Hi, I had posted this already on the UE forums but didn't receive any answer. I feel like this is a typical issue though, so I hope somebody over here will be able to provide some tips. 
If you look at the attached Image, you can see that at the first image 
(Flat normal) the ceiling edges but also other edges have strong 
contrasted edges, it looks unnatural and terrible.
At the second image you can see (green area) that the edges are barely 
visible, very smooth transition, lighting looks great - However! the 
right wall and ceiling shows really strong Artifacts.
(the Blue line marks a 90° angle on the geometry)

I have tried various solutions that came to my mind:
- mixing flat and smooth geometry = Barely an Improvement, new transition issues between flat and smooth geometry
- re
 positioning the lights = not practicable for smooth faces, on flat 
faces it can improve the hard edges quite a bit but then the lights will
 be at awkward positions causing new issues
- AO and DFAO
 to cover the hard edges on flat smoothing = mediocre effect when 
shadows disabled on the light, 0 effect when shadows enabled (disabling 
shadows is not an option)
- Using Spotlights or Lightprofiles = no improvement
- Increasing the Lightsource radius/length = no effect on flat, turns black artifacts into white super glossy artifacts on smooth
Using more lights to cover the problematic off other lights is probably 
too expensive. Skylight is used and helps to decrease the hard edges for
 flat smoothing, but I require a Day cycle and during nights the 
skylight needs to be tuned down and on days the lights are not in effect
 so the influence of the skylight is negligible.