Electricity tariff hikes drive shift to energy-efficient lighting

Egypt’s electricity tariff hikes are putting the informal lighting market on the back foot. With payback periods on smart, energy-efficient systems now running 18-36 months — short enough to write the business case themselves — buyers are turning down cheap sticker prices for long-term savings.

The formal sector is finally a more attractive option for buyers now that monthly electricity-bill savings can repay a quality system in under three years. “We focus on highlighting total cost rather than just the purchase price — low-quality products often lead to higher energy consumption, frequent breakdowns, and a shorter lifespan,” Signify Egypt and Northeast Africa president and CEO Mohamed Saad tells EnterpriseAM.

This is bad news for the gray market, which still controls roughly 60% of Egypt’s USD 400-550 mn lighting sector, according to Bahaa El Adly, head of the electrical equipment division at the Engineering Industries Chamber. The informal sector is more than unlicensed factories — it’s primarily counterfeiting, with small and mid-sized manufacturers copying international brands outside any quality-control framework.

IN CONTEXT- The country’s lighting market is growing at around 7% annually — on El Adly’s read — well ahead of the 3.83% Morgan Reed Insights projects, which sees the sector expanding from USD 522.7 mn in 2026 to USD 733.3 mn by 2035. Lighting isn’t energy-intensive, so the tariff hike hits manufacturers’ bottom lines lightly. The real cost pressure — around 10% — is coming from copper and aluminum prices, which have risen due to disruptions in regional logistics.

The limits on localization: Egypt can domestically produce 75–80% of an LED product. The hard stop is precision electronic components, imported almost entirely from China. At current market volumes, importing still beats local production on economics.