The number of home energy management systems (HEMS) in Europe is increasing as businesses and consumers take control of their energy usage.
In a new Berg Insight market report, a HEMS is defined as a system that at minimum consists of a solar PV system, battery storage system and a web-based management portal or smartphone app that allows for remote monitoring and control of the system.
A wider HEMS also integrates backup generators, EV chargers, heat pumps, home appliances and other connected products and systems in the home.
There were an estimated 950 000 HEMS installed in European homes at the end of 2022. An estimated 320 000 systems were added to the installed base during the year. This figure includes both new installations of solar PV + battery storage systems as well as installations of battery storage systems in existing solar PV systems (retrofits).
The penetration rate is still very low in Europe, below 1%. Germany is by far the leading market. Growing at a CAGR of 40,3%, the installed base of HEMS in Europe is estimated to reach 5,2-million systems at the end of 2027. There were at the same time an estimated 520 000 HEMS installed in North American homes at the end of 2022.
Shipments including both new installations and retrofits reached 250 000 systems during the year. Only about 0,5% of the houses and MDUs in the region now have a HEMS installed. The installed base of HEMS in North America is estimated to grow at a CAGR of 49,4% to reach 3,9-million systems at the end of 2027.
The HEMS value chain spans various companies from different industry sectors. Some companies are vertically integrated, offering a complete HEMS based on in-house developed hardware and software solutions. Other companies develop and manufacture one of the components of HEMS. Some of these companies integrate components from third-party companies to be able to offer a complete HEMS. There are also several companies that specialises in providing a software platform that enables other companies to offer HEMS.
“A number of factors indicate that the market for HEMS is on the verge of entering a strong growth period that will last for several decades,” says Martin Backman, principal snalyst at Berg Insight.
The residential sector accounts for about a quarter of the total energy consumption in North America and Europe. As the adoption of electric cars and heating systems are expected to grow fast during the coming years, household electricity consumption is also expected to increase.
“The ability to control and optimize the household energy consumption and even generate and store electricity in the home will be of key importance for both individual households and the society as a whole going forward,” Backman says. HEMS help homeowners to reduce the electricity bill and increase independence from the electricity grid.