The global residential energy management market is to increase from US$ 2,313 million in 2020 to US$ 4,399 million by 2025 with a compound annual growth rate (CAGR) of 13.7% for the period 2020-2025. Some of the prominent players in the residential energy management market are Eaton Corporation Plc , Emerson Electric Manufacturing Company, General Electric Company, Hindustan Brown Boveri Ltd., Honeywell International, Itron, Inc., Landis+Gyr, Robert Bosch Gmbh., Schneider Electric Se , Siemens Engineering & Manufacturing Co. Of India Ltd.
Residential Energy Consumption Drives Demand for Energy Management Market
Energy consumption in the residential sector encompasses all energy utilized by households, excluding transportation. It includes energy consumption for heating, cooling, lighting, water heating, and consumer products. According to the International Energy Outlook 2016, the residential sector accounted for approximately 13% of the global delivered energy consumption by 2040. Over the period from 2012 to 2040, delivered energy consumption in the residential sector is projected to grow at an average rate of 1.4% per year, resulting in a total increase of 48%. This substantial growth in residential energy consumption is expected to fuel the demand for the residential energy management market.
Capital Intensive Deployment and Operational Costs Pose Challenges for Residential Energy Management Systems
The initial phase of deploying residential energy management systems involves significant capital investment. The involvement of local and national governments is crucial for infrastructure transformation. Setting up the transmission network between customers and the smart grid requires substantial initial investments. Moreover, successful deployment requires effective coordination across organizational boundaries, substantial process changes, and robust governance. Utility providers are also burdened with high operational and maintenance costs after deployment. These challenges contribute to reducing the demand for enhanced oil recovery in the residential energy management sector.
Investments in Grid Digitalization Drive Growth Opportunities for Residential Energy Management Market
The residential energy management market is set to experience significant growth, fueled by increased investments in grid digitalization and the implementation of advanced communication technologies. China has announced plans to invest USD 6 trillion in infrastructure development as part of its urbanization plan over the next decade. In the UK, both private and public investments for infrastructure urbanization are expected to reach approximately USD 375 billion. These substantial investments create promising opportunities for the residential energy management market, as they support the advancement of smart grid technologies and the integration of digital solutions in residential energy systems.
Interoperability Challenges Hinder Deployment and Integration of Residential Energy Management Systems
The deployment and integration of residential energy management (REM) systems face significant hurdles, primarily due to interoperability issues. These challenges arise from the need to connect legacy equipment in buildings, such as roof-top chillers, electric meters, and lighting control panels, with next-generation over the top (OTT) devices like sensors and switches in the electric power system. Achieving seamless coordination of energy flow with real-time information and analysis requires overcoming obstacles such as the lack of communication standards, incompatible IT protocols, and components that are not interoperable within REM systems. Addressing these barriers is crucial for the successful deployment and widespread interoperability of residential energy management systems.
Global Power Industry Faces Impact of COVID-19 Pandemic, Disrupting Manufacturing and Reducing Electricity Demand
The power industry worldwide has been significantly affected by the ongoing COVID-19 pandemic. In response to the current scenario, device manufacturing companies across regions had to suspend their operations and services as countries implemented partial or full lockdown strategies to combat the pandemic. The demand for electricity has witnessed a notable reduction due to the pandemic, although there has been an increase in electricity consumption in residential buildings. However, governments globally were compelled to restrict business activities to minimize the spread of the coronavirus. As a result, the decline in business operations has further negatively impacted residential energy management solutions in the short term.
Market Segmentation
- Based on component, the global residential energy management market is segmenting into hardware, software, services.
- Based on application, the residential energy management market is segmenting into flexible load management, load shedding & management, power monitoring & control.
North America Leads the Residential Energy Management Market, Driven by Increasing Electricity Demand and Energy Efficiency Goals
The residential energy management market is analyzed across major regions, including North America, Europe, Latin America, Asia Pacific, the Middle East, and Africa. North America emerges as the largest market, primarily due to the significant surge in electricity demand within the region. North America's power sector faces challenges in achieving energy efficiency targets, complying with federal carbon policies, and integrating diverse distributed energy generation sources. As a result, there is a growing focus on investments in residential energy management solutions to address these challenges and enhance energy efficiency in the residential sector.
