Sensors and Controls for Building Energy Management Systems to Top $4 Billion in 2020

Lux Research

The market in U.S. and Europe will rise at 18% annually between now and 2020, on the strength of increased penetration into buildings below 50,000 square feet, says Lux Research.

Boston, MA – May 30, 2012 — The U.S. market for sensors and controls for building energy management systems (BEMs) will rise at a 17% compound annual growth rate to $2.14 billion in 2020, while its European counterpart will reach $1.93 billion in 2020, a 19% CAGR. The market growth will be fueled by the strength of advanced technologies, downward price pressure, and government incentives, according to a Lux Research report.

Key to this growth is a slew of advanced non-invasive, cost-effective, and quick-to-install sensor and control technologies that can overcome the capital barriers of installing BEMs in an estimated 5.8 million commercial buildings under 50,000 square feet in the U.S. and 4.5 million similar buildings in Europe.

“Advanced sensors and controls promise to significantly reduce the payback period of building energy management system investments for the small building market — the highest hanging but plumpest fruit in the global building stock,” said Ryan Castilloux, Lux Research Analyst and the lead author of the report titled, “Sensors and Controls for BEMS: Providing the Neural Network to Net-Zero Energy.

Lux Research developed a demand-side forecast to quantify opportunities for BEMS applications and building automation system (BAS) applications. Among its findings:

  • Market is shifting toward BEMS. The building energy management market is rapidly transitioning from a BAS-dominant one to a BEMS-reliant one. In 2020, about 77% of the $2.14 billion U.S. market will comprise BEMS applications, and 40% will come from buildings below 50,000 square feet.

  • Policy is a promising enabler. In the U.S., 20 states have energy efficiency resource standards that will boost uptake of efficient building systems. The European Union has been similarly aggressive with goals such as 20% lower energy consumption levels by 2020. Together, these policies will foster growth of the market for sensors and controls.

  • Opportunities at the bottom of the pyramid. Developers such as Lutron, Leviton, Johnson Controls, and Honeywell will embrace advanced sensors and controls and shift strategies in order to hone in on buildings below 50,000 square feet — in 2020, the number of such buildings with BEMs will be almost 40 times what it is today.

The report, “Sensors and Controls for BEMS: Providing the Neural Network to Net-Zero Energy,” is part of Lux Research’s Efficient Building Systems Intelligence service.