The smart building market was valued at USD 82.55 billion in 2020 and is expected to reach USD 229.10 billion by 2026 at a CAGR of over 18.50% over the forecast period (2021 - 2026). Growing energy concerns, increasing government initiatives on smart infrastructure projects are driving the market's growth positively.
- Solutions, such as the Building Energy Management System, Infrastructure Management System, and Intelligent Security System, are being adopted for smart buildings. BEMS is integrated, computerized systems for monitoring and controlling energy-related building services plant and equipment, such as HVAC systems and lighting, among others
- Smart buildings solutions not only transform the buildings into energy-efficient and sustainable buildings but also automates the way buildings can be managed and controlled.
- Energy costs are rapidly increasing, and environmental issues are a major concern today. There is increasing pressure to provide more energy-saving solution to save money. As energy conservation has become more important recently, demand for smart buildings has increased.
- The growing government initiatives to reduce the energy consumption has been the primary factor for the adoption of smart building solutions. For instance, according to Johnson Controls' 2019 Global Energy Efficiency Indicator survey found that 75% of surveyed organizations were planning to increase their investment in energy efficiency, smart building technology, and renewable energy, which is a 16% increase compared to 2018. ?
- For instance, the Canadian government is laying high emphasis on energy conservation through smart buildings, majorly, including offices and homes. Moreover, the United Kingdom also has kept considerable efforts in smart building solutions, primarily to reduce the carbon footprint from the building sector and reduce its energy consumption
- Green HVAC systems are being developed to improve energy efficiency and bring down costs. For instance, Ice Energy, a prominent energy storage company based out of Glendale, California, released an ice-powered air-conditioning unit called the Ice Bear to cool buildings and, in most cases, reduce a building's total net energy consumption.
- Reduction in energy consumption is a primary concern amongst commercial building owners and managers to save money. According to the US Energy Information Administration, almost 40% of the energy consumed in the country powers commercial and residential buildings.
Key Market Trends
Building Energy Management System to Witness a Significant Market Share
- The increasing demand for reduction in energy consumption level and continuing growth of energy use, owing to an increasing number of commercial buildings, created a need to develop innovative techniques, so as to reduce and optimize building energy use.
- Quite recently, building energy management system (BEMS) has gained popularity because of the increasing interest in energy conservation and savings. Building energy management system is capable to control and monitor the building's energy needs.
- Bigger buildings require advanced building and predictive analytics, building optimization and continuous optimization, demand response, automated building control, autoDR and enterprise integration, while small-sized buildings require a system that can provide information on incentive availability, historical billing analysis and behavioral, educational, and retrofit suggestions. BEMS is playing a key role in fulfilling these requirements.
- Companies are also offering BEMS solution for medium-sized buildings, in which they are providing energy monitoring, retro and continuous commissioning, NOC availability, maintenance and trouble ticket management, AMI data analysis, and retrofit program suggestions.
- Government initiatives, such as the EU’s Energy Performance of Buildings Directive (EPBD) and the US Commercial Building Initiative (CBI), are forcing public authorities and businesses to step up their efforts to limit greenhouse gas emissions and energy consumption at the community level.
North America to Dominate the Market Share
- North America holds the prominent share of the global market owing to the presence of the high volume of early adopters in the United States and Canada. Over the forecasted period, the region is expected to dominate the global market, owing to its developed infrastructure that can house smart automation solutions in both the residential as well as the commercial segments.
- The governments in the region are also pushing toward the adoption of such smart solutions due to the energy-saving benefits offered by such systems. The US Green Building Council runs the 'LEED' program in collaboration with the Bank of America Charitable Foundation providing support to the local governments that are looking for adopting sustainable solutions.
- Moreover, the US government is upgrading its energy grids and upgrading to Advanced Metering Infrastructure (AMI) to reduce energy consumption. According to US Department of Energy, the buildings sector accounts for about 76% of electricity used resulting in considerable amount of associated greenhouse gas (GHG) emissions, making it necessary to reduce energy consumption in buildings in order to comply with the national energy and environmental challenges and to decrease costs to building owners and tenants.?
- Energy consumption by the US residential sector and the commercial sector represents the majority of energy consumption in or on all US buildings. In 2019, total end-use energy consumption by the residential sector and commercial sector was about 21 quadrillion British thermal units (Btu). This was equal to 28% of total U.S. end-use energy consumption in 2019. End-use energy consumption includes primary energy consumption and retail electricity sales.
- Energy management systems are another major revenue-generating segment under which the building HVAC systems hold significant concentration. The United States is among the major markets for HVAC systems, owing to which the region drives demand.
The smart building market is fragmented currently with the presence of established global and domestic players across the globe. The market will be mainly driven by the addition of modern technologies and customizations to attract end-users. Vendors are concentrating primarily on offering innovative products and solutions that can optimize energy consumption and serve a high degree of automation in buildings.
- August 2019 - Honeywell International, Inc. a global vendor in smart building technology and services, introduced the next generation of Enterprise Building Integration (EBI), Command and Control Suite (CCS), and Digital Video Manager (DVM), a suite of solutions enabled by the Honeywell Forge for Buildings platform. This solutions drive facility efficiency, streamline complex functions, and deliver savings across an enterprise.
- November 2019- ABB launched IoT Dashboard for mid-sized commercial building automation solutions. Pre-programmed frames make it easy to configure the dashboard and deliver quick results. The addition of the KNX standard drives interoperability and makes it ideal for use in all commercial building types. The IoT Dashboard can be accessed remotely via a PC or handheld device, allowing users to access several facilities from anywhere.
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1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
4.1 Market Overview
4.2 Industry Value Chain Analysis
4.3 Industry Attractiveness - Porter's Five Force Analysis
4.3.1 Threat of New Entrants
4.3.2 Bargaining Power of Buyers/Consumers
4.3.3 Bargaining Power of Suppliers
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
4.4 Assessment of the COVID-19 Impact on the Market
4.5 Market Drivers?
4.5.1 Growing Concerns about the Energy Consumption Leading to Adopt Smart Solutions
4.5.2 Government Initiatives on Smart Infrastructure Projects
4.6 Market Challenges
4.6.1 Lack of Technology AlignmentÂ and Skilled Professionals
5 MARKET SEGMENTATION
220.127.116.11 Building Energy Management System
18.104.22.168 Infrastructure Management System
22.214.171.124 Intelligent Security System
126.96.36.199 Other Solutions
5.3.1 North America
5.3.3 Asia Pacific
5.3.4 Latin America
5.3.5 Middle East and Africa
6 COMPETITIVE LANDSCAPE
6.1 Company Profiles*
6.1.1 ABB Ltd.
6.1.2 Honeywell International Inc.
6.1.3 Siemens AG
6.1.4 Schneider Electric SE
6.1.5 Huawei Technologies Co. Ltd
6.1.6 IBM Corporation
6.1.7 Cisco Systems Inc.
6.1.8 Johnson Controls Inc
6.1.9 Legrand SA
6.1.10 Avnet Inc.
6.1.11 Hitachi Ltd
6.1.12 Softdel (A UNIDEL Company)
7 INVESTMENT ANALYSIS
8 FUTURE OF THE MARKET
Secondary Research Information is collected from a number of publicly available as well as paid databases. Public sources involve publications by different associations and governments, annual reports and statements of companies, white papers and research publications by recognized industry experts and renowned academia etc. Paid data sources include third party authentic industry databases.
Once data collection is done through secondary research, primary interviews are conducted with different stakeholders across the value chain like manufacturers, distributors, ingredient/input suppliers, end customers and other key opinion leaders of the industry. Primary research is used both to validate the data points obtained from secondary research and to fill in the data gaps after secondary research.
The market engineering phase involves analyzing the data collected, market breakdown and forecasting. Macroeconomic indicators and bottom-up and top-down approaches are used to arrive at a complete set of data points that give way to valuable qualitative and quantitative insights. Each data point is verified by the process of data triangulation to validate the numbers and arrive at close estimates.
The market engineered data is verified and validated by a number of experts, both in-house and external.
REPORT WRITING/ PRESENTATION
After the data is curated by the mentioned highly sophisticated process, the analysts begin to write the report. Garnering insights from data and forecasts, insights are drawn to visualize the entire ecosystem in a single report.