Berg Insight, the world’s leading IoT market research provider, today released a new market report covering the Home Energy Management Systems (HEMS) market. In this study, 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.
HEMS. Image Credit: Berg Insight
There were an estimated 2.2 million HEMS installed in European homes at the end of 2023. An estimated 1.1 million 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 (i.e. retrofits). The penetration rate is still very low in Europe, at around 1.8 percent. Germany is by far the leading market and accounts for more than half of the installed base and shipments in Europe in 2023. Growing at a CAGR of 36.7 percent, the installed base of HEMS in Europe is estimated to reach 10.3 million systems at the end of 2028, corresponding to a penetration rate of 8.2 percent. There were at the same time an estimated 600,000 HEMS installed in North American homes at the end of 2023. Shipments including both new installations and retrofits reached 210,000 systems during the year. The US is estimated to account for about 95 percent of the North American market while Canada accounts for 5 percent. California, Texas and Hawaii are some of the largest HEMS markets in the US. The installed base of HEMS in North America is estimated to grow at a CAGR of 38.3 percent to reach 3.0 million systems at the end of 2028. This will then correspond to a penetration rate of 2.5 percent.
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 part of the HEMS. Some of these companies integrates components from third-party companies to be able to offer a complete HEMS. There are also several companies that specialise in providing a software platform that enables other companies to offer HEMS. Major US-based HEMS players include Enphase Energy, Tesla, Generac, Lunar Energy and Savant Systems. Leading Germany-based companies include E3/DC (Hager Group), Sonnen (Shell), Senec (EnBW), Solarwatt, SMA Solar and Viessmann Climate Solutions (Carrier). Significant UK-based companies include GivEnergy and Myenergi. France-based Schneider Electric is also an important player in the industry. Several significant players on the HEMS market in North America and Europe are based outside of the two regions, including China-based Huawei, Growatt and Sungrow; Israel-based SolarEdge; Japan-based Panasonic; and South Korea-based LG Energy Solution. Additional players active on the HEMS market in Europe and North America include Briggs & Stratton Energy Solutions, Canadian Solar, Enpal, Ferroamp, Fimer, FranklinWH Energy Storage, Fronius, GridX (E.ON), Homey, Kiwigrid, Kostal, myGEKKO (Ekon), Pixii, Polarium Energy Solutions, Powervault, Sol-Ark and Tigo Energy.
“The HEMS market in Europe and North America grew substantially in 2023, driven by homeowners’ interest in saving on electricity costs, becoming more energy resilient and reducing CO2 emissions”, says Martin Apelgren, Principal Analyst at Berg Insight. Government subsidies and tax incentives as well as the structure of the net metering or feed-in-tariff schemes in a country or region play an important role in the adoption of HEMS. “A number of recent policy changes in key markets in Europe and North America, such as the implementation of NEM 3.0 in California, catalyst the HEMS market”, continues Mr. Apelgren. Intermittent energy resources, such as wind and solar power, are accounting for a larger share of the energy mix in many countries and the demand for energy is increasing rapidly due to the growing adoption of EVs, heat pumps and other power-hungry devices in the home. This amplifies energy demand and supply volatility, putting a strain on the electricity grid. “The possibility to reduce grid electricity consumption during peak hours using HEMS will be of key importance for both individual households and the society as a whole going forward”, concludes Mr. Apelgren.