The market for energy retrofit systems was valued at USD 152.63 billion in 2022 and is anticipated to reach USD 206.6 billion by 2030, with a CAGR of 4.5% between 2022 and 2030. Growing public knowledge of the advantages of energy retrofits, such as cost savings and better building efficiency, encourages prospective market expansion.

The demand for energy retrofit systems has been increasing rapidly in recent years, as individuals and organizations become more conscious about reducing their carbon footprint and saving on energy costs. These retrofit systems are designed to upgrade existing buildings with energy-efficient technologies that reduce energy consumption and greenhouse gas emissions. In this blog, we will explore the energy retrofit systems market, its growth potential, and the factors driving its expansion. Growing penetration towards clean energy is proliferating the growth of the market.

Market Overview:

The global energy retrofit systems market size was estimated at UD 152.63 billion in 2022 and it is expected to hit over USD 206.6 billion by 2030 with a registered CAGR of 4.5% from 2022 to 2030. Europe energy retrofit systems market was valued at 62 billion in 2022. The market is driven by several factors, including government initiatives and policies promoting energy-efficient buildings, the rising cost of energy, and the need to reduce greenhouse gas emissions. Increasing adoption of HVAC system is one of the major factors boosting the growth of the industry. Increasing initiatives taken by the government of the economies in the housing sector is anticipated the propel the market demand. Moreover, surging availability of smart devices are also driving the market growth.

What is Energy Retrofit Systems?

Energy retrofit systems are designed to improve the energy efficiency of existing buildings by upgrading their heating, ventilation, and air conditioning (HVAC) systems, lighting systems, insulation, and other energy-consuming equipment. These retrofit systems use advanced technologies such as smart thermostats, energy-efficient lighting, and renewable energy sources to reduce energy consumption and greenhouse gas emissions. The Energy Retrofit systems assist in reducing the energy cost in commercial and residential spaces. Rising awareness regarding the benefits associated with energy retrofits such as cost saving and improved performance of building triggers the potential growth of the market.

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Growth Drivers:

Government Initiatives:

Governments across the world have launched several initiatives and policies to promote energy-efficient buildings and reduce greenhouse gas emissions. For instance, in the United States, the Department of Energy (DOE) has launched the Better Buildings Initiative to support energy retrofit projects in commercial and residential buildings. Similarly, in Europe, the Energy Performance of Buildings Directive (EPBD) sets out the minimum energy performance requirements for buildings. Moreover, since the U.S. Federal Government decided not to join the Paris Climate Accord, there has been debate about how non-renewable energy businesses would seize the chance. Also, because of the financial incentives provided by government organizations, it is anticipated that knowledge of the use of renewable energy will continue to rise rapidly. Modules for energy retrofit systems require constant technological advancement if they are to function better.

Rising Energy Costs:

Energy costs have been rising steadily over the past few years, making energy-efficient retrofit systems a cost-effective solution for reducing energy bills. Retrofit systems can help reduce energy consumption and costs by up to 30%, making them an attractive option for homeowners and businesses.

Environmental Concerns:

The increasing awareness of the impact of greenhouse gas emissions on the environment has led to a growing demand for energy-efficient retrofit systems. These systems help reduce carbon emissions by up to 40%, making them a crucial component of efforts to mitigate climate change.

Lack of infrastructure to restrain the market

The government of the Europe has established energy policy and investment policies in renovate the residential stack. The irrational behavior of the consumers backed by increasing gap between energy efficiency is also one of the major challenges in the market growth. Furthermore, continuous change in structure is also hampering the market growth.

Key Players:

Leading market companies compete based on new technology employed in product formulations and their capacity for product development. In order to create new and improved solutions that give them an advantage over their rivals, established businesses like Ameresco are investing in the creation of creative and sustainable solutions.

For instance, in June 2021, Ameresco announced a USD 19 million Energy Savings Performance Contract with the Pentagon Logistics Agency Energy and Cannon Air Force Base (ESPC). The Ameresco-designed renovation will result in noticeable facility enhancements and enable ongoing utility cost reductions. The project, which will make use of the DOE Energy Savings Performance Contract, will assist Cannon Air Force Base improve its mission capabilities and meet its sustainability and energy targets. The following are a few of the leading companies active in the global market for energy retrofit systems:

• Daikin Industries Ltd.


• Ameresco


• Eaton


• AECOM


• Johnson Controls


• Orion Energy Systems, Inc.


• Siemens


• Trane

Impact of COVID-19 on Energy Retro Systems

The global pandemic led to the downturn of almost every industry. The lockdown imposed by the government of the country declined the market demand. The COVID-19 virus epidemic in December 2019 prompted the World Health Organization (WHO) to issue a public health emergency declaration. Globally, the disease has killed a great number of people and spread to over 100 countries.

The worldwide manufacturing, tourist, finance, and export-import sectors have all suffered significant losses. The downward pressure on the world economy has once again increased, after initially showing hints of improvement. The viral outbreak has increased already risky aspects of the slow-growing global economy. The world economy is reportedly going through its most challenging period since the financial crisis, according to numerous international organizations.

Since the epidemic, import and export restrictions have significantly impacted the market for energy retrofit systems, as customer consumption and demand patterns have changed as a result of the pandemic.

Europe dominates the overall Market

On the basis of region, the global market is segmented into Middle East, Asia Pacific, Europe, Africa, North America and Latin America. In 2020, the Europe area led the worldwide market and generated more than 47% of all revenues. In terms of income, Russia dominated the regional market for Europe in 2020. Due to increased concerns about GHG emissions and rigorous restrictions to reduce carbon footprint, product adoption is increasing in the regional market, which is the main factor driving growth. Also, it is anticipated that the demand for efficient and sustainable energy will rise along with the population.

Also, Europe has been particularly active in leveraging R&D for the generation of clean and efficient energy, which helps market expansion. One of the key elements influencing the expansion of the regional market is the funding options for energy efficiency and conservation projects in the European Union. Asia Pacific, on the other hand, is anticipated to have the fastest CAGR during the projection period.

One of the first countries in the world to implement sustainable energy solutions for residential and non-residential buildings is Germany. Large-scale HVAC system installations in the non-residential sector have rendered conventional systems technologically obsolete and are anticipated to herald a significant shift towards modernization. This is a result of the growing significance of renewable energy options under the US government's energy law.

Additionally, on the basis of applicable acts, policies and regulations have been formed to address various facets of various industries. Those criteria have proven useful for gaining entry into the German market for energy retrofit systems.

HVAC retrofitting is more prevalent in commercial buildings in the UK where it can reduce energy usage by 35 to 40% in high-rise structures and by 30 to 35% in small offices. Tenants will be more comfortable as a result of the increased control it offers over humidity and temperature. Also, financing the retrofitting of HVAC equipment is significantly more economical than funding the replacement of an entire commercial HVAC system, which provides a greater 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.

Conclusion:

The energy retrofit systems market is expected to grow significantly over the next few years, driven by government initiatives, rising energy costs, and environmental concerns. Retrofit systems offer a cost-effective solution for reducing energy consumption and greenhouse gas emissions, making them an attractive option for homeowners and businesses alike. With the increasing demand for energy-efficient buildings, the energy retrofit systems market presents a lucrative opportunity for investors and businesses alike.
Segments Covered in the Report
By Type

• Quick Wins Retrofit


• Deep Retrofit

By Product

• Envelop


• LED Retrofit Lighting


• HVAC Retrofit


• Appliances

By Application

• Residential


• Non residential

By Geography

• North America
  
  • U.S.
  
  
  • Canada
  
  
• Europe
  
  • U.K.
  
  
  • Germany
  
  
  • France


• Asia-Pacific
  
  • China
  
  
  • India
  
  
  • Japan
  
  
  • South Korea
  
  
  • Malaysia
  
  
  • Philippines


• Latin America
  
  • Brazil
  
  
  • Rest of Latin America


• Middle East & Africa (MEA)
  
  • GCC
  
  
  • North Africa
  
  
  • South Africa
  
  
  • Rest of the Middle East & Africa

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