Smart building systems market set to continue growth

The worldwide market for smart building systems is expected to continue growing rapidly in the coming years, according to two recent studies published by IDC Energy Insights.

The first report, entitled Smart Buildings Global Market Forecast 2010-2015, predicts spending on smart building infrastructure will increase at a compound annual growth rate of approximately 26.6 percent from 2010 to 2015.

According to the study, smart building sales will reach a total value of approximately $10.2 billion by 2015. The anticipated growth is expected to center around two markets - North America and Western Europe. The study forecast a CAGR in North America of approximately 28.4 percent, while Western European smart building spending is expected to see a CAGR of approximately 28.8 percent.

Casey Talon, research analyst for IDC Energy Insights, said a key factor motivating the adoption of smart building infrastructure is reduction of expenses. "Energy consumption in the building sector is usually one of the leading line items in operational budgets and thus a tempting target for smart building controls," he said. "Heating, ventilation and air conditioning plus lighting comprise more than 70 percent of a building's energy consumption."

The report considered a number of expenses, including system infrastructure and services for the control and optimization of building operations.

A second report published by IDC Energy Insights offers insight into opportunities and challenges for the stakeholders in smart building - technology vendors, building owners and utilities providers.

The report, entitled Business Strategy: Smart Building Systems Challenges and Opportunities, suggested that smart building systems have "tremendous disruptive potential for the energy and information and communications technology industries."

Talon claimed that the smart grid "is, in the end, a platform." According to Talon, "the smart building might turn out to be the first true 'killer app' of the new smart grid infrastructure. Advances in energy efficiency and electricity demand management through smart building systems will transform the interaction between commercial buildings and the electricity grid."

According to IDC Energy Insights, growth rates for the smart grid are likely to be highest in areas where electricity markets have "decoupled" revenue from the quantity of energy sold. This, according to the study, makes energy efficiency projects more profitable.

Areas in which this has already begun to take place include New York, California and Ontario.