The global building automation system market was valued at US$44,067 million in 2017, and is expected to reach a value of US$82,517.4 million by 2023, registering a compound annual growth rate of 11% over the period between 2018 and 2023, according to Orbis Research.
Energy management needs and the growing emphasis on reducing utility costs continue to drive the adoption of building automation systems. The majority of the large buildings today are equipped with these solutions in the developed parts of the world. Proactive measures taken by government for the implementation of standards, such as ISO 50001 (energy-management-system standard) in the building sector have the potential to stimulate the integration of building automation systems.
Building automation solutions are emerging as cost-effective tools for essentially all forms of buildings, regardless of energy costs, usage or climatic conditions. The average net energy savings per installation (of these systems) is about 36% for space heating, water heating, and cooling/ventilation (HVAC) and 23% for lighting (as of 2016).
The reduced energy consumption is also contributing toward climate change mitigation. Europe’s emission from fuel combustion is likely to witness a reduction of 9-14% by 2035 (according to a report by European Union). This is further driving the growth in the market, due to the government’s support and promotion for further uptake of smart grids, demand-side management and on-site renewable energy production.
Moreover, standards like ISO 50002 (energy-management-system standard) in the building sector are pushing the implementation, which has the potential to stimulate the integration of energy-saving control systems. Furthermore, environmental certification of buildings, like LEED and BREEAM, are also playing an increasingly important role, thus driving the adoption for building automation solutions.
Due to rising environmental concerns, many organizations are adopting smart building networks to reduce the energy consumption and operational costs in commercial buildings, thus, favoring the market. Globally, it was also estimated that commercial building owners and managers are expected to invest US$960 billion between 2016 and 2023 on making their existing infrastructure more eco-friendly (according to Smart Glass International).
Furthermore, growth in business and emerging business opportunities in developing economies, such as Brazil, China and India are driving the establishments of new infrastructure in developing nations. With many consumers opting for smart office systems for future proofing, the demand for building management system software is increasing. However, security concerns related to the safety of networks and devices is one of the factors restraining the adoption. Increasing security breaches and growing threats to organizations of cybercriminal organizations are creating cynicism.
Germany to Hold the Largest Market Share in Europe
Germany has been a leader on the technological front in Europe, thanks to government regulations, which are encouraging the adoption of smart services. This is expected to drive the growth of the smart office and smart homes market in the country. The introduction of Energy Performance Certificates (EPC) for buildings in 2014 had significantly favored the market for building automation systems in Germany.
Renovation toward energy-efficient buildings is expected to increase, as Germany will need to achieve 1.5% additional savings as per the Energy Efficiency Directive (EED). In Germany, the minimum performance of new buildings has been set for optimal thermal comfort, indoor air quality and U-values for non-residential buildings. Additionally, in new buildings, minimum performance of technical building systems has been set for control of heating, generation distribution, and hot water systems.