|Study Period:||2019- 2026|
|Fastest Growing Market:||North America|
|Largest Market:||North America|
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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 11.33% 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
- Energy costs are rapidly increasing, and environmental issues are a major concern today. There is increasing pressure to provide more energy-saving solutions to save money. As energy conservation has become more important recently, demand for smart buildings has increased. 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.
- The increasing government initiatives to reduce energy consumption have been one of the primary factors for adopting smart building solutions. For instance, according to the U.S.-China Economic and Security Review Commission, in China, spending on government spending on smart cities initiatives would reach USD 38.92 billion in 2023. Such developments further indicate a nation's propensity towards adopting energy efficiency solutions.
- Also, 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
- The Government of India developed 'The Energy Conservation Building Code' (ECBC), which sets minimum energy performance standards for buildings and includes the building envelope, heating, ventilation, and air conditioning. Hence, the growing adoption of smart lighting systems could help the country in saving energy.
- 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.
- However, the market growth is expected to be hindered due to a lack of competent experts skilled in assessing smart solution systems. Professionals operating in the field need to be aware of the design changes and installation in the context of future needs. Failing to do so may lead to complications.
Scope of the Report
A smart building is a building that automates its processes to control its infrastructure, lighting, security systems, heating, ventilation, air conditioning systems, and more. A smart building uses technology to make buildings more efficient, sustainable, safer, and reduce costs. Smart building solutions are part of the growing IoT and connected sensor ecosystem. The study characterizes the smart building market based on the component and applications. Solutions that automate and optimize the building’s operations and performance are studied.
As part of the Residential space, significant applications of the solution & services are driven by large housing complexes. Commercial buildings include office spaces, store spaces, and other commercial buildings, government buildings, etc. Also, Industrial buildings are also considered as part of the commercial segment.
|Middle East and Africa|
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. Building energy management systems (BEMS) has gained popularity because of the increasing interest in energy conservation and savings. Building energy management system is capable of controlling and monitoring 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 plays a key role in fulfilling these requirements.
- Companies are also offering BEMS solutions for medium-sized buildings. They are providing energy monitoring, retro and continuous commissioning, NOC availability, maintenance, trouble ticket management, AMI data analysis, and retrofit program suggestions.
- Additionally, 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.
- Furthermore, there is rising pressure for increased uptake in energy-saving and cost-effective solutions within countries such as the United Kingdom, particularly across smart buildings and cities. With consistent technological developments, IoT is evolving to meet ever more stringent requirements and business challenges. By interfacing IoT-enabled devices to a building management system, key data parameters can be used to anticipate needs, take the requisite action, and control the entire process from end to end. In the United Kingdom, the implementation of NABERS ratings will increase the need for businesses to take a proactive approach to build energy efficiency and smart buildings.
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North America to Dominate the Market Share
- North America is one of the leading markets for Smart Buildings and IoT-enabled smart devices, the region witnesses the increased application and acceptance of Smart building solutions. North America holds the prominent share of the 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 residential and commercial segments.
- With the rise in energy costs and environmental awareness, more and more Americans are looking for smart, connected, and automated building solutions; with the add-in capabilities of safety and alarm systems, fire safety, surveillance, and security are the most installed products. The IoT-enabled smart building solutions are also widely accepted in the USA. According to the Energy Impact Assessment, U.S. Energy Information Administration, the average energy charges of the USA in 2020 were 10.66 cents/KwH, and this has been on a constant rise since the 1990s.
- Energy management systems are another major revenue-generating segment under which the building HVAC systems hold a significant concentration. The United States is among the major markets for HVAC systems. According to the Energy Information Administration, or EIA, HVAC was the most energy-intensive application in commercial buildings in the United States. Building operations managers have been concerned about HVAC monitoring and management for decades, and they normally use complicated sensor networks and servers to monitor all of the data.
- High Internet Speed and deep internet penetration make North American countries an ideal hotspot for IoT, A.I., and Smart Buildings projects. Consumer spending capabilities for newer technology also augments the adoption and drives the vendors to launch new solutions targeting different needs. With reduced semiconductor and sensor costs, more and more companies and start-ups are working together to produce better Smart Building Technology. The USA, especially being a hub for start-ups and its strong financial and economic presence has become the top spot for new technology markets such as Smart Building Solution.
- 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 U.S. Green Building Council runs the 'LEED' program in collaboration with the Bank of America Charitable Foundation, providing support to the local governments looking to adopt sustainable solutions.
- Moreover, the U.S. government is upgrading its energy grids and upgrading to Advanced Metering Infrastructure (AMI) to reduce energy consumption. According to the U.S. Department of Energy, the buildings sector accounts for about 76% of the electricity used, resulting in a 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.
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The smart building market is currently fragmented, 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.
- In July 2021 - Honeywell and Nexii Building Solutions Inc. announced a strategic alliance to advance the development of low-impact buildings. This alliance designates Honeywell as the exclusive building technologies supplier for Nexii's new buildings, offering products that provide energy savings and operational efficiencies.
- April 2021 - Johnson Controls, provider of smart, healthy, and sustainable buildings solutions, has partnered with a Connected IoT Device service provider subsidiary of Arm to accelerate innovation in connectivity, security, and intelligence at the edge for Johnson Controls OpenBlue technology.
- In March 2020 - ABB acquired an Irish company Cylon Controls, to expand its presence in the smart building segment. The acquisition will expand the portfolio of commercial building solutions, emphasizing delivering innovations in energy optimization and comfort.
- May 2021 - Honeywell launched a cloud-based solution for building owners and managers that simplifies and combines operational and business data to back up better decision-making, drive greater efficiencies, and achieve sustainability goals.
- March 2021 - Siemens Smart Infrastructure has updated its Desigo CC smart building management platform to version V5.0, which marks the software’s opening for more systems and devices. The platform now offers improved connectivity and support for more integrations, such as EV charging stations. In addition, it provides new functions for easier and more flexible usability. Desigo CC V5.0 further strengthens the level of cybersecurity protection and enables a wide variety of buildings to become future-proof and easy to manage.
Table of Contents
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 Forces Analysis
4.3.1 Threat of New Entrants
4.3.2 Bargaining Power of Buyers
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
5. MARKET INSIGHTS
5.1 Market Drivers
5.1.1 Growing Concerns about the Energy Consumption Leading to Adopt Smart Solutions
5.1.2 Government Initiatives on Smart Infrastructure Projects
5.2 Market Challenges
5.2.1 Lack of Technology Alignment and Skilled Professionals
6. MARKET SEGMENTATION
184.108.40.206 Building Energy Management System
220.127.116.11 Infrastructure Management System
18.104.22.168 Intelligent Security System
22.214.171.124 Other Solutions
6.3.1 North America
6.3.3 Asia Pacific
6.3.4 Latin America
6.3.5 Middle East and Africa
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles*
7.1.1 ABB Ltd.
7.1.2 Honeywell International Inc.
7.1.3 Siemens AG
7.1.4 Schneider Electric SE
7.1.5 Huawei Technologies Co. Ltd
7.1.6 IBM Corporation
7.1.7 Cisco Systems Inc.
7.1.8 Johnson Controls Inc
7.1.9 Legrand SA
7.1.10 Avnet Inc.
7.1.11 Hitachi Ltd
7.1.12 Softdel (A UNIDEL Company)
8. INVESTMENT ANALYSIS
9. FUTURE OF THE MARKET
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Frequently Asked Questions
What is the study period of this market?
The Smart Building Market market is studied from 2019 - 2026.
What is the growth rate of Smart Building Market?
The Smart Building Market is growing at a CAGR of 11.33% over the next 5 years.
Which region has highest growth rate in Smart Building Market?
North America is growing at the highest CAGR over 2021- 2026.
Which region has largest share in Smart Building Market?
North America holds highest share in 2020.
Who are the key players in Smart Building Market?
Honeywell International Inc., Siemens AG, ABB Ltd., Schneider Electric SE, IBM Corporation are the major companies operating in Smart Building Market.