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Orthogonal frequency division multiplexing (OFDM) is a modulation techniquesusceptible to source, channel and amplifier nonlinearities because of its highpeak-to-average ratio (PAPR). The distortion gets worse by increasing theaverage power of the OFDM signals since larger portion of the signals areaffected by nonlinearity. In this paper we introduce Hadamard coded modulation(HCM) that uses the fast Walsh-Hadamard transform (FWHT) to modulate data as analternative technique to OFDM in direct-detection wireless optical systems.This technique is shown to have a better performance for high average opticalpower scenarios because of its small PAPR, and can be used instead of OFDM intwo scenarios: 1) in optical systems that require high average optical powerssuch as visible light communications (VLC), and 2) in optical wireless systemsunconstrained by average power, for which HCM achieves lower bit error rate(BER) compared to OFDM. The power efficiency of HCM can be improved by removinga part of the signal's DC bias without losing any information. In this way, theamplitude of the transmitted signal is decreased and the signals become lesssusceptible to nonlinearity. Interleaving can be applied on HCM to make theresulting signals resistent against inter-symbol interference (ISI) effects indispersive channels by uniformly distributing the interference over allsymbols.

Hadamard Coded Modulation: An Alternative to OFDM for Optical Wireless Communications