Tackling the energy efficiency of buildings with tools like smart management of lighting and heating systems continues to be a priority for businesses and investors, which is driving a significant growth in the building energy management market, according to a new report.
Especially driven by opportunities in the commercial building space, the market for building energy management will more than double what it brings in from 2021 through 2026, growing to an estimated $14.9 billion with an annual growth rate of 15.5%, according to a Research and Markets report. In the Americas, that annual growth is expected to be 41% through 2026, hitting $5.6 billion.
The report finds that building energy management systems play a crucial role in healthy buildings and that smart equipment attracts investors. The energy management applications can help track energy consumption and identify problems in equipment before they become a significant issue.
Energy transitions are becoming more of a priority for businesses and energy management systems play a significant role in everything from lowering costs to cutting carbon emissions. The latter is estimated to produce up to 40% of the world’s emissions.
Energy management systems are important because much of building energy is wasted during times of low demand or need while systems are running at full capacity, according to the Office of Energy Efficiency and Renewable Energy.
Several other recent reports show significant growth also expected in smart building and automated systems, as well as tools to help with energy efficiency in buildings such as energy efficient data centers. There also has been a significant growth in the use of LED lighting and lighting control systems.
The building energy manage market is divided into three areas, according to the report. They include hardware, software and services.
Hardware is the basic necessity of systems, but platforms are increasingly moving to wireless formats due to integration of the internet of things and artificial intelligence, according to the report. That means more users are shifting toward systems that can be operated with mobile and cloud systems. Although, according to Research and Markets, wired hardware will continue to dominate the market because of increased reliability, but hotels and retail buildings have seen positive adaptation of wireless technology.
The software side is expected to grow over the next five years, according to the report, because of the increase in smart systems as well as policies for energy efficiency become more common place. The service aspect includes third parties that install and maintain the systems.
The report says established buildings are more likely to be retrofitted with systems because of the lengthy planning and construction of new buildings will slow that part of the market.
COVID-19 has also impacted the industry, according to the report, because there are often fewer people working in buildings due to remote applications. That said, the energy management systems can be important with this type of fluctuation as they can automatically adjust to the energy demand.
In addition to the rapid market growth in the Americas, the Asia-Pacific region is expected to see an increase of 18.6% a year through 2026, up to $3.3 billion. The market was worth $7.2 billion in 2021, according to the report.