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The energy retrofit systems market is estimated to grow by USD 41.94 billion at a CAGR of 5.84% between 2022 and 2027. The construction industry significantly influences the demand for energy retrofit systems, particularly in HVAC equipment due to increasing construction activities for both commercial and residential buildings. Ongoing development projects, especially in APAC countries like China and India, along with the trend of smart buildings driven by environmental concerns, further bolster this demand. Additionally, the rise in office, hotel, and hospital construction activities contributes to the market's growth outlook.
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The demand for energy efficiency is notably driving the market growth, although factors such as the high installation cost may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The demand for energy efficiency is the key factor driving the market growth. Utility bills are a major contributor to the total operating costs of office buildings. Reducing energy use will help companies make significant cost savings. Due to the rise in infrastructural developments, more commercial and office buildings are expected to be established. HVAC, lighting systems, and other energy-efficient systems are needed to be installed in these buildings to improve infrastructure and reinforce energy efficiency, therefore requiring the installation of energy retrofit systems to achieve operational efficiency.
Residential complexes are also following in the footsteps of commercial and office buildings by installing these energy retrofit solutions to enjoy maximum comfort. The solutions give control to these end-users and enable them to regulate room temperature and control the lighting systems within each house in the residential complex, thereby enhancing operational efficiency and helping reduce utility bills. These factors will drive the growth of the market during the forecast period.
The rise in the incorporation of building automation systems (BASs) will fuel market growth. BASs, which control and monitor HVAC, lighting, and other electronic equipment in a building, are embedded with computing and digital communication tools that allow these systems to enhance energy efficiency. The number of integrated BAS installations has increased owing to the rise in the number of construction projects and building retrofits. The BAS technology has advanced features owing to improvements in sensor technology, the availability of cheaper and faster communication systems, and improved user interfaces.
Manufacturers are implementing open protocols, including the Internet protocol, to provide improved control solutions. BASs are becoming a common technology for enhancing the interaction and operability among HVAC, lighting, fire, and security control units of a building. The energy efficiency ensured by the ever-improving BAS technology enables building owners to enhance facility management with integrated user-friendly energy retrofit solutions. Such benefits are expected to propel the growth of the market trends during the forecast period.
The high installation cost is a major challenge to the market growth. Highly-priced and variability of the solution are the major factors due to which many end-users dissuade from installing energy retrofit systems. Moreover, for large buildings, deploying such solutions might take end-users a long time to recover the cost of installation.
For instance, Companies such as Johnson Controls and Honeywell set their prices based on per square foot. Such factors will affect the revenue of Companies and may hinder the growth of the market during the forecast period.
The market growth analysis report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market research and growth report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Ameresco - The company offers energy retrofit systems such as weatherization, HVAC and plumbing, and energy management.
The market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 15 market Companies, including:
Qualitative and quantitative analysis of Companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize Companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize Companies as dominant, leading, strong, tentative, and weak.
Based on application, the market is segmented into non-residential and residential. The market share growth by the non-residential segment will be significant during the forecast period. The non-residential segment includes commercial and industrial. This segment dominated the market by application and is expected to dominate the market during the forecast period. The need to improve energy efficiency in emerging economies is expected to encourage many commercial buildings in the region to implement energy retrofit systems. Government regulations and growing awareness about the importance of energy efficiency are other reasons driving the growth of this segment.
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The non-residential segment was valued at USD 81.06 billion in 2017 and continue to grow by 2021. The office buildings account for the maximum revenue among the non-residential buildings due to a growing need for ease in facility operations and streamlining processes and efficient workforce mobility. By adopting energy retrofit systems in office buildings, businesses can incorporate flexibility in terms of process operations and connect with their employees and other operational branches. Therefore, the adoption of energy retrofit systems is expected to drive the growth of the non-residential segment, which, in turn, is expected to propel the growth of the market in focus during the forecast period.
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Europe is projected to contribute 39% by 2027. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
Europe accounts for the majority of the share in the market in 2022. It is expected to dominate the market in focus during the forecast period. The region's efforts to cut emissions and improve energy efficiency through residential and building renovation are driving the regional market in focus.
The Global Energy Retrofit Systems Market is pivotal in combating greenhouse gas emissions, aligning with initiatives like the Paris Accord on Climate Change and DOE's Commercial Buildings Integration initiative. Manufacturers and developers focus on envelope product segments and retrofitting HVAC systems, including chillers, boilers, and air-handling equipment, to optimize energy efficiency in residential, commercial, and institutional buildings. Despite challenges like negative growth rates, energy retrofitting offers substantial benefits by reducing energy expenditures and greenhouse gas emissions while enhancing system efficiency and thermal comfort. Initiatives by the Biden Administration, financial models from institutions like the New Jersey Institute of Technology, and policy frameworks like the Mayor’s Energy of Londoner's program drive market growth. However, obstacles such as lack of information and insufficient infrastructure persist, emphasizing the need for long-term investment strategies and behavioral changes to bridge the energy efficiency gap and achieve sustainable building operations.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Energy Retrofit Systems Market Scope |
|
Market Report Coverage |
Details |
Page number |
165 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.84% |
Market growth 2023-2027 |
USD 41.94 billion |
Market structure |
Fragmented |
YoY growth (%) |
4.62 |
Regional analysis |
Europe, APAC, North America, Middle East and Africa, and South America |
Performing market contribution |
Europe at 39% |
Key countries |
US, China, Germany, France, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
AECOM, Ameresco Inc., Chevron Corp., Daikin Industries Ltd., Danfoss AS, Dow Inc., ENGIE SA, General Electric Co., Johnson Controls International Plc, Koninklijke Philips NV, National LED Inc., Ocean Insight, Orion Energy Systems Inc., Redaptive Inc., Renew Energy Partners LLC, ROI Energy Solutions Inc., Schneider Electric SE, Siemens AG, Signify NV, and Trane Technologies Plc |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our market forecasting report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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