Why this is important to Wisconsin businesses: New regulations taking effect have increased demand for energy-efficient lighting, and Wisconsin supplies nearly half of U.S. exports to Italy in this category.

Italy is the third-largest economy in Europe and the fourth-largest economy in the Euro zone. The country has faced, and is still facing, challenges with its budget deficit, which the government plans to reduce to 2.1 percent of GDP in 2017. Despite these difficulties, Italy managed to increase its real GDP by 0.9 percent to $1.85 trillion in 2016, compared to $1.83 trillion in 2015. Moreover, according to the Italian National Institute of Statistics, the domestic economy is expected to grow by 0.9 percent again in 2017.

As in most of the world, modern and energy-efficient lighting technologies, especially LED technology, are gaining popularity in Italy. According to a recent study from an Italian university, total sales of energy-efficient and intelligent lighting technologies will grow from €900 million in 2015 to €1.6 billion in 2020. Out of this total, the market volume for the private sector will grow from €770 million to €810 million. By 2023, LED technology is expected to prevail in private households. The LED market for the public sector will also experience an increase of almost 90 percent, from €170 million in 2015 to €320 million in 2020. By 2029, the public sector is expected to rely almost completely rely on LED lighting.

The reason for the changeover is due to an EU regulation that banned the sale of conventional light bulbs, halogen lamps and lamps with a low efficiency class for private households. Another EU regulation states that public buildings, office buildings, streetlights and factories are also required to improve their energy efficiency by this year. The Italian government has accordingly issued an ambitious plan for the reduction of energy consumption.

Italy does not produce enough LED lights domestically to cover the demand, which has increased in recent years and is expected to grow more. Therefore, the country must import energy-efficient lighting, as well as intelligent control systems including hardware and software, since the domestic industry is underdeveloped. China was the source of 37 percent of Italy’s LED lighting imports in 2015, followed by Germany (15%) and France (13%). However, the U.S. contribution of electric lighting equipment, including bulbs, lamp parts and lighting fixtures, to Italy is considerable. Respective U.S. exports have increased by almost 50 percent between 2010 ($16.3 million) and 2016 ($23.6 million). Wisconsin companies exported electric lighting equipment worth $10.4 million to Italy in 2016—making up almost the half of total U.S. exports to Italy in the electric lighting segment that year. Like total U.S. exports, the value of Wisconsin’s exports to Italy in this category has grown strongly, up from just $4.8 million in 2010.

Wisconsin companies producing LED lamps and other energy-saving products should not miss the opportunity to expand their market share in Italy during the country’s changeover to more efficient and cost-saving lighting technologies. A good venue to explore business opportunities and increase exports to Italy is the Ecomondo green technology expo in Rimini Nov. 7-10, 2017. Italy’s Ministry of Economic Development provides information on energy issues as well.