At the recent NALMCO Spring Seminar, we dove deep into this question, examining market data, lighting technology lifecycles, and future drivers of retrofit demand. The answer? Yes, saturation is happening—but the opportunity is far from over.
In fact, a new phase of growth is emerging, one powered by LED-to-LED retrofits, advanced lighting controls, and an increasingly electrified economy. Here’s a detailed look at where the market stands today—and where opportunity lies ahead.
Before diving into the saturation discussion, it’s worth recognizing the incredible progress the industry has made. Since 2010, more than 68 billion square feet of commercial space have been upgraded to LED lighting, out of a total 103 billion square feet of commercial building space. That shift has generated:
These gains have been driven by a mix of core benefits—energy and dollar savings, longer lifespans, and lower maintenance—as well as external forces like utility incentives, sustainability mandates, and smart building integration.
The most recent Lighting Market Characterization (LMC) report from the U.S. Department of Energy, based on 2020 data and published in 2024, shows that LED penetration in commercial buildings had reached 47% by that year. Fast-forward to 2025, and interpolated data—including proprietary SnapCount platform insights—suggest LED lighting now comprises approximately 66% of the commercial building stock.
That puts us in what researchers call the “late majority” phase of adoption. The rapid pace of the early 2010s has naturally slowed as the remaining market includes harder-to-reach, more cost-sensitive, or risk-averse building owners.
However, saturation isn’t the end of the road—it’s the beginning of a new chapter.
One of the most important—and underappreciated—market dynamics is that the first major wave of LED installations, completed between 2010 and 2015, is reaching end-of-life. Many of those early products had rated lifespans between 35,000 and 75,000 hours, which translates to a real-world average of about 9.5 years of operation. In other words: those LEDs are expiring now.
This sets up a massive secondary market opportunity. Not only do those aging fixtures need to be replaced, but they can be upgraded to higher-efficiency LEDs with embedded controls that offer better energy management, automation, and compliance with today’s stricter sustainability standards.
Based on lighting technology cycles and building data, we can roughly categorize the LED retrofit market into four phases:
The implication? By 2025, there’s already over 30 billion square feet of installed LED lighting with upcoming replacement needs—not counting the many facilities that skipped advanced controls during their initial retrofits.
So what’s driving demand today? A convergence of technology, economics, and environmental policy:
To illustrate the business case, consider a real-world example from SnapCount’s database: a 2015-installed LED troffer that used 55 watts and delivered 4,000 lumens. By 2025, it can be replaced with a retrofit kit drawing just 33 watts—and enhanced with occupancy and daylight controls.
Even at a $185 sale price, the retrofit delivers:
These numbers are even more compelling when scaled across an entire facility.
For contractors, the easiest path to future growth may be through the doors you've already opened. Using SnapCount’s new “LED Replacement Opportunity Finder,” you can automatically identify:
This functionality generates detailed reports with install dates, fixture counts, control status, and product-level lifecycle metrics—making it easy to prioritize high-value re-retrofit targets.
Savvy firms are also expanding their sales approach beyond lighting alone. Consider:
This positions your business as a long-term sustainability partner—not just a lighting vendor.
LED isn’t the only path forward. Contractors and energy service providers looking to stay ahead of the curve are diversifying into:
All of these complement lighting retrofits and align with customer goals around ESG, cost savings, and resilience.
While LED adoption in commercial buildings is approaching the two-thirds mark, the retrofit market is far from finished. In fact, we’re entering an era of replacement, refinement, and reinvention—where value is created not just from what’s installed, but how smart, efficient, and future-ready those installations are.
With the right data, tools, and mindset, contractors can tap into tens of billions of square feet of emerging opportunity. The question isn’t whether saturation has occurred—it’s whether you're prepared to lead in the next wave.
Special thanks to Peter Brown, Parker Allen, Mike Cham, Craig DiLouie, Walter “BJ” Pidgeon, and Wayne Callham for their insights and contributions to this research.