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The home energy management systems market size is estimated to grow by USD 1.97 billion at a CAGR of 10.01% between 2023 and 2028. Market growth hinges on various factors, such as the increasing integration of smart grid technologies, escalating demand for energy efficiency measures, and the wide array of available smart home products. Ever since Apple announced its smart home platform, the range of compatible devices by various vendors has been growing continuously. Home energy management systems are devices that are installed in residential buildings to enable the provision of feedback on electricity consumption patterns and power consumption data for individual appliances. The growing adoption of smart grid technologies signifies a shift towards more intelligent and efficient energy distribution systems, addressing the need for sustainable energy solutions. Simultaneously, the rising emphasis on energy conservation underscores the importance of reducing energy consumption and minimizing environmental impact. Furthermore, the diverse selection of smart home products caters to consumers' desire for convenience, connectivity, power management, and energy management within their living spaces. Thus, the interplay of these factors delineates the landscape for the anticipated growth of the market.
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The market is witnessing significant growth, driven by innovations in thermostat systems and intelligent HVAC controllers. Leveraging wireless protocols technology and hybrid technology, modern HEMS solutions cater to diverse deployment types and new construction projects. An Industry Analysis Report underscores the market's potential, particularly with the integration of Electric Vehicles (EVs) and IoT (Internet of Things) technologies. With advancements in machine learning and advanced data analytics, HEMS providers offer programmable communicating thermostats compatible with Wi-Fi and Ethernet, empowering consumers with efficient energy management options for sustainable living. In smart building development, reducing carbon footprints is a key focus, with energy concepts leveraging the Internet of Things (IoT) to enhance power consumption efficiency. Multi-family residence and various residence types benefit from smart home energy management system and advanced thermostat system, which optimize energy use and support sustainable deployment type. The energy concept for a residence type plays a crucial role in determining its energy efficiency and sustainability, guiding the implementation of systems and technologies that optimize power consumption and reduce environmental impact. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The availability of a wide range of smart home products is notably driving market growth. The home energy management system market is highly attractive, where large blue-chip and start-up companies alike have entered with a wide range of product
The devices are an addition to existing products that are already available in the market, working with technologies such as ZigBee and Z-Wave. Companies such as Amazon and Google have launched products that act as a hub, which is an essential component in home energy management systems. Due to the increasing global population and urbanization, there is a continuous rise in electricity generation, with utilities operating power plants at maximum capacity to generate the most power possible from the current infrastructure. The proliferation of smart home devices has expanded to the adoption of home energy management systems, wherein consumers are embracing the technology, which helps in energy conservation, in addition to the convenience of the products. Hence, the market in focus is expected to grow during the forecast period.
Growing investment in smart cities and smart homes is the primary trend in the market. The smart home concept is rapidly gaining ground as consumers seek to improve domestic convenience through electronic devices. Owing to the comfort and convenience provided by these devices, consumers are considering their installation, such as smart thermostats and smart lighting devices at home. Today, smart home technologies using advanced sensors are affordable. They can be used by an average household to connect appliances such as heating modules, lighting systems, air conditioning units, computers, television sets, entertainment systems, security devices, and camera systems.
The homeowner can control these devices using their smartphones and tablets. Moreover, home appliances use artificial intelligence to accurately predict consumer preferences based on historical data. With an increased focus on building smart cities with improved quality of life and efficiency of services, the demand for home energy management systems is expected to experience growth during the forecast period.
Privacy and security risks is the major challenge impeding the market growth. With the advent of home energy management system technology, the number of connected devices worldwide has increased significantly over the past few years. All Wi-Fi-enabled devices are now operated using cloud technology, where privacy is one of the major concerns. Regarding smart homes, individuals focus on the security aspect while adopting any new technology.
Public or unauthorized access to cloud information could lead to cyber threats and compromise the integrity of the entire system. If a smart meter has been installed, it acts as a gateway between the house and the grid. This connection allows for remote access wherein activities such as controlling the HVAC system, charging the EV, and other energy-intensive activities can be shifted to off-peak hours. These functions are performed over a communication network, and it comes with security concerns. Security and privacy concerns have a negative impact on the adoption of home energy management systems. This may negatively affect the market during the forecast period.
The report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Tado GmbH - The company offers home energy management systems that include features that empower full-control to homeowners to set their monthly heating costs, and stick within budget.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The Hardware Segment is estimated to witness significant expansion during the forecast period. The hardware of a home energy management system typically consists of a hub device that relays communications between events occurring inside the home, the user, and occasionally the neighborhood utility or electricity retailer. Hardware components may boost the market during the forecast period as monitoring data and controlling building operations gain traction to embed intelligence. Data and communications going in and coming out of a home energy management system are moderated by the software used there.
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The hardware segment was valued at USD 902.80 million in 2018. The software, as seen from the user's perspective, serves as the interface for accessing system monitoring data and control features. The software may gain traction as more businesses evaluate the importance of energy efficiency and seek to improve collaboration and communication regarding energy-related issues. Hence, owing to these factors, the market is expected to witness growth during the forecast period. The services segment is gaining popularity in the home energy management system market which is driving market growth.
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North America is estimated to contribute 34% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
North America is the largest regional contributor to the global home energy management systems market. The increasing energy prices and the rising focus on demand response and energy efficiency to decrease electricity costs have made energy management products a compelling proposition. The US is the largest revenue contributor in the region. This is mainly driven by the increased awareness about energy efficiency and products that can help in achieving it, combined with rising income levels, which are leading to the higher adoption of home energy management systems. The US is one of the largest markets for home energy management systems. The adoption of home energy management systems has increased in the country due to high-income levels and increased awareness about the benefits of these systems. With the added functionalities of battery storage in homes, energy management has become more flexible in the country.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD million" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
Home Energy Management Systems (HEMS) are advanced solutions designed to optimize electricity usage and reduce energy bills in residential and commercial buildings. These systems use data analytics, artificial intelligence, and IoT technologies to analyze electricity usage patterns and provide energy management strategies. Home heating and cooling account for one of the largest power-intensive activities in the residential sector, thus making smart thermostats one of the most important elements in the home energy management system. HEMS can be deployed in various residence types, including new construction and multi-family residences, and can be integrated with hardware such as intelligent HVAC controllers, Ethernet, and smart meters.
Furthermore, cloud deployment enables remote monitoring and control of energy consumption, while financial incentives like rebates, tax credits, and carbon footprint reduction incentives encourage adoption. HEMS can also integrate with hybrid technology, such as Solar PV and Electric Vehicles (EVs), and offer self-monitoring systems for real-time energy usage data. HEMS can significantly reduce greenhouse gas emissions and contribute to smart grid development and smart home technologies.
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Market Scope |
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Report Coverage |
Details |
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Page number |
190 |
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Base year |
2023 |
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Historic period |
2018 - 2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 10.01% |
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Market growth 2024-2028 |
USD 1.97 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
8.86 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 34% |
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Key countries |
US, China, Germany, UK, and France |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Capgemini Service SAS, Carrier Global Corp., Cisco Systems Inc., Comcast Corp., ecobee, Emerson Electric Co., General Electric Co., Honeywell International Inc., Intel Corp., Johnson Controls International Plc., Lennox International Inc., Liricco Technologies Ltd., Panasonic Holdings Corp., Resideo Technologies Inc., Robert Bosch GmbH, Schneider Electric SE, Siemens AG, Snap One LLC, tado GmbH, and Vivint Inc. |
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Market dynamics |
Parent market analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for Market forecast period |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Component
7 Market Segmentation by Product
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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