Home Energy Management System Market Size - By Component, By Product, Analysis, Share, & Forecast, 2025 - 2034

Home Energy Management System Market Size

The global home energy management system market was valued at USD 5.8 billion in 2024 and is estimated to reach the value of USD 21.7 billion by 2034, growing at a CAGR of 13.8% from 2025 to 2034. The expansion is primarily attributed to the adoption of smart home technologies as well as concern over environmental sustainability. The evolving global market is being driven by a myriad of factors such as the global transition towards lower carbon emissions, improvements in technologies with energy efficiency, alongside a growing incorporation of renewable energy into homes.
 

The growing fossil fuel emissions concern is becoming an increasingly bigger problem throughout the world. Additionally, past reports showed how in 2024 the global CO2 emissions saw an unprecedented increase of 37.4 billion tonnes which is a 0.8% rise from 2023. This increase in emissions is primarily the result of the world’s dependency on fossil fuels, inefficient energy expenditures, and the sluggish shift toward renewable power sources. These statistics are striking and convey the growing fears quite vividly around the world, focusing on the long-term impacts of climate change and the need for swift action by governments and organizations.
 

Electrical consumption across the world is growing tremendously due to rising population and thereby urbanization. In 2024, U.S. electrical consumption was projected to reach record highs, with power demand expected to rise to 4,086 billion kilowatt-hours (kWh). This consumption will significantly lead to the utilization of efficient management systems that will reduce consumption. Homeowners are looking for ways to lower energy consumption and reduce utility bills, which has created a growing market for systems that offer real-time insights into energy usage.
 

The development of the home energy management system market has also been supported by IoT and AI technologies. With these technologies, HEMS can automate energy-saving actions, such as changing the heating or cooling of space according to how frequently it is used or minimizing the consumption of energy during peak hours. Furthermore, AI-enabled systems can offer bespoke suggestions to users to minimize energy wastage, thus improving the efficiency of the system even further.
 

The expansion of the home energy management system market has been catalyzed by government programs and policies. To promote technology adoption for energy-saving at home, several countries have implemented incentives and rebates. Furthermore, heightened regulations on energy usage combined with bold climate targets are persuasive enough for consumers to purchase technologies that manage energy in smart homes.
 

The U.S. tariffs on imported goods, which also encompass parts utilized in Home Energy Management Systems (HEMS), is likely to have profound impact on the market. These are expected to be multifaceted in nature, having an impact on pricing, supply chains, and technological advancement within the sector. The imposition of such tariffs on imported components, specifically those pertaining to electronic devices, smart home equipment, and renewable energy equipment, will most likely increase the operational costs for businesses producing HEMS. Sourcing products from China and other countries with lower production costs, highly sensitive products like HEMS sensors and smart thermostat control systems are considered crucial components of HEMS.
 

Home Energy Management System Market Trends

• Real-time energy monitoring, predictive analytics, and automated control features are made possible by AI and IoT technologies, transforming HEMS systems. These appliances adjust to user behaviour patterns which increases energy efficiency and convenience. An example is EcoFlow’s Oasis which was presented at CES 2025. It leverages AI to optimize energy production, storage, and usage while proactively suggesting energy-saving measures and integrating with smart devices.
   
• HEMS are being integrated with the overarching smart home shadow framework. Applications such as Homey have extended their energy management functions, enabling the tracking and monitoring of energy usage for smart plugs, appliances, thermostats, and EV chargers. The integration of the Homey Energy Dongle permits direct interfacing with smart meters, providing real-time consumption data, which is in line with home automation and energy efficiency trends.
   
• With reduced net metering rates, there's an increased demand for battery storage systems. In Japan, for example, government initiatives are promoting the development of VPPs, which link home batteries to a cloud platform, enabling surplus energy sales. In survey it was noted that Japan produced around 4 billion batteries per year in the past several years, about 35 batteries per person living in the country. This shift is expected to boost battery sales and enhance grid stability.
   
• The increasing worry of climate change is greatly affected by the carbon emissions we create. Although in 2024 China added record amounts of clean energy, their CO2 emissions still rose by 0.8% yearly. We are noticing an increase in consumers who care about sustainability because of the fragments that their solutions help reduce their carbon footprint and the cost of energy. HEMS integrates solar panels and facilitates energy saving behaviour, helping to achieve greater environmental objectives.
   
• Policies that promote renewable energy and energy efficiency are accelerating HEMS adoption. Government programs and incentives in regions such as North America and Europe are motivating homeowners to invest in energy management systems, which is propelling further market growth.
   

Home Energy Management System Market Analysis

• Home energy management systems industry was valued at USD 4.2 billion in 2022, USD 4.9 billion in 2023, and was set to reach USD 5.8 billion in 2024. As the price of energy utilities escalates and the need to sustain the environment increases, customers tend to search for alternatives that help reduce their energy expenditure. HEMS allows homeowners to control further devices within the home and therefore reduce the operational cost of the home as well as the carbon footprint. An increase in concern about efficiency in the use of energy is one of the primary factors propelling the uptake of HEMS.
   
• The continued growth of smart homes and IoT-based devices has significantly contributed to the expansion of the HEMS market. Homeowners are integrating smart appliances, thermostats, lighting systems, and even electric vehicle (EV) chargers into their homes. In 2024, global EV sales surged, reaching 17.1 million units, a 25% increase year-over-year. Therefore, the rising preference for EV across the world is creating a massive demand for the HEMS systems across the world.
   
• Based on components, the software segment is anticipated to cross USD 6 billion by 2034. It is mainly due to the growing integration of advanced technologies like Artificial Intelligence (AI), Machine Learning (ML), and the Internet of Things (IoT) into HEMS is significantly driving the demand for software systems. These technologies enable smarter energy management, predictive analytics, and automation, making the software systems segment a critical component of HEMS.
   
• Similarly, networking device segment is also anticipated to exceed USD 4.3 billion by 2034 owing to the rapid expansion of the Internet of Things (IoT) in the residential sector is a major factor driving the demand for networking devices. As more homes adopt smart devices, such as smart thermostats, lighting systems, security cameras, appliances, and electric vehicle (EV) chargers, the need for robust networking devices to interconnect these devices becomes essential.
   
• With the rapid growth of smart homes, there is an increasing need for software that can integrate and control a wide range of devices, from smart thermostats to appliances and energy storage systems. Software platforms that enable users to monitor and control their home energy systems through mobile apps or centralized dashboards are becoming increasingly popular. This demand for integration is pushing the market for software systems, as consumers seek more convenience, customization, and control over their energy use.
   

• By 2034, the programmable communicating thermostats segment will be growing with a CAGR of over 12.7% due to multiple factors. Consumers, on the other hand, are seeking ways to save on energy expenditure without losing comfort. Cost controlling features embedded in programmable communicating thermostats that allows users to preset and schedule temperature, remote adjusting, and the modification of energy consumption enhances the capability of these devices, proving to be attractive in waste reduction. Enhanced energy efficiency helps cost reduction on utility bill, making it an ideal option to energy conscientious consumers.
   
• As more homes adopt renewable energy sources like solar panels and wind turbines, along with battery storage systems, the need for software to manage energy production, storage, and consumption becomes essential. In 2024, renewable energy sources provided a significant portion of U.S. electricity generation, with renewables like wind, solar, hydro, and biomass accounting for over 25% of the total. Therefore, the demand for HEMS will grow further in coming years.
   
• Similarly, lighting controls segment holds the overall market share of 27.9% in 2024 since the lighting accounts for a significant portion of household and commercial energy consumption. With the growing concern of consumers and enterprises towards energy consumption, the need for energy efficient lighting systems like smart lighting controls is on the rise. These systems enable users to manage the consumption of energy by allowing changes in the light intensity, use of time scheduling, and automatic disembodiment of light in the absence of people thus minimizing energy waste as well as saving on costs.
   
• The rising demand for smart lighting controls is largely spurred by the fast evolution of the smart home market. Smart lighting is an integral part of automation systems and can be operated remotely via mobile applications or voice commands through Amazon Alexa, Google Assistant, or Apple HomeKit. Features like self-timed usage and scheduling dependent on presence or time of day make the use of these systems even more desirable, thereby increasing their market share.
   
• Technological advancements continue to enhance the functionality and user experience of programmable communicating thermostats. Features such as geofencing, voice control, and integration with home automation platforms are becoming more common. These innovations provide users with greater control, flexibility, and convenience, making programmable thermostats a more attractive investment. Google has invested in companies and initiatives related to home energy management systems (HEMS) and broader energy management, including a USD 100 million investment in Renew Home.
   

• The U.S. home energy management system market was reached USD 0.8 billion in 2022, USD 1 billion in 2023, and USD 1.1 billion in 2024. The proliferation of smart home technologies in the U.S. has created a strong foundation for the HEMS market. Devices such as smart thermostats, lighting controls, and smart plugs are now commonly integrated with centralized energy management platforms. As more U.S. households adopt smart technologies, the demand for cohesive energy control solutions like HEMS continues to grow.
   
• Federal and state-level programs supporting clean energy and energy efficiency are playing a crucial role in accelerating the HEMS market. Rebates, tax incentives, and utility-sponsored demand response programs are encouraging homeowners to adopt smart energy management systems. These incentives lower upfront costs and make HEMS more accessible to the broader population.
   
• Europe is home to some of the most robust energy efficiency and climate regulations in the world. The European Union’s Green Deal, Energy Performance of Buildings Directive (EPBD), and Fit for 55 packages aim to drastically reduce carbon emissions and improve energy efficiency across residential and commercial sectors. These regulations actively encourage the adoption of HEMS by setting energy performance targets and promoting smart technologies in homes.
   
• Moreover, Asia Pacific is home to over 60% of the world’s population and includes some of the fastest-growing economies like China, India, Japan, and South Korea. With ongoing urbanization and industrialization, energy consumption is rising steeply. HEMS offer a practical solution to monitor and manage household energy usage effectively, reducing the strain on national grids.
   
• Countries across the Middle East, such as Saudi Arabia, the UAE, and Qatar, experience extreme temperatures, leading to high residential electricity consumption, primarily for air conditioning. HEMS technologies, particularly smart thermostats and energy monitoring tools are gaining traction as they help optimize HVAC usage and reduce electricity bills. Saudi Arabia’s Vision 2030 and the NEOM smart city project, will also emphasize energy-efficient and tech-enabled infrastructure.
   

Home Energy Management System Market Share

Top 4 companies, including Siemens, Schneider Electric, ABB, and Eaton hold more than 30% market around the world. These companies boast extensive global manufacturing facilities and R&D centers. With regional production hubs strategically located in key markets such as Asia, Europe, and North America, they ensure cost-efficient manufacturing and prompt delivery. Backed by decades of experience, they are renowned for their commitment to quality, innovation, and reliability.
 

Home Energy Management System Market Companies

Major players operating in the home energy management system industry are:

• ABB
• Eaton
• Emerson Electric
• ENGIE Impact
• General Electric
• GridPoint
• Honeywell
• Johnson Controls
• Kenmore
• Optimum Energy
• Schneider Electric
• Siemens
• Telkonet
• Toshiba
   

In October 2024, Schneider Electric, a global leader in digital home energy management and next-generation automation, has entered into a strategic partnership with Noida International Airport to deliver advanced building and energy management solutions. As part of this collaboration, Schneider Electric will implement integrated building management systems, including Electrical SCADA and an Advanced Distribution Management System (ADMS). The initiative is designed to boost the airport's operational efficiency and sustainability, aligning with its vision for state-of-the-art, energy-efficient infrastructure.
 

In September 2024, Schneider Electric, the leader in the digital transformation of energy management and automation, today announced its artificial intelligence-powered feature is now live on the Wiser Home app. Recently recognized as the world’s most sustainable company, Schneider Electric continues to lead in smart home energy management with cutting-edge solutions to support homeowners, homebuilders, and electrical installers.
 

Home Energy Management System Industry News

• In February 2025, Kenmore, a trusted name in home innovation, is proud to announce the upcoming launch of its advanced Home Energy Management System, a suite of smart technologies designed to help consumers better understand and control their energy usage. This new system includes smart plugs, leak sensors, and a smart home manager app, providing seamless integration for energy-efficient living.
   
• In January 2025, At CES 2025, EcoFlow launched its Oasis energy management platform, which uses AI to optimize home energy consumption, storage, and solar power use. U.S. manufacturer Ecoflow has entered the home energy management market with the launch of Oasis. Oasis is an AI-powered system designed to optimize energy consumption and storage in the residential market.
   
• In June 2024, advancing its commitment to bringing smart, sustainable technologies to homes in the U.S. and Canada, ABB launched the new ReliaHome Smart Panel, its first residential energy management software platform in these markets. In collaboration with its partner Lumin, a pioneer in responsive load management, the new cutting-edge offer provides enhanced customer experience and exceptional convenience to save energy through an accessible, user-friendly product. Designed and assembled in the U.S., the panel is commercially available in all 50 states and territories and Canada.
   

This home energy management system market research report includes in-depth coverage of the industry with estimates & forecast in terms of “USD Million” from 2021 to 2034, for the following segments:

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Market, By Component

• Metering & field equipment
• Hardware
• Software
• Networking device
• Control systems
• Sensors
• Others

Market, By Product

• Lighting controls
• Self-monitoring systems & services
• Programmable communicating thermostats
• Advanced central controllers
• Intelligent HVAC controllers

The above information has been provided for the following regions and countries:

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • UK
  • France
  • Germany
  • Italy
  • Russia
  • Spain
• Asia Pacific
  • China
  • Australia
  • India
  • Japan
  • South Korea
• Middle East & Africa
  • Saudi Arabia
  • UAE
  • Turkey
  • South Africa
  • Egypt
• Latin America
  • Brazil
  • Argentina