Smart Energy Market Will Grow at CAGR of 10.50% By 2032

Published Date : 01 Feb 2024

The global smart energy market size was exhibited at USD 146.2 billion in 2022 and is anticipated to touch around USD 394.99 billion by 2032, expanding at a CAGR of 10.50% from 2023 to 2032.

Smart Energy Market Size and Growth Rate From 2023 To 2032

Market Overview

In the modern era, energy efficiency is a crucial goal for humans when using electricity. Smart energy is a secure, powerful, sustainable, and cost-effective energy infrastructure that focuses on the advancement of renewable energy sources. Smart energy efficiently uses innovative technology to build and operate a sustainable energy management system, which is accomplished by integrating machine learning (ML), artificial intelligence (AI), and data analytics technologies into processes using Internet of Things (IoT) sensors.

The implementation of smart energy has widely spread and plays an important role in almost every industry. The installation of smart energy requires hardware and software components, including network infrastructure, instrumentation, and network management software. Smart energy systems enable users to monitor the energy and reduce emissions. Smart energy is used for industrial, residential, and commercial applications. Simulation and estimation of sustainable energy performance and management leverages AI-based strategies.

The growth of the global smart energy market is driven by several factors, including increasing investment in renewable sources of energy, favourable government regulations to reduce carbon emissions, wide adoption of innovative technology, rising demand for reliable power solutions, and rising use of IoT in the energy sector.

Moreover, the market is expected to see continued innovation and evolution due to rapid urbanization, rapid progress of industrialization, growing demand for commercial and industrial sectors for advanced power sources, and rising awareness regarding the benefits of AI-integrated solutions, further accelerating the market growth.

  • In November 2023, SparkMeter, a DC-based provider of grid management services, equipment, and software solutions, raised an investment worth USD 5 million from Honeywell Smart Energy. The company intends to use the funds to transcend the small microgrid market and up into the larger global utility market.
  • In November 2023, Enel Group, Italy's largest energy provider, announced its investment plans of €18.6 billion to overhaul its grid infrastructure by 2027.
  • In October 2023, CtrlS Datacenters, a Hyderabad-based company, announced its plans to invest worth USD 2 billion in 6 years as it focuses on new technologies. The investment will add 350 megawatts of artificial intelligence and cloud-ready hyperscale data centers (DCs) in India and some Southeast Asian markets. The company has 12 DCs with a 234 MW capacity in Mumbai, Hyderabad, Chennai, Bangalore, Noida, Lucknow, and Patna.

Regional Snapshot

North America leads the global smart energy market owing to rapid modernization and policies supporting sustainable development. The region is characterized by the increasing adoption of clean energy technologies, a focus on the advancement of smart grids, and stringent environmental regulations to reduce carbon emissions. Furthermore, increasing investment in infrastructure development and rising R&D activities in renewable energy sources in the region support the demand for AI-integrated smart energy solutions.

Asia Pacific holds the fastest-growing market. The region’s growth is projected to continue its growth during the forecast period owing to the increasing demand for sustainable sources of energy, the presence of key market players, rapid industrialization, rapid urbanization, wide adoption of advanced energy solutions, and increasing investment in generating clean sources of energy. The rising utilization of smart grids, IoT devices, and data analytics in Asia Pacific countries such as India, China, and Japan facilitate efficient management of energy resources.

To meet India’s 500-gigawatt renewable energy target and to address the annual issue of coal demand-supply mismatch, the Indian Ministry of Power has identified 81 thermal units that will replace coal with renewable energy generation by 2026.

  • In 2022, the Japanese government announced the creation of a USD 155 billion fund to encourage investment in new power grid technologies, energy-efficient homes, and other carbon footprint-reduction technologies, with a focus on smart grids and better connections between regional power grids.

Adani Energy Solution announced the strategic partnership for smart metering projects. The Adani Group company will hold a 49% stake in the joint venture, while Esyasoft will own 51%. The collaboration plan is to collectively bid for and implement smart metering projects in both the Indian and global smart energy markets, with a workforce of approximately 100 experts strategically located in India, the UAE, the UK, and KSA.

Smart Energy Market Report Scope

Report Coverage Details
Market Revenue in 2023 USD 160.82 Billion
Projected Forecast Revenue by 2032 USD 394.99 Billion
Growth Rate from 2023 to 2032 CAGR of 10.50%
Largest Market North America
Base Year 2022
Forecast Period 2023 to 2032
Regions Covered North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa

Market Dynamics


Increasing popularity of 5G technology

The rising popularity of 5G technology players is anticipated to fuel the market’s expansion in the coming years. The telecommunications sector requires smart energy solutions to operate efficiently. With high speeds and reduced latency, 5G’s connectivity enhances device capacity and provides a sophisticated infrastructure for the development of energy solutions. Therefore, the use of 5G technology in the energy sector accelerates the growth of the smart energy market.

Rising environmental concerns

The growing environmental concerns to reduce carbon footprints are expected to drive an increased demand for clean sources of energy. Environmental issues related to fossil fuels are prompting a rise in sustainable and secure energy sources. Several governments around the world are introducing favorable tax incentive programs to encourage the adoption of smart energy technologies in residential, commercial, and industrial sectors, as well as aggressively investing in installing smart energy technologies to develop sophisticated infrastructure. Thus, boosting the market’s revenue.


High initial costs and technological complexities

The high initial cost associated with the deployment of smart energy technology is projected to hamper the growth of the smart energy market. The high installation cost may encourage the residential, commercial, and industrial sectors in middle- and lower-income countries to adopt these latest technologies. In addition, the technological complexities faced by experts may restrain the market growth to a certain extent.


Continuous technologies advancements

The rapid advancements in innovative technologies are likely to boost the expansion of smart energy applications globally during the forecast period. IoT-driven energy management offers an eco-friendly, continuous, reliable, and sustainable supply of electricity to offices, homes, and industrial plants as well as enables easy monitoring of energy usage. Power plants use IoT-integrated systems to enhance energy production and optimize renewable use and energy storage.

  • In August 2023, ABB announced its investment plan in a strategic partnership with Pratexo, an edge-to-cloud acceleration platform company, to co-develop edge computing solutions for decentralized electrical networks.

Increasing investment in smart grid technologies

The rising investment in smart grid technologies is expected to offer a lucrative opportunity for smart energy market growth during the forecast period. Smart grids are electricity networks that use advanced digital technologies, sensors, and software to align with the supply and demand of electricity in real time while reducing costs and maintaining the stability of the grid.

The rising investment in smart grid technologies is expected to offer a lucrative opportunity for smart energy market growth during the forecast period. Smart grids are electricity networks that use advanced digital technologies, sensors, and software to align with the supply and demand of electricity in real time while reducing costs and maintaining the stability of the grid.

Recent Developments

  • In May 2022, Itron Inc. announced the expansion of its long-term collaboration with Microsoft to accelerate cloud adoption and the next generation of consumer and grid edge solutions for the utility and smart cities industries.
  • In January 2024, Tennessee Tech University started to lead a three-year project across Appalachia to develop smart grid modeling and testing services. The aim of the over USD 20 million project, which is being supported with USD 10 million from the Appalachian Regional Commission, is to develop and deploy services for utilities, energy tech startups, and others to model and test smart grid scenarios before implementation.
  • In October 2023, Larsen & Toubro signed a Memorandum of Understanding with IIT Indore to explore and work on activities through the framework set-up across various avenues of engagement.

Key Market Players

  • General Electric Company
  • Siemens AG
  • ABB Ltd.
  • Cisco Systems, Inc.
  • IBM Corporation
  • Honeywell International Inc.
  • Schneider Electric SE
  • Siemens Gamesa Renewable Energy
  • Itron, Inc.
  • Trilliant Holdings, Inc.
  • Landis+Gyr Group AG
  • Eaton Corporation
  • Schweitzer Engineering Laboratories, Inc.
  •, Inc.
  • Enphase Energy, Inc.

Market Segmentation

By Product

  • Smart grid
  • Digital Oilfield
  • Smart Solar
  • Home Energy Management System
  • Others

By End-User Industry

  • Residential
  • Industrial
  • Commercial

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