The global energy retrofit systems market size was estimated at USD 149.47 billion in 2022 and is expected to grow at a CAGR of 6.3% from 2023 to 2030. The growth is expected to be driven by factors such as growing concerns about greenhouse gas (GHG) emissions and stringent laws to reduce carbon footprint. The increasing deployment of HVAC appliances across numerous industries is expected to drive product demand even further. Most HVAC and lighting technologies have a shelf life of 25 years, after which they are considered obsolete and must be replaced. Retrofitting these systems results in significant savings in energy expenses for households and offices.
The market in the U.S. is expected to witness significant growth over the forecast period due to large-scale construction and the adoption of retrofit systems to replace the existing ones, which have proven to be expensive and energy-consuming. 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.
Moreover, The DOE announced the Commercial Buildings Integration initiative and funds from the Solution to Improve the Energy Efficiency of Small and Medium Buildings. The finished project produced yearly energy savings of 103 166 MMBtu, reduced GHG emissions of 190 298 during the life of the renovations, and annual utility savings of USD 4008 per building.
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.
The envelope product segment led the market and accounted for 51.54% of the global volume share in 2022. Building envelope retrofitting provides insulation and an air barrier to walls, increasing thermal comfort and reducing drafts. As a result, heat loss is reduced, resulting in lower energy consumption and a lower carbon footprint for tenants and owners. This will also influence public perception positively by demonstrating a commitment to environmental sustainability.
Furthermore, HVAC systems account for a significant portion of building energy usage, boosting their efficiency is one of the most efficient strategies to minimize energy expenses. This category incorporates the systems and technologies used to heat, cool, and ventilate buildings, such as chillers, boilers, and air-handling equipment. The increased need for energy-efficient HVAC systems mainly in the commercial and industrial sectors is projected to fuel the expansion of this market segment.
The application segment consists of residential and non-residential. The non-residential segment led the market and accounted for 70.73% of the global volume share in 2022. The expansion can be attributed to large-scale HVAC system installation and the technological obsolescence of traditional systems utilized in non-residential buildings.
The factories require massive amounts of energy to run their operations and machines. As a result, implementing energy retrofit systems in such locations lowers energy expenditures and greenhouse gas emissions. Due to their dependency on HVAC and lighting systems, areas that undergo extreme winter conditions will benefit the market over the forecast period.
The residential segment is anticipated to grow at a significant CAGR during the forecast period. Increasingly expensive residential properties, in addition to the creation of legislation to protect historic properties, have led to improvements in existing structures, with many consumers selecting retrofits. Furthermore, rising energy-related costs and the tight application of various emission standards have driven some industrial and commercial companies to embrace innovative energy-efficient modernization systems.
Europe dominated the global market in 2022 and accounted for the largest volume share of over 47.57%. Russia led the Europe regional market in 2022, in terms of revenue. The regional market is being driven primarily by expanding product adoption as a result of growing concerns about GHG emissions and stringent requirements to reduce carbon footprint. Furthermore, the growing population along 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 first countries to implement clean energy solutions for residential and non-residential buildings. HVAC systems are widely implemented in the non-residential sector, and traditional systems have become technologically outmoded, necessitating a significant transfer to modernization. This is due to the increased relevance of clean energy solutions under the EU government's energy law.
Moreover, based on statutes, related policies, and regulations have been formed to address various issues of various industries. Such characteristics have proven to be advantageous for getting into the German energy retrofit systems business model.
HVAC retrofitting is more popular in commercial buildings in the U.K., where it can reduce energy usage by 35 to 40% in high-rise buildings and 30 to 35% in small offices. It offers tenants more control over temperature and humidity, resulting in better comfort. Furthermore, retrofitting HVAC equipment is much less expensive than financing a whole commercial HVAC system replacement, which provides a greater ROI.
During the forecast period, the Asia Pacific will register the fastest growth rates. China, Japan, and India dominate the market in this region. Reduced costs for renewable energy and infrastructure, as well as quick manufacturing of energy modernization systems in the region and adoption of these systems by residential and commercial end users, are likely to drive market expansion in the Asia-Pacific region. Government rules and incentives, such as building energy requirements and tax credits, are also pushing the regional market for energy retrofits.
The global energy retrofit systems market is a highly competitive market owing to the presence of major industries across the region as these companies are fairly concentrated and highly competitive.Some prominent players in the global energy retrofit systems market include:
DAIKIN INDUSTRIES, Ltd.
Orion Energy Systems, Inc.
Market size volume in 2023
USD 154.30 billion
Volume forecast in 2030
USD 237.16 billion
CAGR of 6.3% from 2023 to 2030
Base year for estimation
2018 - 2021
2023 - 2030
Volume in MCM and CAGR from 2023 to 2030
Volume forecast, company ranking, competitive landscape, growth factors, and trends
Product, application, region
North America; Europe; Asia Pacific; Central & South America, Middle East & Africa
U.S.; Canada; Mexico; Germany; Russia; U.K.; 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
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This report forecasts revenue and volume growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. Forthis study, Grand View Research has segmented the global energy retrofit systems market report based on product, application, and region:
Product Outlook (Revenue, USD Billion, 2018 - 2030)
LED Retrofit Lighting
Application Outlook (Revenue, USD Billion, 2018 - 2030)
Regional Outlook (Revenue, USD Billion, 2018 - 2030)
Central & South America
Middle East and Africa
b. The global energy retrofit systems market size was estimated at USD 149.47 billion in 2022 and is expected to reach USD 154.30 billion in 2023.
b. The global energy retrofit systems market is expected to grow at a compounded annual growth rate of 6.3% from 2023 to 2030 to reach USD 237.16 billion by 2030.
b. Europe dominated the energy retrofit systems market with the highest share of 47.57% in 2022. Favorable government regulations towards the installation of energy retrofit along with increasing prices of conventional energy are expected to propel the market growth.
b. Key factors driving the energy retrofit systems market growth include rising energy consumption is expected to increase product demand over the forecast period.
b. Some key players operating in the energy retrofit systems market include Daikin Industries, Orion Energy Systems, Inc., Eaton, Schneider Electric, Ameresco, and Johnson Control, among others.
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