IoT Energy Management Market Size, Share & COVID-19 Impact Analysis, By Component (Solution/Platform/System and Services), By Application (Smart Cities, Smart Utilities, and Industrial IoT), By End User (Commercial and Industrial), and Regional Forecast, 2023 – 2030

The global IoT energy management market size was valued at USD 61.02 billion in 2022. The market is projected to grow from USD 70.58 billion in 2023 to USD 222.56 billion by 2030, exhibiting a CAGR of 17.8%. Asia Pacific dominated the global market with a share of 36.14% in 2022.

IoT energy management is a process that includes planning and management of energy consumption in the commercial and industrial sectors. This system is designed to monitor, control, and optimize energy consumption in various systems and devices. Moreover, the system collects real-time data from sensors and devices to analyze energy usage patterns, identify inefficiencies, and make informed decisions to reduce energy consumption and costs. It is majorly used in smart utility and industrial IoT applications to optimize manufacturing processes and monitor energy usage in factories.

In the scope of work, we have included solutions offered by companies such as Siemens AG, Johnson Controls International PLC, GridPoint, Inc., IoT.nxt, Pheonix Contact, WebNMS, EcoEnergy Insights, and others.

COVID-19 IMPACT

Growing Adoption of Advanced Energy Management Systems Fueled the Market Growth

The COVID-19 pandemic caused economic disruptions across the world. The outpouring effects of COVID-19 led the global economy toward a recession. As the pandemic continued, it posed a unique challenge for both frontend applications and backend technologies. The adverse effects of coronavirus also affected digital spending among industries across the globe. As per the survey, the overall ICT global spending would decline by 1.6% and reach around USD 4.1 trillion in 2020. Whereas telecom spending is likely to be less impacted.

However, on the other side, the increased focus on remote monitoring and control led to a greater demand for internet of things IoT solutions to manage energy usage in smart buildings and industrial facilities. As more people worked from home, the need for efficient energy management in residential spaces also grew. After the pandemic hit, governments across the globe began undertaking various initiatives to streamline and support economic activities. For instance, in June 2020, the government of the U.K. adopted a package to protect its economy that included increased public spending on infrastructure, including green projects such as retrofitting houses to achieve energy efficiency. Furthermore, as the industries initiated the reopening of the offices, it has significantly invested in efficient energy consumption, owing to the increasing market challenges after the pandemic.

Considering these factors, the market recorded significant growth during the post-pandemic period.  

LATEST TRENDS

Rising Adoption of Cloud-based Real-Time Energy Management System for Energy Consumption

The implementation of the Real-time Energy Management (RTEM) system results in improving awareness of energy consumption and usage across various industries such as oil and gas, energy and utilities, and building automation. Cloud-based real-time energy management system enables commercial and industrial end users to recycle and save energy by monitoring real-time energy consumption with the analytical report. Furthermore, it allows organizations to measure the impact of overall energy consumption of the organizations.

Moreover, the rising trend of integrating cloud-based energy management in real-time management systems for maintaining energy consumption across commercial as well as industrial end users is expected to increase the demand for real-time energy management systems such as Heating, Ventilation, and Air Conditioning (HVAC) systems. Furthermore, a cloud-based real-time energy management system offers benefits such as facilitating users to utilize the data more efficiently, upgrading as well as updating software in real-time. In addition, the rising demand for real-time management solutions for energy management is expected to play an important role in market growth over the forecast period.

This can be attributed to the advancements in technologies such as IoT, Artificial Intelligence (AI), and big data analytics.

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IOT ENERGY MANAGEMENT MARKET GROWTH FACTORS

Surge in Implementation of Smart Grids and Smart Meters to Fuel the Market Growth

Smart grids use advanced communication and advanced electricity network that utilizes two-way communication and information to optimize the generation, transmission, and distribution of energy. IoT-based smart meters are key components of smart energy grids, which enable data collection on energy usage, which is further processed to enhance billing, load management, and demand response programs. IoT-based energy management systems that incorporate smart grids and smart meter are becoming increasingly popular globally. Numerous countries are implementing these technologies to address energy security, reduce carbon emissions, and enhance efficiency. For instance, in January 2022, MicroEJ, a provider of software containers for IoT, partnered with Landis+Gyr, to enhance the app development environment for next-gen smart meters enabling more efficient and sustainable energy management.

Smart grids and smart meters are driving the global transition toward a sustainable and energy efficient systems. By enabling real-time monitoring and management of energy consumption, these technologies empower consumers to make informed decisions about their energy use and contribute to a more stable and reliable electricity grid. These factors are expected to drive the IoT energy management market growth during the forecast period.

RESTRAINING FACTORS

High Initial Cost Associated with System Installation and Post Maintenance Services to Impede the Market Growth

The cost of the IoT devices and energy management systems require high initial investment for installations. Maintenance cost management and visibility is essential to analyze operational spending. The initial installation of energy management systems requires technical expertise and demands high capital investments. Manufacturers or businesses often have limited capital expenditure available for end-use energy efficiency applications. Moreover, energy management systems often face compatibility issue with the third party integrated IoT devices due to which the cost of software integration and post-maintenance further increases. Thus, high costs associated with software integration and post-maintenance service may affect the IoT-based energy management system market growth over the forecast period.

SEGMENTATION

By Component Analysis

Increasing Product Adoption for Efficient Energy Usage to Boost the Solution/Platform/System Segment Growth

Based on component, the market is bifurcated into solution/platform/system and services.

The solution/platform/system segment holds the largest share in the market, as industries are using IoT energy management system to monitor machinery and processes and identifying inefficiencies and opportunities for energy conservation. Moreover, these IoT energy management platforms provides real-time data which helps industrial facilities to optimize production while minimizing energy usage.

The services segment is anticipated to grow at a prominent CAGR over the forecast period. As it offers quick support and maintenance services to enhance industrial production process. Further, it provides high quality machining and manufacturing services in real-time, which plays an important role optimize energy usage. Thus, growing awareness regarding efficient energy usage among manufacturing plants is expected to drive the market growth.

By Application Analysis

Smart Utilities Segment Held the Largest Share in 2022 Due to Growing Smart Meter Demand for Grid Optimization

Based on application, the market is divided into smart cities, smart utilities, and industrial IoT.

The smart utilities segment held the largest share in 2022. This is primarily attributed to the rising adoption of smart meters across the leading countries, including the U.S., the U.K., France, China, Japan, Australia, and others. Further, many states in the U.S., such as California and Texas, have been rolling out smart meters to residential and commercial customers to improve energy management. Owing to these factors, the segment is likely to continue its dominance during the forecast period.

The smart cities segment is expected to grow at a significant CAGR during the forecast period. This comes as smart city adoption has been a global trend, with cities across the globe embracing the IoT technology. For instance, Barcelona, Spain, has been a pioneer in using technology to enhance urban life, with initiatives ranging from smart street lighting to data-driven urban planning.

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By End User Analysis

Rising Need for Efficient Resource Utilization Propelled the Adoption of IoT Energy Management in Industrial Processes

By end user, the market is classified as commercial and industrial.

The industrial segment captured the highest share in the market in 2022. This comes as IoT technologies help the industrial sector implement predictive maintenance to prevent costly equipment failures and downtime, leading to more efficient operations and reduced energy wastage. Moreover, IoT sensors and devices are being integrated into manufacturing processes, supply chains, and equipment to gather real-time data on energy usage, production efficiency, and equipment performance. This data is then analyzed to identify areas for improvement and implement energy-saving strategies.

The commercial segment is anticipated to grow at a significant CAGR during the forecast period. Retail stores, shopping malls, and hotels are increasingly incorporating IoT energy management solutions that are capable of automatically adjust lighting, temperature, and other factors based on occupancy and time of day. The increasing usage of these systems in commercial sector is expected to fuel the market growth.

REGIONAL INSIGHTS

By region, the market has been analyzed across five major regions namely North America, South America, Europe, the Middle East and Africa, and Asia Pacific.

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Asia Pacific captured the largest IoT energy management market share in 2022 and it is expected to continue its dominance during the forecast period. The region constitutes the world’s largest smart meter market by far with around 1.6 billion electricity and gas customers. In the Asia Pacific, China has been a significant adopter of smart meters, deploying them extensively to enhance energy efficiency. According to the International Energy Agency (IEA), China plans to modernize and expand its power grid infrastructure by investing over USD 442 billion during the period 2021-2025. Moreover, the government of India is planning to roll out around 250 million smart meters across the country by 2025/2026. This target is expected to be achieved by giving contract to well established players for deployment of smart meters in multiple cities. Thus, significant focus on the deployment of IoT energy management system across various countries in the region is expected to fuel the market growth in the coming years.

North America is expected to showcase moderate growth in coming years, as the U.S. and Canada governments are implementing strict policies and regulations on the consumption of energy resources. For instance, in 2022, the U.S. received a funding of USD 10.5 billion in the Grid Resilience Innovative Partnership (GRIP) Program for upgrading and expanding the U.S. electric grids. In addition, utilities are integrating IoT technology to improve grid management and enable demand response program. The U.S. government’s focus on energy efficiency and sustainability has further propelled the adoption of IoT energy management solutions throughout the country.

The Europe market is expected to grow at a prominent CAGR during the forecast period. Internet of Things (IoT) systems are helping businesses to comply with energy regulations and sustainability standards in Europe. Many countries in the region have set ambitious energy efficiency targets and IoT energy management plays a crucial role in achieving these goals. According to the American Council for an Energy-efficient Economy, Germany and Italy are the most energy efficient countries in the world, followed by France and the U.K. Moreover, according to the European Commission action plan, the commission expects about USD 633 billion of investment in the European electricity grid by 2030, of which USD 184 billion would be for digitalization (automated grid management, smart meters, digital technologies for metering and improvement on the field operations).

The Middle East and Africa and South America regions are expected to showcase noteworthy growth during the forecast period. The MEA region experiences rapid urbanization and economic growth owing to increasing focus on efficient energy usage. IoT enabled devices are being utilized in sectors such as smart cities, smart utilities, and industrial processes to monitor and optimize energy consumption. Moreover, in South America, governments, businesses, and organizations are increasingly recognizing the potential of IoT energy management in achieving their energy conservation and sustainability objectives. These factors play an important role in propelling the market growth in the region.

KEY INDUSTRY PLAYERS

Key Players Are Engaged in Expanding Their Solution Offerings Globally

The market players are investing in advanced technologies such as Artificial Intelligence (AI), IoT, and cloud to improve the capabilities of their platforms. Furthermore, key players are adopting various strategies such as collaborations, partnerships, mergers, and acquisitions to expand their market presence.

List of Key Companies in IoT Energy Management Market:

• GridPoint, Inc. (U.S.)


• IoT.nxt (South Africa)


• Information Grid Ltd. (U.K.)


• Aeris Communications Inc. (U.S.)


• Carrier Global Corporation (EcoEnergy Insights) (U.K.)


• WebNMS (Zoho Corporation Pvt. Ltd.) (India)


• Pheonix Contact (Germany)


• Coda Cloud Limited (U.K.)


• Siemens AG (Germany)


• Johnson Controls International PLC (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• August 2023 – Siemens launched an advanced generation of line monitoring relays, the SIRIUS 3UG5, integrating IoT technology for effective energy management. These relays enhanced grid stability and quality, serving critical sectors such as hospitals and industries, offering valuable data insights and ensuring optimal component performance.


• August 2023 – Zoho Corporation launched Zoho FSM, a comprehensive field service management platform tailored for business operating in the energy sector. With automation, and operational transparency, the platform would empower businesses to efficiently handle field operations while delivering exceptional service in industries such as utilities, HVAC, and others.


• July 2023 – Johnson Controls acquired FM:Systems, a digital workplace management and IoT solutions provider, to enhance its digital transformation offerings. The acquisition aligned with the company's focus on autonomous and digitally enabled buildings, integrating FM:Systems' predictive workplace management platform with existing building automation services and energy management solutions.


• October 2022 – GridPoint partnered with SMG Energy, a provider of customized energy and sustainability solutions for small and medium sized businesses. This partnership aimed to enhance the energy efficiency and sustainability of commercial buildings, addressing the significant impact of buildings on global GHG emissions and energy waste.


• July 2022 – IoT.nxt partnered with Vodacom Business Mozambique, to launch its innovative IoT platform in Mozambique. The collaboration aimed to address unique challenges such as remote facilities, limited connectivity, and infrastructure issues offering end-to-end solutions that support various industries, including operational process digitization and business modernization.

REPORT COVERAGE

An Infographic Representation of IoT Energy Management Market

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The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product/service types, and leading applications of the product. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the aspects mentioned above, the report encompasses several factors that contributed to the growth of the market in recent years.

Report Scope & Segmentation