Report on the Home Energy Management System Market and its Contribution to Sustainable Development Goals

Executive Summary

The global Home Energy Management System (HEMS) market was valued at USD 4.88 billion in 2024 and is projected to expand to USD 14.14 billion by 2032, reflecting a compound annual growth rate (CAGR) of 14.30% during the forecast period of 2025–2032. This growth is intrinsically linked to the advancement of global sustainability targets, particularly the United Nations Sustainable Development Goals (SDGs). The HEMS market is a critical enabler for achieving:

• SDG 7 (Affordable and Clean Energy): By optimizing energy use and facilitating the integration of renewable sources.
• SDG 11 (Sustainable Cities and Communities): By embedding smart technology into residential infrastructure.
• SDG 12 (Responsible Consumption and Production): By empowering consumers with tools to monitor and reduce their energy footprint.
• SDG 13 (Climate Action): By reducing overall energy consumption and associated greenhouse gas emissions.

Market Dynamics and SDG Alignment

Primary Market Drivers

The expansion of the HEMS market is propelled by several key factors that align with global sustainability objectives:

• Demand for Energy Efficiency: A rising consumer and regulatory focus on reducing energy consumption directly supports the objectives of SDG 7 and SDG 12.
• Smart Home Proliferation: The integration of HEMS within the broader smart home ecosystem is fundamental to developing the intelligent and resource-efficient infrastructure required for SDG 11.
• Government Policies and Incentives: Subsidies and policies encouraging renewable energy use and conservation are key instruments for achieving national and global targets under SDG 7 and SDG 13.
• Internet of Things (IoT) Penetration: The increasing use of IoT devices enhances the capacity for real-time energy monitoring and automated management, providing the data-driven foundation necessary to advance SDG 12.

Market Segmentation Analysis and SDG Implications

By Residence Type

• Multi-Family: This segment commanded the largest market share at 88% in 2024. The deployment of centralized HEMS in apartment complexes and other multi-family units significantly contributes to SDG 11 by enhancing energy efficiency in high-density urban settings.
• Single-Family: Projected to register the highest CAGR of 15.18%, this growth reflects an increasing commitment among individual households to adopt sustainable lifestyles and practice responsible consumption, directly aligning with the principles of SDG 12.

By Deployment Type

• On-premises: Dominated the market with a 78% share in 2024, often utilized in large-scale residential developments.
• Cloud-based: Expected to experience the most rapid growth with a CAGR of 16.22%. This model enhances accessibility, remote control, and data analytics, broadening the adoption of energy-saving technologies in support of SDG 7.

By Application

• New Construction: Led the market with a 61% share in 2024. Integrating HEMS from the initial design phase is a crucial practice for building the sustainable infrastructure envisioned in SDG 11.
• Retrofit: Forecasted to grow at a 15.30% CAGR. Modernizing existing buildings with HEMS is a vital strategy for improving the sustainability of current housing stock, contributing to both SDG 11 and SDG 13.

By System

• Thermostats: Held the largest share at 30%, primarily by controlling HVAC systems, which are a primary source of household energy use. Efficient HVAC management is a direct contributor to SDG 7.
• Self-Monitoring Systems: Projected to grow at a 15.34% CAGR. These systems empower consumers with transparent data, fostering a culture of informed energy management that supports SDG 12.

By Technology

• Wireless Protocols: Accounted for a 52% revenue share in 2024, favored for their ease of installation and cost-effectiveness.
• Hybrid Systems: Expected to grow at the fastest CAGR of 15.34%, as they combine the stability of wired systems with the flexibility of wireless technology to maximize adoption.

By Component

• Hardware: The dominant segment in 2024 with a 60% market share.
• Software: Forecasted to grow at the highest CAGR of 15.82%. Advanced software, including AI-powered analytics and automation, is essential for optimizing energy consumption and achieving the efficiency targets of SDG 7 and SDG 12.

Regional Contributions to Sustainable Development Goals

• North America: Led the market in 2024, driven by high technology adoption rates and supportive government initiatives that advance progress toward SDG 7 and SDG 13.
• Asia Pacific: Is expected to exhibit the highest growth rate, with a CAGR of 16.54%. This expansion is fueled by rapid urbanization and large-scale smart city initiatives, making the region’s adoption of HEMS pivotal for achieving SDG 11.
• Europe: Remains a significant market, characterized by stringent energy regulations and high consumer consciousness, which directly contributes to climate action goals under SDG 13.
• Middle East, Africa, and Latin America: These regions are experiencing market growth driven by smart infrastructure investments and rising energy costs, contributing to the global pursuit of SDG 7.

Industry Developments and SDG Impact

Recent corporate activities underscore the industry’s role in promoting sustainability:

• January 2024: The partnership between Honeywell International Inc. and NXP Semiconductors to embed machine learning into building management systems marks a significant advancement in autonomous energy optimization, directly supporting SDG 7 and SDG 12.
• March 2024: Ecobee, Inc.’s recognition as a U.S. EPA ENERGY STAR Partner of the Year for a fourth consecutive year highlights a sustained commitment to developing products that enable consumers to improve energy efficiency, aligning with the core principles of SDG 7 and SDG 12.

Key Market Participants

• ABB
• Alarm.com
• Comcast
• Eaton
• Ecobee, Inc.
• Ecofactor
• Emerson Electric
• ENGIE Impact
• General Electric Company
• GridPoint
• Honeywell International Inc.
• Johnson Controls
• Kenmore
• Optimum Energy
• Panasonic Holdings Corporation
• Robert Bosch GmbH
• Schneider Electric SE
• Siemens
• Telkonet
• Toshiba
• Vivint Smart Home, Inc.

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy
• SDG 11: Sustainable Cities and Communities
• SDG 12: Responsible Consumption and Production
• SDG 13: Climate Action

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 7: Affordable and Clean Energy

  • Target 7.3: By 2030, double the global rate of improvement in energy efficiency.
    
    The article is centered on the Home Energy Management System (HEMS) market, which is fundamentally about improving energy efficiency in homes. It explicitly states that a key driver is the “increasing demand for energy-efficient solutions for residential spaces” and “reductions in power consumption.”
  • Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix.
    
    The article mentions that “Active policies and subsidy plans across countries urge renewable energy utilization,” indicating that HEMS are part of a broader strategy to integrate and manage renewable energy sources at the residential level.
  • Target 7.a: By 2030, enhance international cooperation to facilitate access to clean energy research and technology…
    
    The article points to this target through its mention of corporate partnerships, such as when “Honeywell and NXP Semiconductors teamed together to embed advanced machine learning into building management systems,” which facilitates the development and deployment of advanced energy optimization technology.

• SDG 11: Sustainable Cities and Communities

  • Target 11.6: By 2030, reduce the adverse per capita environmental impact of cities…
    
    The growth of the HEMS market, particularly in urban settings driven by “urbanisation” and “smart city initiatives,” directly addresses this target by lowering the energy consumption and, consequently, the environmental footprint of urban households. The dominance of the “multi-family segment” underscores its impact in dense urban areas.
  • Target 11.1: By 2030, ensure access for all to adequate, safe and affordable housing and basic services and upgrade slums.
    
    The article’s focus on “Retrofit applications” which are “gaining traction… due to growing interest in modernizing old buildings to meet today’s energy standards” is directly related to upgrading existing housing stock to be more sustainable and efficient.

• SDG 12: Responsible Consumption and Production

  • Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
    
    The article highlights a consumer-driven shift towards sustainability, noting an “increasing inclination toward a sustainable lifestyle.” The growth of “Self-Monitoring Systems” reflects a move towards more responsible consumption patterns, as consumers actively manage their energy use.

• SDG 13: Climate Action

  • Target 13.2: Integrate climate change measures into national policies, strategies and planning.
    
    The article provides evidence of this integration by mentioning “substantial government incentives encouraging energy-saving methods,” “Active policies and subsidy plans,” and “restrictive energy regulations” in regions like Europe. These policies drive the adoption of HEMS as a tool for climate action.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicators for Target 7.3 (Energy Efficiency)

  • Market Growth of Energy Efficiency Technology: The article provides a clear financial indicator of progress through the projected growth of the HEMS market from “USD 4.88 billion in 2024” to “USD 14.14 billion by 2032,” with a “CAGR of 14.30%.” This growth is a proxy for the rate of adoption of energy-efficient solutions.
  • Adoption Rate of Specific Control Systems: The market share of specific components, such as “Thermostats held the largest share at 30%,” serves as an indicator of the deployment of technologies that control major sources of household energy usage.

• Indicators for Target 11.6 (Sustainable Cities)

  • Growth in Retrofitting of Buildings: The projected growth of “Retrofit applications” at a “15.30% CAGR” is a direct indicator of efforts to modernize and improve the energy efficiency of the existing building stock in cities.
  • Market Share in Urban Housing: The fact that the “multi-family segment was the largest product segment… with a revenue share of 88% in 2024” indicates high penetration of energy management technologies in dense urban residential areas.

• Indicators for Target 12.2 (Responsible Consumption)

  • Growth in Consumer Monitoring Tools: The projected growth of “Self-Monitoring Systems” at a “15.34% CAGR” indicates an increasing consumer desire and ability to track, manage, and reduce their personal energy consumption, reflecting a shift towards more responsible consumption.
  • Qualitative Consumer Trends: The article implies a behavioral indicator by citing the “increasing inclination toward a sustainable lifestyle” as a key market driver.

4. Create a table with three columns titled ‘SDGs, Targets and Indicators’ to present the findings from analyzing the article.

Source: globenewswire.com