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Market Overview – Industry Trends

STRATEGIC REPORT

Our market at a glance

Smart cities

In 2025 the global smart lighting market showed robust momentum against the backdrop of expanding smart city and IoT infrastructure investment. The market was valued at £7.5bn in 2025 and is projected to grow to £32bn by 2030, an annual growth rate of 18.5%. The installed base of individually controlled street lights is expected to increase from 33 million units in 2024 to 85 million units in 2029, a CAGR of 21% (source: Research and Markets, 2025). In the UK, demand remains subdued as local authorities have limited budgets and often favour lower tech solutions or minimal investment as opposed to the latest smart city solutions. Smart lighting is increasingly recognised as the foundational layer of smart-city infra-structure, acting as a gateway to wider digital transformation. Because street lights are already ubiquitous and powered, they provide an ideal network for hosting

sensors, connectivity modules and data platforms that enable upgrades such as traffic management, air-quality monitoring, parking optimisation and public-safety systems. For local authorities, smart lighting delivers immediate operational benefits: significant energy savings, reduced maintenance costs through predictive monitoring and lower carbon emissions that support net-zero commitments. At the same time, the public benefits from better-lit, safer streets, improved urban environments and more efficient municipal services. By turning a basic utility into a digital asset, smart lighting helps cities move from isolated infrastructure management toward integrated, data-driven governance, laying the groundwork for resilient, sustainable and connected communities.

Enabling a more sustainable future

Energy distribution

Market opportunity

People

Planet

Smart cities

Progress

Sustainable living

Read more about ESG on pages 66 to 79 .

| Urbanisation and infrastructure investment. | Energy efficiency and sustainability mandates. | Shortage of local authority funds.

| Operational cost savings. | IoT connected, data driven solutions. | Public safety and quality of life goals.

Market drivers

Market research figures quoted indicate broader sector growth potential and do not represent total addressable segments for Lucy products and services.

Energy distribution

Sustainable living

Manufacturers are introducing switchgear with embedded sensors, remote monitoring and predictive diagnostics, to improve reliability and operational efficiency. The transition to synthetic air and vacuum insulation is also reshaping product portfolios as regulatory pressure to eliminate SF6 intensifies. The industry is also seeing greater convergence between low- and medium-voltage segments, with products designed to integrate with battery storage, solar manufacturers expand into software, digital services and lifecycle management to offset margin pressure in traditional hardware. Overall, the sector is entering a new phase of sustainable and digital transformation, characterised by innovation and a shift toward smarter, cleaner and more connected electrical infrastructure. installations and modular substations. Competitive dynamics are evolving as major

In 2025, the global low- and medium-voltage (LV/MV) switchgear market continued to expand, driven by investment in electrification, renewable energy and grid modernisation, despite slower growth in some regions. Forecasts indicate the global LV/MV switchgear market will grow significantly, increasing by around £37bn at a CAGR of approximately 7.3% from 2024 to 2029 (source: Technavio, August 2025). Growth is being driven by the acceleration of distributed energy resources, electric vehicle charging infrastructure and digital industries such as data centres. However, government policy actions in many geographies may create a drag on these projections. Demand is shifting toward digital and eco-efficient technologies as utilities and industrial users align with decarbonisation and sustainability commitments.

While repair and maintenance activity in the UK has grown since Covid-19, the new build segment is expected to stabilise and return to growth over the medium term (source: PwC Construction and Housebuilding Outlook, September 2025). Residential developers, however, continue to face land scarcity, rising costs, skills shortages, regulatory complexity and planning delays. Consumer demand is not likely to be strong in the short term because of the cost of living, interest rates and market confidence. In Oxfordshire, housing demand is set to remain strong. The August 2025 Oxfordshire County Council housing-led forecasts project a total population of 814,700 by 2032, up 9% since 2023 (source: Oxfordshire Data Hub). Strong demand and rising prices create favourable conditions for Future

Buildings Standard-compliant ‘green’ stock, although delivery may be constrained by limited infrastructure and planning bottlenecks. Oxford’s rental market remains resilient, supported by the university, tight central supply and sustained occupier demand (source: Oxford Property Consultants). Rents sit among the highest outside London; persistent demand suggests continued above-average rental growth if supply remains restricted. Some landlords may sell rather than comply with stricter regulation under the Renters’ Reform Bill, further reducing housing availability. Sustainability remains key, with 92% of large UK landlords reporting tenant willingness to pay more for greener, energy-efficient homes (source: Handelsbanken 2025 UK Property Investor Report).

Market opportunity

Market opportunity

| Grid modernisation and resilience needs. | Renewable energy integration. | Investment in infrastructure.

| Growing adoption of EVs. | Digitalisation and grid-edge technologies. | Environmental regulation.

| Net zero policy and regulation. | Consumer environmental awareness. | Desire for energy cost savings.

| Advancement in green building materials and technologies. | More practical retrofit solutions.

Market drivers

Market drivers

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Lucy Group Ltd Annual Report & Accounts 2025

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