The global smart energy market size was valued at USD 143.15 billion in 2021. It is projected to reach USD 343.10 billion, growing at a CAGR of 10.2% during the forecast period (2022–2030). Smart energy is a sustainable, cost-effective, and secure energy system that prioritizes renewable energy development while minimizing production costs. The intelligent energy system comprises intelligent electricity, gas, and heat grids. Moreover, implementing intelligent energy systems can reduce conventional fossil fuel requirements. Investments in smart grid technology are one of the key market drivers for smart energy. Hardware and software components are required for smart energy installation, including instrumentation, network infrastructure, and network management software.
Many systems, such as work management systems, mobile workforce management, SCADA/DMS, and distribution automation systems, must be integrated into the system. The Indian government plans to replace 250 million traditional meters with smart meters. Advanced metering devices are in high demand in homes, businesses, and industrial facilities for energy management and consumption monitoring. However, smart energy demands substantial capital expenditures and the integration of complicated technologies, which are the initial phase's most significant obstacles.
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Massive Investment in Smart Grid Technology and Substantial Government Policies to Aid Growth
A significant increase in the demand for dependable power solutions that can support extensive manufacturing processes is projected to be the main driver propelling the market growth. The commercial and industrial sectors are investing in new power sources for various big data centers and firms involved in telecommunications, which will benefit the market's growth.
Rising concern among governments worldwide regarding growing global warming challenges is anticipated to raise the demand for solar energy. The new rebate and incentive programs for installing smart energy technologies like smart solar are being introduced by governments in various countries. It is anticipated that schemes providing tax incentives will motivate residential and industrial to install smart energy.
Increasing Demand for Alternative Energy to Drive Market
The expansion was driven mainly by increased demand for heating and cooling systems in specific geographic locations. Renewable energy sources were responsible for approximately one-quarter of the worldwide growth of energy production. The proportion of electricity in the total energy consumed worldwide has recently topped 20%, following four years in a row of double-digit demand increases. In line with the rising power demand, there will be a rise in the need for smart energy. This factor is anticipated to help the market for smart energy grow even more significantly.
Decrease in the Production of Energy Based on Fossil Fuels to Favor Market Growth
The generation of energy using renewable sources is being actively encouraged by establishing several policies. The market for steam turbines is favorably impacted due to these laws. For example, the India national renewable energy act 2015 promotes energy production from renewable energy sources to eliminate reliance on fossil fuels. Implementing these guidelines and rules would ensure the security of the energy supply and reduce emissions both locally and globally. It is expected that regulations of this kind will increase the need for smart energy.
High Capital Investment and Sophisticated Technology Integration to Restrict Market Growth
The high price of smart energy and a few restrictions, including inaccuracy and functionality loss due to frequent power outages, may negatively impact the market's expansion. Commercial enterprises implementing a smart energy product for the first time could be subject to high maintenance costs. It is anticipated that a lack of technical expertise will be a barrier to expanding the sector.
Growing Initiatives by Government to Boost Market Opportunities
Some recommendations and laws are being implemented to guarantee the energy supply's safety and decrease local and global emissions. The need for smart energy is anticipated to rise due to these laws. Government regulations, particularly mandates and financial incentives, have primarily led to the market adoption of smart meters, increasing energy systems' reliability, efficiency, and security. Companies based in the United States are currently among the major suppliers of intelligent electricity meters across the globe. The demand for smart energy forms has significantly increased due to their operations in numerous developed and developing markets.
The global smart energy market is segmented by product and end-user
Based on product, the global smart energy market is classified into Smart Grid, Digital Oilfield, Smart Solar, and Home Energy Management Systems.
The smart grid is the highest contributor and is expected to grow at a CAGR of 9.7% during the forecast period. The smart grid is a digital technology that permits bidirectional communication between the utility and its consumers and aids with transmission line sensing. The intelligent grid consists of controllers, computers, automation, new technologies, and instrumentation operations. The smart grid improves problem detection and enables network self-healing by utilizing technologies like state estimation. In addition, the smart grid includes the transmission and distribution infrastructure of the next generation to accommodate bidirectional energy flows.
Digital Oilfield is an oil business sector that uses sophisticated software and data analysis techniques to boost energy outputs and the production process. Digital Oilfield is gaining popularity because it assists oil and gas organizations to enhance operational efficiency, collaboration, data integration, production optimization, and workflow automation. In designing and deploying workflows, oil and gas firms employ digital oilfields to maximize recovery, decrease non-productive time, and increase profitability.
Various technologies, such as solar heating, photovoltaic cells, and others, harness solar energy emitted by the sun. It is a valuable non-conventional energy source and an efficient renewable solution to the increase in greenhouse gas emissions and the effects of global warming. It is intelligent solar technology to utilize solar energy to provide efficient services and long-term savings by lowering energy expenses.
A home energy management system is a smart home technology comprising hardware and software that allows the user to monitor energy consumption and output and manually regulate and automate energy use. Home energy management systems (HEMS) are rapidly gaining popularity across the globe as their underlying technology improves and small-scale solar energy and battery storage become more viable.
Based on end-user, the global smart energy market is divided into Residential, Industrial, and Commercial.
The industrial segment is the most elevated contributor to the market and is expected to grow at a CAGR of 10.7% during the projection period. The residential sector in Asia-Pacific is experiencing significant growth in energy demand due to the region's rising population and increasing need for power. In building energy systems, the following smart energy technologies can be installed: smart solar, smart grid, smart house, and energy management system.
The Climate Group and Alliance to save energy reported that 33 enterprises had avoided using energy effectively for 328 million metric tons of CO2 equivalent. The global "energy-smart" corporate push has also expanded the market. As businesses strive to boost their average annual energy production, the need for intelligent energy is anticipated to grow.
The commercial sector of a nation's economy comprises all enterprises other than those involved in manufacturing and transportation. Commercial structures include offices, hospitals, schools, police stations, warehouses, hotels, shopping malls, information technology enterprises, and banks. Smart Energy is used in light and heavy commercial settings, including small and medium-sized data centers, shopping centers, and ATMs.
The global smart energy market is classified into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.
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The United States, Canada, and Mexico compose the North American Smart Energy Market. Increasing demand for constant power solutions in the United States and Canada is anticipated to drive market expansion. Demand for cost-effective energy solutions in various household and commercial applications, including washing, cleaning, and pool heating, is expected to drive market expansion. Solar Energy is predominantly employed for small and medium-sized applications in North America. Governments encouraged purchasing and installing solar energy equipment in a few North American localities to minimize conventional energy sources. It is predicted that these new measures would create lucrative opportunities for the smart solar sector, promoting market expansion.
Europe is home to significant providers of smart energy for residential, commercial, and industrial applications. In addition, the rising demand for clean electricity in businesses of nations such as Germany and the United Kingdom will drive the expansion of the smart energy market.
China, India, Japan, South Korea, and the Rest of Asia-Pacific comprise the Asia-Pacific region. China dominates the smart energy industry because of high demand from industrial sectors such as the automobile and electricity sectors. The expansion of the market will be driven by the development of the renewable energy industry over the anticipated time range. Due to rising industry and population, the region accounts for more than half of the world's total energy consumption. Both China and India have seen significant growth in the smart energy industry. China is a major player in the hydropower, onshore, wind, and solar photovoltaic industries, and it has emerged as the world's top producer of bioelectricity. In addition, an increase in the manufacture of electric vehicles in the region is one of the essential aspects offering attractive market potential.
The LAMEA market includes Brazil, South Africa, Saudi Arabia, and the remaining LAMEA nations. Due to a lack of notable domestic competitors, the LAMEA industry is dominated by international distributors and manufacturers. In addition, trade fairs and exhibitions showcasing new technologies, suppliers, and networking for various end-use industries, such as the commercial and industrial sectors, will drive market expansion.
The global smart energy market’s key players are