased out.

While the timeline is up for debate, given recent trends, it seems safe to say that we are at an inflection point with the types of vehicles we drive. Consumers spent 50% more on electric car purchases in 2020 than 2021. And, governments spent $14 billion on tax deductions and purchase incentives for electric vehicles, a 25% increase over the prior year.(1) An additional data point that hits closer to home--Rexel Energy Solutions is fully electrifying its commercial fleet before the year 2030. They are the first in our industry to make this move, but it is likely that others will follow.

To support the growing presence of electric vehicles, our electric infrastructure will have to undergo a major overhaul. That means major growth for our electrical transmission and distribution capabilities and widespread installation of electric vehicle charging stations. Signs of these necessary changes are on the horizon. Drive around any major metropolitan area, and you will undoubtedly see charging stations at major retail areas.

Photo Credit: Fahroni

The U.S. electric vehicle charging market is at the beginning of an exponential growth phase. Valued at $2.85 billion in 2021, it is expected to expand at a compound annual growth rate (CAGR) of 36.9% during this decade.(2)

Lighting manufacturers are starting to see the value in this lucrative market. Voss Lighting and Light Efficient Design have already added EV chargers to their portfolios, and others are planning to do so. An important driver of this phenomenon is the similarity of the underlying technology. The core technologies--chips, controllers, etc.--for electric vehicles are being produced by the manufacturers of LEDs.

Now, market demand and government incentives have reached the point where it is advantageous to offer EV charging. It has become an adjacent market into which LED manufacturers can easily jump. Not every LED manufacturer has decided that the opportunity is worth it, but a fair amount of them are paying close attention, in the same way that many were focused on horticultural lighting a decade ago.

This emerging market also presents a great opportunity for the lighting contracting industry, at a time when lighting retrofit opportunities are drying up. As the adoption of LEDs has grown, the retrofit and maintenance markets have shrunk, or, at the very least, plateaued. In a recent article for US Lighting Trends, Peter Brown asked if EV charging solutions could be “the next big thing.”(3) He noted the surprising number of lighting companies selling charging stations at LightFair this year. Apartment complexes and commercial buildings are installing charging stations for residents and occupants. Some retailers are looking to install them to attract customers. The demand for the installation and maintenance of charging stations is growing.

Can the supply side keep up?

Installing and maintaining EV chargers is typically a straightforward process, provided the site has the necessary infrastructure already in place. Prior to installation, it is typically advisable to do a load study on the property’s panelboard to ensure the facility can handle the additional load. Level 2 chargers operate at 220 volts, so new infrastructure is usually not needed – it is just a matter of running power from the panelboard to wherever the chargers are placed. Level 3 chargers, also known as DC fast chargers, are a different story. They operate at 480V and charge much more quickly than level 2s, but they require more complicated electrical infrastructure to operate. The cost of purchasing and installing these units reflects this.

Photo Credit: dcbel

Upfront cost is the main obstacle to installing EV charging solutions, but that burden can be alleviated through federal tax credits and additional incentive programs. According to Briteswitch, 63% of the country is covered by a rebate program for installing an EV charging station.(4) The money is out there – it is just a matter of finding it, and resources like Briteswitch and Encentiv Energy’s Encentivizer can help. It is important to note that not all EV chargers will be covered by rebates.

Moving forward, utility companies are required to approve qualified manufacturers. There will likely be considerable consolidation in the market following this initial expansion.

No less than three industry players contacted compared this growth to when LEDs first came on the scene – a Wild West scenario. With LEDs, there were a million different manufacturers, all providing seemingly similar products.

How soon will our roadways be mostly, if not fully, electric?

Hard to say, but one thing that does seem certain is that it is a matter of when, not if. Many automobile manufacturers have committed to increasing their offerings of electric vehicles. Big names such as Volvo and General Motors have set aggressive target dates by which they will only offer electric vehicles. These trends facilitate a huge market for electric vehicle charging solutions.

The opportunity....is there. ■

Sources:

(1) IEA (2021). Global EV Outlook 2021, IEA, Paris https://www. iea.org/reports/global-ev-outlook-2021

(2) Grand View Research, Inc. (2022). U.S. Electric Vehicle Charging Infrastructure Market Size, Share & Trends Analysis Report, 2022-2030, Grand View Research. https:// www.grandviewresearch.com/industry-analysis/us-electricvehicle-charging-infrastructure-evci-market

(3) Brown, Peter (2022). Tracking the Next Big Thing, US Lighting Trends. https://www.uslightingtrends.com/design/ commercial/637-tracking-the-next-big-thing

(4) Find EV Charger Rebates (2022). BriteSwitch. https://briteswitch.com/find-EV-charger-rebates. php?gclid=Cj0KCQjwguGYBhDRARIsAHgRm49m2UrOiB-