New numbers from Navigant Research, examining the regional and global trends in the home energy management market, have predicted the industry to generate more than $22 billion in revenue from 2014 to 2023.
“Competition is heating up among vendors and, at the same time, [Home Energy Management] HEM products are becoming more accessible to consumers, with retailers such as Best Buy, Staples, and Lowe’s marketing products that include energy management features,” says Neil Strother, principal research analyst with Navigant Research. “Even though the HEM market is still in its early stages of growth, 2015 is shaping up to be a pivotal year for expansion.”
Everyone across the industry, including product vendors, utilities, service providers, retailers, and other stakeholders, are all reporting increased activity in the market. There is also a growing awareness amongst consumers about the new tools that exist to manage home energy usage, thanks in part to big news items such as Google’s acquisition of Nest Labs in January of 2014.
As such, Navigant Research is predicting the HEM market to grow from $586.9 million in 2013 to $2.4 billion in 2023, growing at a compound annual growth rate of 15.2%.
HEM Revenue by Region, World Markets: 2013-2023
Annual revenue is expected to peak in 2020 thanks to a government-mandated deployment of millions of smart meters and similar HEM equipment in homes and businesses, which is expected to be completed throughout Great Britain.
“Competitors in the HEM market have been active as well,” the authors of the report write in the executive summary.
Honeywell announced its Lyric smart thermostat in June 2014, which features a geofencing capability. The following month, thermostat maker Carrier and Ceiva Energy formed a partnership to jointly offer a solution to utilities that enables them to deploy demand response (DR) and energy efficiency programs. In addition, retailers like Best Buy, Staples, and Lowe’s have all been marketing products that feature energy management as part of their feature sets.
The author’s highlight several “key drivers” they believe are behind the HEM market success: desire to reduce the energy bill; regulatory mandates; the rise of smart thermostats; a desire to be green; smart meters; and the sheer convenience of such technology. However, unsurprisingly, there are several “key inhibitors” that present the HEM market with “notable challenges”: consumer indifference to electricity costs; upfront costs and difficulty of new technology; and weak utility support.
Nevertheless, according to Nest, learning thermostats can save you money, and are continuing to grow in popularity.