Why So Many Industries Want to Own the Home Energy Management Market

Source: Anna Demeo | · ENERGY CHANGEMAKERS · | December 12, 2024

A look at the contenders

As homes grow smarter and more electrified, the home energy management system (HEMS) has emerged as a way to give homeowners control over their energy usage. Once a luxury feature, smart home tech is becoming mainstream. 

Now businesses from a range of industries are trying to capture the HEMs market. What does it take to win, and what exactly is the prize?

According to Fortune Business Insights, the global smart home market was valued at $101.07 billion in 2023 and is projected to grow to $633.20 billion by 2032. While HEMS will only be a subset of this, driven by battery and EV adoption, the size of the market is still significant.

But owning the HEMS customer offers more than just a new revenue stream; it gives companies a place in homes across the country. This translates to increased customer loyalty, brand recognition, and the potential to expand into the utility space through demand response and virtual power plant programs.

For consumers, home energy management systems can provide energy insights, schedule energy use for optimal cost savings, improve efficiency, expand resiliency, and help avoid costly service upgrades when they add electric vehicles or other services. Smart thermostats, like Nest and Ecobee, already optimize heating and cooling. HEMS represents the next step, integrating and managing distributed energy resources (DERs) to control the flow of energy between devices, the home, and the grid. 

With more than 150 million homes in the US, many companies from diverse industries — vehicle OEMs and electrical panel companies to battery storage and smart home tech giants — are vying to lead in the HEMS space. What do they need to deliver to be serious contenders?