Home Energy Management System Market - Global Outlook & Forecast 2024-2029

MARKET OVERVIEW

The global home energy management system market was valued at USD 4.02 billion in 2023 and is expected to reach USD 9.41 billion by 2029, growing at a CAGR of 15.23%. In the modern era of smart homes and smart grid, home energy management systems is a growing segment. The home energy management system market is gaining popularity globally due to the increasing technological advancements and facilitating the shift to renewable energy. These systems assist households by saving energy and money by offering a mixture of scheduling, controlling, and user information. Home energy management system helps in monitoring the energy usage of households and assist them in adapting their energy consumption behavior based on feedback received by the system. It also supports utility demand response (DR) to lessen peak demand. Individual households play a significant role in transforming global energy consumption to create a more sustainable environment. A home energy management system controls and monitors a house's energy storage, generation, and consumption. It optimizes for objectives such as self-sufficiency maximization, cost reduction, or emissions minimization. With the growing adoption of residential PV, electric mobility and heating, and dynamic tariffs, the home energy management system market is becoming more prevalent as the potential for saving increases.

Recent Developments in the Home Energy Management System Market

• In 2023, Schneider Electric launched a home energy management system integrating EV charging, storage, solar, and appliances. This Schneider Home platform is the consumer energy management system (EMS) that integrates all household appliances and energy endpoints in one interface that can be monitored through a single smartphone application.
• In 2023, Enphase Energy launched its new home energy management system in Austria and Germany. It introduced its IQ™ Energy Router family of devices to allow the integration of select third-party heat pumps and electric vehicle (EV) chargers into its solar and battery systems. The IQ Energy Router incorporates EV chargers, whereas the IQ Energy Router+ works with heat pumps and EV chargers.
• In 2023, at the 16th SNEC PV Power Expo in Shanghai, Huawei launched its brand new FusionSolar strategy and all-scenario Smart PV+Energy Storage System (ESS) solutions. These solutions show the company’s obligation to compel global transformation towards carbon neutrality.
• At CES 2023, Samsung unveils a technology that places sustainability at the user experience's core. Its efforts to expand and enrich SmartThings Energy have propelled the U.S. Environmental Protection Agency (EPA) to award Samsung the industry’s first mass-market Smart Home Energy Management Systems (SHEMS) certification.

MARKET TRENDS AND DRIVERS

Increasing Number of Smart Homes
Smart Home is a rapidly growing market due to the spiking demand for energy-efficient and intelligent technologies enabling people to remotely control their residence appliances and other household systems. Thus, the growing demand for smart homes is projected to provide growth opportunities for vendors in the home energy management system market as people equip their smart homes with various smart devices. North America, Asia-Pacific, and Europe have the highest acceptance levels in the smart cities market. At the same time, users move toward the Smart City trend, which is more visible in developed nations, including Japan, the US, Canada, and Western European countries. Technological advances like voice control, AI, and intelligent assistants have become viable control centers for smart and connected homes. They are a revolutionary development in residential spaces to enhance comfort, convenience, security, entertainment, and sustainability.

Surge in Electric Vehicle Adoption
The rise of electric vehicles (EVs) drives the demand for home energy management systems (HEMS). With the increasing adoption of electric cars due to lesser operating costs and eco-friendly transportation, the requirement for intelligent and efficient EV charging solutions becomes highly important. This move towards electric vehicles greatly impacts home energy usage patterns, creating new opportunities and challenges for households. EV charging can considerably burden a home's energy infrastructure, mainly during peak hours when electricity prices increase. Home energy management system provides a solution by allowing the users to improve their EV charging schedules.

INDUSTRY RESTRAINTS

High Initial Costs
The high investment cost hinders the wide-scale adoption of home energy management systems, especially among the growing markets of APAC and Latin America, which are highly price sensitive, despite the trend for retail automation and IoT domination. The installation of these devices can be difficult, usually demanding professional assistance. Furthermore, some home energy management systems are devised to incorporate the prevailing smart home infrastructure, which may include additional costs. Moreover, the high initial costs related to home energy management systems can be predominantly challenging for low-income households. Due to financial constraints, these consumers who can potentially benefit from this system by energy savings may find the investment difficult.

SEGMENTATION INSIGHTS

INSIGHTS BY COMPONENT
The hardware component segment dominated the global home energy management system market in 2023 and is projected to witness the highest segmental CAGR during the forecast period. Hardware includes all the physical components in the home energy management system, including energy meters, smart thermostats, and others. The central unit of the home energy management system is the key part of hardware essential for the system's functioning. Several homeowners are investing in smart devices to lessen energy costs, enhance comfort, and improve energy efficiency. For example, thermostats and lighting control systems are popular hardware components usually integrated into home energy management systems. Some incentives and regulations in certain regions require or boost the energy monitoring hardware system used for residential buildings. This propels the market demand for home energy management systems for energy-efficient upgrades.

INSIGHTS BY SYSTEM
The global home energy management system market under the system type is segmented into thermostats, lighting controls, intelligent HVAC controllers, self-monitoring systems, and advanced central controllers. The thermostat segment is expected to be the largest revenue segment of the global market in 2023. Smart thermostats have increasingly gained popularity due to their connectivity features. Mobile apps control these devices remotely and enable users to set temperatures from anywhere. Users can also incorporate them with other smart devices, such as blinds and lighting, and help manage energy. Moreover, various smart thermostats offer exhaustive energy usage reports, allowing homeowners to monitor their consumption and find opportunities for further energy savings. Thermostats predominantly control the heating, ventilation, and air conditioning (HVAC) systems. In residential energy consumption, HVAC systems are amongst the most substantial contributors, which control them efficiently and can lead to considerable energy savings. For many years, conventional thermostats have been a prevailing fixture in homes, making it easier transition for users to smart thermostats.

INSIGHTS BY TECHNOLOGY
The global home energy management system market by technology is segmented into wireless, wired, and hybrid protocols. The wireless protocols segment is expected to be the largest revenue segment of the market. Further, the wireless protocols segment comprises Wi-Fi, ZigBee, z-wave, Bluetooth, and other technologies. The market's growth can be attributed to the easy accessibility and wider reach of Wi-Fi-enabled home energy management systems. The superior technological infrastructure is pushing the demand for smart products globally. Various residential end-users deploy Wi-Fi home energy management systems for easy access. The high smartphone and Internet penetration is further adding to the revenue of home energy management system vendors. The population across the globe is increasingly equipping their homes with technologically advanced products that can be controlled through mobile devices. Thus, the surge in smart homes is expected to push the demand for home energy management systems controlled using the Zigbee and Z-Wave operated hub.

INSIGHTS BY DEPLOYMENT TYPE
The on-premises deployment type segment held the most prominent share of the global home energy management system market in 2023. The on-premises infrastructure provides a complete and real-time view to homeowners of their energy consumption and allows them to make well-versed decisions regarding their energy usage and foster sustainability. This solution is highly configurable and customizable, with integration options depending on the end user’s operational requirements. The on-premises home energy management system provides users with privacy and high control. These systems keep all the energy-related data within the home. At the same time, the cloud-based infrastructure in home energy management systems is increasingly gaining prominence and is expected to grow at a higher CAGR as compared to on-premises infrastructure.

INSIGHTS BY RESIDENCE TYPE
The multi-family residence type segment is expected to be the largest revenue segment of the global home energy management system market. In multi-family housing, like condominiums and apartment buildings, the demand for home energy management systems is increasing due to various persuasive factors. Home energy management system is increasingly becoming prevalent in shared living environments as property residents and managers are required to lessen utility bills, improve energy efficiency, and foster sustainable living. In multi-family housing, utility costs are a major concern as the expenses are usually shared among several residents or included in property management. The home energy management system helps tenants and property managers lessen their utility bills by lowering energy consumption. In multi-family housing, the residents have lesser individual costs in adopting home energy management systems as the upfront costs and maintenance are often shared among multiple families; thus, this cost-sharing aspect attracts the homeowners.

INSIGHTS BY APPLICATION
The new construction application segment is expected to be the largest revenue segment of the global home energy management system market. The global home energy management system market has huge growth opportunities in the new construction segment. Moreover, with growing construction activities in several developing countries, the rising residential sector is boosting the demand for home energy management systems by new construction. Compared to retrofitting existing buildings, integrating a home energy management system in new construction is more cost-effective and enables the smooth incorporation of energy-efficient technologies.

GEOGRAPHICAL ANALYSIS

The global home energy management system market is well-developed in North America and Europe. The rising manufacturing of automated home energy management systems will stimulate product demand in North America. With the rise in household needs, the key vendors witnessed new technologies to deliver quality and remove the existing complexities for customer experience. Further, the growing disposable income and rapid shifting towards urbanization and modernization are some of the major global market drivers. Introducing innovative and differentiated products and green technologies further fuels the market's growth.

On the other hand, APAC, Latin America, and Middle East & Africa are highly potential markets that help manufacturers expand their product segments, thereby increasing sales. The global home energy management system market is set to continue evolving to meet the needs of an ever-growing and increasingly diverse population. The APAC region's market is shifting towards environmentally friendly products with the minimum Global Warming Potential (GWP) rate. This energy-efficient technology adoption in developed economies in the Asia Pacific region is increasing the home energy management system demand.

COMPETITIVE LANDSCAPE

The global home energy management system market is projected to grow rapidly in the coming years. A large number of players characterizes the global industry. The key players in the global home energy management system market are Honeywell International, General Electric, Robert Bosch, Panasonic, and Comcast (Xfinity).

Several players focus on developing innovative products and investing in R&D initiatives to expand their product portfolios. Although established players dominate the market, there are tremendous growth opportunities for new entrants that produce low-cost products to target the developing end markets. The market competition will intensify further due to product line extensions and technological innovations. Vendors compete in factors such as brand, geographical presence, product portfolio, quality of products, cost differentiation, and others. The scope for product differentiation is low in the industry, and quality, price, and after-sales services are decisive variables affecting home energy management system sales. The growth of vendors also depends on their financial well-being, impacting technological advances and investment in various projects in the home energy management system market.

ABOUT THE REPORT

The global home energy management system market is provided for 2024 to 2029 and the base year of 2023. The market is segmented by component, system, technology, deployment, residence, application, and geography. The report provides a holistic approach to the global home energy management system market, enabling customers to analyze the industry thoroughly.