Energy Management Systems Market size is estimated to reach ~USD 266.03 Billion by the end of 2035 by growing at a CAGR of ~17.20% over the forecast period, i.e., 2023 – 2035. In addition to this, in the year 2022, the market size of energy management systems was ~USD 39.61 Billion. The growth of the market can be attributed to the increasing use of renewable energy sources, which is surging the demand for energy management systems. There has been a global shift towards renewable sources owing to environmental concerns. Moreover, energy management solutions have gained popularity as they reduce costs and increase productivity. According to the Energy Information Administration, renewable energy sources accounted for nearly 12.4 percent of total primary energy consumption in the United States in the year 2021.
Energy management system is a software that collects energy data and then uses it for reporting, monitoring, and interaction. Reporting includes confirming energy data, monitoring includes tracking energy consumption, and engagement includes ongoing discussion about energy consumption between building managers and renters via automatic or manual messaging. Data analytics can be used to identify ways to optimize energy consumption patterns and eventually save money on energy costs by utilizing information acquired through energy management software. The system is highly used by the commercial, industrial, and public sector organizations to manage their energy consumption, and reduce costs.
Base Year |
2022 |
Forecast Year |
2023-2035 |
CAGR |
~17.20% |
Base Year Market Size (2022) |
~ USD 39.61 Billion |
Forecast Year Market Size (2035) |
~ USD 266.03 Billion |
Regional Scope |
|
Growth Drivers
The global energy management systems market is segmented and analyzed for demand and supply by type into building, home, and industrial energy management systems. Out of these types of energy management systems, the home segment is estimated to have the highest CAGR of about ~38% in the year 2035. The growth of the segment can be attributed to the increasing number of smart homes that are equipped with energy management systems. Moreover, fully equipped smart homes help reduce the energy consumption, as well as improve the efficiency. In addition, home appliances are major energy consumers for the home energy consumption. Therefore, all these factors are predicted to boost the growth of the segment in the market. According to recent data, there are predicted to be more than 400 million smart homes around the globe by the end of the year 2025.
The global energy management systems market is also segmented and analyzed for demand and supply by applications into residential, and commercial. Amongst these three segments, the commercial segment is expected to garner a significant share of around ~59% in the year 2035. This can be attributed to the surging consumption of electricity in the commercial sector. Moreover, there has been an increase in the use of energy for application in lighting, air conditioning, and lighting purpose in industrial and manufacturing areas, that is further expected to boost the segment’s growth in the market. In addition, the manufacturing units requires a huge amount of energy for their operations, which in turn is anticipated to provide opportunities of the segment in the market over the forecast period.
Our in-depth analysis of the global energy management systems market includes the following segments:
By Applications |
|
By Type |
|
By Component |
|
By End Users |
|
The market share of energy management systems in North America, amongst the market in all the other regions, is projected to be the largest with a share of about ~33% by the end of 2035. The growth of the market can be attributed majorly to the owing to drastically changing energy regulations and increasing investment in sustainable energy in the U.S. For instance, public benefit funds (PBF) for renewable energy are set up and used by the states in the USA to invest in clean energy supply for the public. Furthermore, the growing acceptance and utilization of renewable energy among the countries in the North America region, is further estimated to support the market growth. According to the data by OECD, 8% of the total primary energy consumed in the USA is derived from renewable energy sources, as of 2019. Moreover, various industry giants are increasingly investing in advanced energy management system to reduce energy wastage, which is foreseen to boost the market growth in the region.
The European energy management systems market is estimated to be the second largest, registering a share of about ~23% by the end of 2035. The growth of the market can be attributed majorly to the escalating adoption of smart grids in the region and environmental concerns among the people. Furthermore, there has been a surge in the implementation of government policies for the efficient use of energy, and reducing the amount of carbon emissions in countries such as the UK, Germany, France, and others, that is further predicted to expand the growth of the market in the European region.
Energy management systems market in Asia Pacific is estimated to experience the highest CAGR during the forecast period on the back of evolving sustainable energy infrastructure in the region. The growing industrialization in developing countries is projected to increase the demand for smart grids and smart meters to optimize energy utilization, which in turn would drive the market growth in the region. Growing initiatives to promote the use of renewable energy such as subsidies for solar farms in developing economies, is projected to promote market expansion in the Asia Pacific region.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Author Credits: Payel Roy, Dhruv Bhatia
Ans: Increasing installation of smart meters, growing awareness related to smart buildings, and rising energy price volatility are the major factors driving the market growth.
Ans: The market size of energy management systems is anticipated to attain a CAGR of ~17.2% over the forecast period, i.e., 2023 – 2035.
Ans: Slow government procedures and paperwork for switching to smart grid, lack of awareness regarding adoption of renewable energy infrastructure in developing countries are estimated to be the growth hindering factors for the market expansion.
Ans: The market in the North American region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.
Ans: The major players in the market are IBM Corporation, Cisco Systems, Inc., Honeywell International, Inc., General Electric Company, ABB Ltd, Siemens AG, Hitachi, Ltd., Emerson Electric Co, Eaton, and others.
Ans: The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue generating capacity as well as the new products being launched into the market by the company.
Ans: The market is segmented by applications, type, component, end users, and by region.
Ans: The home segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
Submit Your Request For Proposal (RFP)