Smart Energy Market Analysis - 2027
Global smart energy market size was valued at $124.0 billion in 2019, and is projected to reach $253.1 billion by 2027, growing at a CAGR of 9.6% from 2020 to 2027. Smart energy is a cost-effective, sustainable, and secure energy system, which focuses on sustainable energy production while reducing the production cost. The smart energy system consists of smart electricity, smart gas, and smart thermal grids. In addition, the application of smart energy system can also eliminate need of conventional fossil fuels.
Introduction
Smart energy refers to an integrated approach to energy generation, distribution, consumption, and management that leverages advanced technologies and innovative practices to enhance the efficiency, reliability, and sustainability of energy systems. It encompasses a wide range of solutions, including smart grids, energy management systems, demand response technologies, and renewable energy integration. The goal of smart energy is to optimize energy use while minimizing environmental impact, facilitating a transition towards a more sustainable and resilient energy ecosystem.
Market Dynamics
As the global population increases and energy consumption rises, there is a significant shift towards cleaner and more sustainable energy solutions. This transition is driven by the urgent need to mitigate climate change, reduce greenhouse gas emissions, and decrease reliance on fossil fuels. Renewable energy sources, such as solar, wind, hydroelectric, and geothermal power, offer a sustainable alternative that addresses environmental concerns but also ensures energy security.
In addition, advancements in technology have made renewable energy more accessible and cost-effective. The decreasing costs of solar panels and wind turbines, combined with improved efficiency and storage solutions, have fueled widespread adoption of these energy sources. As more businesses and households embrace renewables, the demand for smart energy solutions increases. Smart energy technologies facilitate the integration of renewable energy into existing grids, allowing for real-time monitoring, management, and optimization of energy resources. All these factors are expected to drive the demand for the smart energy market during the forecast period.
However, high initial investment costs present a significant challenge to the growth of the smart energy market. Implementing smart energy solutions often requires substantial upfront capital for infrastructure development, including advanced metering systems, energy management software, and the integration of renewable energy sources. For many organizations and consumers, particularly in emerging markets, these costs can be prohibitive, limiting their ability to transition to smarter energy solutions. In addition, the high initial costs are often compounded by the need for ongoing maintenance and upgrades. Smart energy systems require continuous investment to keep up with technological advancements and ensure optimal performance. All these factors hamper the growth of the smart energy market during the forecast period.
Robust investment in smart grid technologies is one of the major drivers in the smart energy market. In addition, shift toward efficient energy technologies in China, the U.S., and the UK will further boost the market demand for smart grids. For instance, Government of India is planning to replace 250 million conventional meters into smart meters by 2022. Furthermore, advanced metering infrastructure technology is expected to gain traction during the forecast timeframe, owing to increase in expenditure on infrastructure development. Advanced metering devices have strong demand in homes, offices and industrial plants for efficient energy management and easy monitoring of energy usage. However, smart energy requires high capital investment and integration of complex technologies, which are the major challenges during the initial phase. Installation of smart energy involves hardware and software components, including instrumentation, network infrastructure and network management software. In addition, the system requires integration of large number of systems, including work management systems, mobile workforce management, SCADA/DMS, and distribution automation systems. Nonetheless, favorable government policies and increase in emphasis on renewable power sources are expected to create lucrative opportunities in the market.
Market Segmentation
The global smart energy market is segmented on the basis of product, end-user industry, and region. On the basis of product, it is divided into smart grid, digital oilfield, and smart solar, and home energy management system. Based on end-user industry, it is categorized into residential, industrial, and commercial. Region-wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
By Product Type
Smart grid accounted for significant revenue share. This is attributed to rise in demand for dynamic pricing or real time pricing, coupled with application of distributed energy system in residential and commercial places.
By Product
Smart Solar is projected as the most lucrative segment.
By End-user Industry
The industrial sector accounted for highest revenue share and market growth, owing to increase in demand for smart energy in energy intensive industrial sectors, where the smart energy system helps to reduce energy cost and improve company's ecological profile, and feedback scheduling.
By End-user Industry
Industrial is projected as the most lucrative segment.
By Region
Asia-Pacific accounted for a significant market share. This is attributed to growing application of smart energy devices predominantly in China. For instance, in March 2019, China Southern Power Grid announced to invest around $25.3 billion for smart energy grid in the Pearl River Delta region. This will improve Guangzhou and Shenzhen cities power outages. In addition, growing emphasis on the usage of solar and wind power sources to reduce carbon emission will positively drive the market growth in Asia-Pacific.
By Region
Asia-Pacific would exhibit a CAGR of 10.7% during 2020-2027.
Competitive Landscape
Major players have adopted product launch, collaboration, and acquisition to sustain the intense market competition. Some of the key players profiled in the report include General Electric, Itron, Honeywell International, Siemens, ABB Group, and Larsen & Toubro.
Key Benefits for Stakeholders
- The global smart energy market analysis covers in-depth information of major industry participants.
- Porter’s five forces analysis helps analyze the potential of buyers & suppliers and the competitive scenario of the industry for strategy building.
- Major countries have been mapped according to their individual revenue contribution to the regional market.
- The report provides in-depth analysis of the global smart energy market forecast for the period 2020–2027.
- The report outlines the current global smart energy market trends and future estimations of the market from 2019 to 2027 to understand the prevailing opportunities and potential investment pockets.
- The key drivers, restraints, & market opportunity and their detailed impact analysis are explained in the study.
Smart Energy Market Report Highlights
Aspects | Details |
By Product |
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By End User Industry |
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By Region |
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Key Market Players | SIEMENS AG, ITRON, S&T Smart Energy, HONEYWELL INTERNATIONAL INC., General Electric Company, Sensus, Schneider Electric, Landis + Gyr, ABB Ltd. |
Analyst Review
According to the CXOs of leading companies, the global smart energy market is heading toward an expansion phase. This is mainly attributed to a significant surge in demand for smart grid systems and distributed energy systems in residential and commercial areas for small and medium scale applications. With such systems, operators can easily predict the demand and can prevent the overload, and it also gives the operators time to act. In addition, the consumers could also set alarms on the maximum demand level limiting the usage through load shedding. Furthermore, growing emphasis on the usage of renewable power sources, coupled with favorable government policies is expected to propel the market growth.
Robust investment in smart grid technologies and advancement in metering infrastructure are the factors that drive smart energy market growth.
Acquisition, new product launch, and agreements are the key growth strategies of smart energy market players.
To get latest version of smart energy market report can be obtained on demand from the website.
Surge in demand for electric smart meters from different end users and implementation of favourable government norms, and incentive schemes promoting smart energy, are the key trends in the market.
Asia-pacific region will provide more business opportunities for smart energy in future.
The top ten market players are selected based on two key attributes - competitive strength and market positioning
General Electric, Itron, Honeywell International, Siemens, ABB Group, and Larsen & Toubro are the leading players in smart energy market.
Smart grid segment holds the maximum share of the smart energy market
The smart energy market is expected to reach $253.1 billion by 2027.
Virtual power plants, non-residential facilities, including offices buildings, stores, municipal buildings, data centres, schools, and residential sectors are the potential customers of smart energy industry.
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