GVR Report cover Energy Retrofit Systems Market Size, Share & Trends Report

Energy Retrofit Systems Market Size, Share & Trends Analysis Report By Application (Residential, Non-residential), By Product (LED Retrofit Lighting, Envelope), By Region (Europe, APAC), And Segment Forecasts, 2020 - 2028

  • Report ID: GVR-4-68038-739-1
  • Number of Pages: 80
  • Format: Electronic (PDF)

Report Overview

The energy retrofit systems market size was valued at USD 142.88 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 4.5% from 2020 to 2028. Factors, such as growing concerns about Greenhouse Gas (GHG) emissions and strict regulations to decrease carbon footprint, are projected to drive the global market. The growing adoption of HVAC appliances across various sectors is projected to further boost the product demand. Most HVAC and lighting technologies have an average shelf life of 25 years, after which, the technology is termed obsolete and needs replacement. Retrofitting of these systems leads to a substantial reduction in energy costs for homes and offices. The market in the U.S. is expected to witness significant growth over the forecast period due to large-scale construction and adoption of retrofit systems to replace the existing ones, which have proven to be expensive and energy-consuming.

U.S. Energy Retrofit Systems Market Size, by Product, 2018 - 2028 (USD Billion)

Since the Federal Government of the U.S. opted out of the Paris Accord on Climate Change, there has been speculation about the non-renewable energy companies capitalizing on the opportunity. Also, awareness to adopt renewable energy is projected to continue to grow at a robust rate on account of financial sops offered by government agencies. For the enhanced performance of energy retrofit system modules, these components need to be continuously technologically upgraded.

Manufacturers/developers of these components invest a significant proportion of the annual budget in R&D. The systems function perfectly only when all components are integrated to match the system requirements. Integrators and assemblers integrate all components to create energy retrofit systems as an integrated offering. Siemens, General Electric, Schneider Electric, and Johnson Controls are some of the companies that design and integrate such systems for various applications.

Energy Retrofit Systems Market Trends 

The need to improve energy efficiency is one of the main drivers behind the growth of the energy retrofit system market during the forecast period. Energy efficiency is of paramount importance to consumers of battery-powered devices and consumers with limited access to power sources. The government's favorable stimulus measures in the United States are expected to drive the housing sector market. Ability to remotely control HVAC and other energy-using devices, and to collect details about energy-using electronic devices factors are expected to drive the energy retrofit system market over the forecast period.

In addition, increased energy system installations and widespread accessibility of smart devices are expected to drive market growth over the forecast period. Consumer energy-related demands in the home, trade and industry are increasing on a day-today basis. For residential customers, presence of smart home devices has provided them the ability for continuous monitoring of energy consumption. These factors are expected to drive the energy retrofit system market over the forecast period.

Technologies used in energy retrofit systems are still expensive as the R&D incurs high costs. Moreover, capital spending is largely correlated with the financial health of a company. In addition, the return on investment is gradual and may take a period of nearly three to four years. These factors prove to be major restraints for the market.

Hidden costs refer to any costs that are not usually included in the economic models of the company. Apart from the core cost of energy retrofit systems, several hidden costs, such as general overhead costs, industry-specific costs with respect to the choice of an energy-efficient option, and the potential loss of utility associated with energy-efficient choices add up to the total investment necessary. This makes energy retrofit systems even more expensive, and thus hinders the market growth.

Product Insights

On the basis of product, the global market has been segmented into envelope, LED retrofit lighting, HVAC retrofit, and appliances. The envelope product segment accounted for the maximum revenue share of more than 51% of the global market in 2020. The segment is anticipated to maintain its dominance expanding further at a steady CAGR over the forecast period.

Retrofitting building envelope provides insulation and air barrier to walls, which improves thermal comfort and reduces drafts. Thus, the amount of heat loss gets reduced, which benefits occupants and owners with reduced energy usage and carbon footprint. This will also lead to a positive public opinion by displaying a commitment to environmental sustainability. However, the LED retrofit lighting segment is estimated to register the fastest CAGR of over 5% from 2020 to 2028.

Application Insights

The non-residential segment led the market in 2020 and accounted for the largest revenue share of more than 71% The growth can be attributed to the large-scale installation of HVAC systems and technological obsolescence of traditional systems used in non-residential buildings. Areas that experience extreme winter conditions will particularly benefit from the retrofitting of power systems owing to their prime reliance on HVAC and lighting systems.

Global Energy Retrofit Systems Market Share, by Application, 2020 (%)

The residential application segment is projected to grow at the fastest CAGR during the forecast period. Increasingly expensive residential properties and the formulation of laws for protecting old buildings have resulted in modifications to existing buildings, with a large number of consumers opting for retrofits. Moreover, the rise in expenses related to energy systems and the strict implementation of various emission regulations forcing several industrial and commercial organizations to adopt advanced energy-efficient modernization systems.

Regional Insights

The Europe region dominated the global market in 2020 and accounted for the largest revenue share of more than 47% in 2020. Russia led the Europe regional market in 2020, in terms of revenue. The regional market is primarily driven by the rising product adoption on account of the growing concerns about GHG emissions and strict regulations to decrease carbon footprint. Furthermore, the rising population coupled with increasing demand for efficient and clean energy is expected to propel market growth.

Moreover, Europe has been very active in using R&D for clean and efficient energy generation, which supports the market growth. The availability of funding in the European Union for energy conservation and energy efficiency projects has also been one of the major factors driving the regional market growth. On the other hand, Asia Pacific is estimated to register the fastest CAGR during the forecast period.

Germany is one of the earliest adopters of clean energy solutions for residential and non-residential buildings around the world. In the non-residential sector, HVAC systems have been installed on a large scale and traditional systems have become technologically obsolete and are expected to trigger a major transition for modernization. This is due to the increasing importance of clean energy solutions under the energy law introduced by the US government.

Energy Retrofit Systems Market Trends by Region

Moreover, based on acts, relevant policies and regulations have been established to cater to different aspects of distinct sectors. Such parameters have proven to be beneficial for penetrating the energy retrofit systems business model in Germany.

In the UK, HVAC retrofitting is often more common in commercial buildings for decreasing energy consumption by 35 to 40% in high-rise buildings and by 30 to 35% in small offices. It provides more control over the temperature and humidity, resulting in better comfort for tenants. Also, retrofitting HVAC equipment is much more affordable than financing a complete commercial HVAC system replacement that gives a better ROI.

The Asia Pacific region will register the highest growth rates during the forecast period. The market in this region are led by China, Japan and India. Reduction in the cost of renewable energy and the cost of infrastructure, supported by rapid production of energy modernization systems in the region and the adoption of these systems by residential and commercial end users in the Asia-Pacific region is expected to boost the market growth.

Key Companies & Market Share Insights

Leading market players compete based on their product development capabilities and new technologies used in product formulations. Established players, such as Ameresco, are investing in the development of innovative and sustainable solutions for formulating new and advanced solutions that give them an edge over their competitors.

For instance, in June 2021, Ameresco announced that it partnered with Defense Logistics Agency Energy and Cannon Air Force Base for USD 19 million Energy Savings Performance Contract (ESPC). The project designed by Ameresco will provide tangible facility improvements and enable recurring reductions in utility costs. On utilizing the DOE Energy Savings Performance Contract, the project will help enhance Cannon Air Force Base’s mission capabilities and address its sustainability and energy goals. Some of the prominent players operating in the global energy retrofit systems market are:

  • Daikin Industries Ltd.

  • Ameresco

  • Eaton


  • Johnson Controls

  • Orion Energy Systems, Inc.

  • Siemens

  • Trane

Energy Retrofit Systems Market Report Scope

Report Attribute


Market size value in 2021

USD 145.74 billion

Revenue forecast in 2028

USD 203.12 billion

Growth rate

CAGR of 4.5% from 2020 to 2028

Base year for estimation


Historical data

2017 - 2019

Forecast period

2020 - 2028

Quantitative units

Revenue in USD Billion, and CAGR from 2020 to 2028

Report coverage

Revenue forecast, company ranking, competitive landscape, growth factors, and trends

Segments covered

Product, application, region

Region scope

North America; Europe; Asia Pacific; Central & South America; and Middle East & Africa

Country scope

U.S.; Canada; Mexico; U.K.; Germany; Russia; Spain; Italy; France; China; Japan; South Korea; India; Australia; Brazil; Colombia; Paraguay; Saudi Arabia; UAE; South Africa; Egypt

Key companies profiled

Daikin Industries Ltd.; Ameresco; Eaton; AECOM; Johnson Controls; Orion Energy Systems, Inc.; Siemens; Trane; Signify Holding; Engie; General Electric; Schneider Electric

Customization scope

Free report customization (equivalent up to 8 analyst’s working days) with purchase. Addition or alteration to country, regional, and segment scope

Pricing and purchase options

Avail customized purchase options to meet your exact research needs. Explore purchase options


Global Energy Retrofit Systems Market Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2028. For this study, Grand View Research has segmented the global energy retrofit systems market report based on product, application, and region:

Global Energy Retrofit Systems Market Segmentation

  • Product Outlook (Revenue, USD Billion, 2017 - 2028)

    • Envelope

    • LED Retrofit Lighting

    • HVAC Retrofit

    • Appliances

  • Application Outlook (Revenue, USD Billion, 2017 - 2028)

    • Residential

    • Non-Residential

  • Regional Outlook (Revenue, USD Billion, 2017 - 2028)

    • North America

      • U.S.

      • Canada

      • Mexico

    • Europe

      • Germany

      • Russia

      • U.K.

      • Spain

      • Italy

      • France

    • Asia Pacific

      • China

      • Japan

      • South Korea

      • India

      • Australia

    • Central & South America

      • Brazil

      • Colombia

      • Paraguay

    • Middle East & Africa

      • Saudi Arabia

      • UAE

      • South Africa

      • Egypt

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