The global market size for home energy management systems (HEMS) is poised to grow to more than $2 billion by 2019, with an overall growth rate of 26.8%, according to a new report by Technavio.
The Global Home Energy Management Systems Market 2015–2019 report by the global technology research and advisory company reveals the key drivers and trends shaping the global HEMS market, as well as challenges impeding its additional growth.
Global HEMS Market, 2015–2019 ($ millions)
Home Energy Management Systems
HEMS comprise five products that help monitor and reduce energy consumption in a home: lighting controls, self-monitoring systems and services, programmable communicating thermostats, intelligent HVAC controllers, and advanced central controllers. These products help consumers communicate better with their electrical and electronic appliances by allowing them to track their real-time energy consumption using cellphones, tablets, and other devices and then also compare it with historical data, resulting in energy conservation.
These systems also have other features and abilities, such as maintaining the temperature inside homes (NEST thermostat), and alerting homeowners when there is unwanted activity present on the property (People Power’s Presence). Many systems can also be operated remotely, such as Schneider Electric’s Wiser, adding the benefit of convenience for the user. HEMS can also communicate and work with the utility grid to provide demand-response prompts from a power utility’s loads, benefiting both utilities and consumers.
Basic HEMS Functions
Key Drivers and Trends Beyond 2015
The authors highlight several key drivers of the large forecast market growth: 1) the need for energy conservation, 2) increased investment in smart grids, and 3) the provision of bundled services by utilities and service providers. Key trends influencing the market are: 1) the rise in distributed generation, 2) high investment by key players, and 3) the need for optimal use of energy.
As energy costs have increased worldwide, along with the push for energy efficiency and conservation, so has the demand for HEMS. Consumers are becoming more aware of the benefits of energy management and control, and have increased interest in these systems because they can keep track of and reduce their energy bills. Adoption is expected to increase as consumers see the considerable reductions in their energy consumption HEMS can deliver.
According to the report, the HEMS market is currently dominated by five major players: Cisco, GE, Honeywell, Panasonic, and Schneider Electric, but there are numerous vendors in the market. These key vendors are expected to increase investments, driven by the flock of new startups introducing groundbreaking new products, intensifying the competition.
The challenges that hinder the additional growth of the global HEMS market are: 1) the high initial cost of the products, 2) a limited diversity of services, and 3) an overall lack of awareness of the products. However, with the entry of many new players, the authors note, innovative HEMS are expected to emerge with much better value offers for end-users, continuing to fuel the growth of the market.