Product Code: 56997
The Building Automation Systems Market was valued at USD 60.31 billion in 2020 and expected to reach USD 112.93 billion by 2026 and grow at a CAGR of 11.02% over the forecast period (2021-2026). Building automation systems, otherwise known as building automation and control systems (BACS), are automated systems that integrate and connect different facility technologies, including HVAC, lighting, surveillance, and security, among others, through information flow to a monitoring point.
- The need for energy management and the growing emphasis on overcoming utility costs continue to drive the adoption of building automation systems. In developed parts of the world, most of the high-rise buildings are equipped with these solutions.
- Energy consumption is expected to increase over the coming years; according to the US Energy Information Administration (EIA), global energy consumption is expected to grow by nearly 50% during 2018-2050, with Asia being the major consumer of energy over the years.
- In order to enhance their energy efficiency, various significant economies have already formed regulations, and other countries are following suit. For example, the 2012 Energy Efficiency Directive established measures to help the EU reach a 20% energy efficiency target by 2020; this was amended in 2018, with an energy efficiency target of at least 32.5% for 2030. Such developments in the regions are forcing businesses and homes to adopt energy-efficient solutions.
- With the increasing focus on government regulations, cost savings, and optimizing their energy consumption, homes, industries, and enterprises are actively investing in energy-efficient systems. Proactive measures taken by government organizations 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.
- Consequently, numerous opportunities for automation can now be found across small-to-medium-sized buildings and all the buildings in the world's emerging regions, majorly in the APAC region, where the number of households grew exponentially over the last two decades. The United Nations anticipates the urbanization in Asia to reach 64.1% by 2050, further opening up opportunities for the building and construction industry.
- The market is witnessing a considerable demand for interoperability between different building installations, like heating, ventilation units, and chillers, and standardization of their communication protocol. It is expected that the organizations that limit their roles to energy and HVAC control may eventually find it very difficult to grow and face commoditization of their services.
- The market for BAS is anticipated to witness higher adoption among commercial buildings than the residential buildings. The increased adoption of smart building technologies due to the increased need to cut extra expenses in the commercial buildings sector is anticipated to be a significant driver.
Key Market Trends
Increasing Demands for Smart Buildings is Boosting the Market Growth
- The increasing market for smart building across developed and developing economies is anticipated to aid BAS's demand. According to Johnson Controls' 2018 Energy Efficiency Indicator survey, companies in the US are planning to increase investments in smart building measures, including building controls and building systems integration, at a higher rate than more traditional energy efficiency measures. Canada's Building Strategy, adopted in 2017, focuses on efficiency and reducing greenhouse gas emissions, emphasizing net-zero energy buildings.
- Governments across regions have been actively involving in setting the limits for energy consumption. For instance, the Canadian government is emphasizing energy conservation through smart buildings by using offices and homes. During the same period, the Government of India also developed 'The Energy Conservation Building Code' (ECBC), which sets minimum energy performance standards for buildings and includes the building envelope, heating, ventilation, and air conditioning. Hence, the growing adoption of connected systems could help such regions to save energy.
- In Europe, a Smart Readiness Indicator was adopted as part of the 2018 revision of the European Energy Performance of Buildings Directive to promote smart building technologies. The Clean Energy for All European initiative includes a program with the European Investment Bank to offer to finance for smart buildings.
- Additionally, the United Kingdom also has kept significant efforts in smart building solutions, essentially to decrease the carbon footprint from the building sector and reduce its energy consumption.
- Moreover, with the Internet of Things (IoT), building automation is expected to continue expanding into areas of the built environment with end-to-end connectivity. In terms of building automation, according to Infineon Technologies, in 2018, there were over 230 million connected devices installed in the building, worldwide, and this figure is expected to reach 440 million by 2020, mainly because of a primary focus on making a living more convenient and counteract climate change by increasing energy efficiency.
- Various commercial buildings have deployed smart building technologies. For instance, The Edge, a commercial office building in the Netherlands, boasts a smart LED lighting system with over 30,000 sensors connected to the building management system through the IoT. The Edge uses about 70% less electricity than an average commercial office building. The Mirage in Las Vegas utilizes smart building technology to lower its energy costs through load-shedding.
North America is Expected To Hold the Major Share
- North America holds the most significant share of the global market due to the high number of early adopters in the United States and Canada. Over the forecast period, the region is expected to dominate the global market, owing to its developed infrastructure that can accommodate building automation solutions in the residential and commercial segments.
- The governments in the region are shifting toward adopting such smart solutions due to the energy-saving benefits offered by such systems. The US Green Building Council runs the 'LEED' program in collaboration with the Bank of America Charitable Foundation, providing support to the local governments that are looking for adopting sustainable solutions.
- The building automation systems market in the United States has been witnessing significant growth, like residential, commercial, and industrial consumers are adopting tremendous energy-saving solutions to deploy building automation controls.
- Various federal policy directives regarding rising energy costs, stringent regulations concerning greenhouse gas emissions, and increasing awareness about automation's benefits are significant factors driving the United States' market.
- Further, the presence of major building automation systems companies, like Siemens, coupled with the evolution of new concepts and major technological contributions, fuels the demand for building automation solutions in this region.
- The commercial sector accounts for nearly 20% of the United States' energy consumption and 12% greenhouse gas emissions in the country, according to the US Energy Information Administration. By reducing waste and conserving energy, smart buildings (equipped with building controls systems) create benefits at large.
- The advent of artificial intelligence has propelled the companies in the region to adopt AI to strengthen their video surveillance systems. This enables their products to offer increased security and safety. Hence, this is expected to boost market growth over the forecast period.
The building automation market is highly fragmented with many players involved. Companies are also increasing their market presence by introducing new products, expanding their operations, or by entering into strategic mergers and acquisitions. Some of the recent developments in the market are:
- In Nov 2019 - Johnson Controls acquired Building and Energy Management System's (BEMS) product line of the Malaysia-based EasyIO. This factor creates significant growth opportunities, as the company is expected to leverage EasyIO's products and team in the Americas, European, Middle Eastern, an d Asia-Pacific building au tomati on systems markets, as well as the global HVAC, safety, and refrigeration markets.
- In March 2019 - Mitsubishi Electric U.S. Inc. launched BEAM AX energy management system, a cloud-based solution for analyzing energy usage and costs in commercial buildings. The energy management system provides the tools to analyze energy use, track performance, forecast peak demand, detect usage abnormalities, with lower costs and monitor solar production performance and benefits.
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TABLE OF CONTENTS
- 1.1 Study Assumptions and Market Definition
- 1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET INSIGHT
- 4.1 Market Overview
- 4.2 Industry Attractiveness - Porter's Five Force Analysis
- 4.2.1 Threat of New Entrants
- 4.2.2 Bargaining Power of Buyers/Consumers
- 4.2.3 Bargaining Power of Suppliers
- 4.2.4 Threat of Substitute Products
- 4.2.5 Intensity of Competitive Rivalry
- 4.3 Indusrty Value Chain Analysis
5 MARKET DYNAMICS
- 5.1 Market Drivers
- 5.1.1 Increasing Demand for Energy and Operational Efficiency, Supported by Government Initiatives
- 5.2 Market Challenges
- 5.2.1 Absence of Technology Alignment and High Acquisition and Implementation Costs
6 MARKET SEGMENTATION
- 6.1 By Component (Market Sizing and Forecast, Trends, and Dynamics)
- 6.1.1 Hardware (Controllers and Field Devices)
- 6.1.2 Software
- 6.1.3 Services
- 6.2 By End User (Market Sizing and Forecast, Trends, and Dynamics)
- 6.2.1 Residential
- 6.2.2 Commercial
- 6.2.3 Industrial
- 6.3 Geography
- 6.3.1 North America
- 6.3.2 Europe
- 6.3.3 Asia Pacific
- 6.3.4 Latin America
- 6.3.5 Middle East & Africa
7 COMPETITIVE LANDSCAPE
- 7.1 Company Profiles
- 7.1.1 Honeywell International Inc.
- 7.1.2 ABB Ltd.
- 7.1.3 Siemens AG
- 7.1.4 Johnson Controls International PLC
- 7.1.5 Hubbell Inc.
- 7.1.6 United Technologies Corporation
- 7.1.7 Schneider Electric SE
- 7.1.8 Robert Bosch GmbH
- 7.1.9 Emerson Electric Co.
- 7.1.10 Mitsubishi Electric Corporation
- 7.1.11 Ingersoll-Rand PLC
- 7.1.12 Huawei Technologies Co. Ltd
8 INVESTMENT ANALYSIS
9 FUTURE OF THE MARKET