Electrical Services Market Trends

Growth Drivers

• Expanding renewable energy projects: The global push for renewable energy sources such as solar and wind has opened new avenues for electrical services. Developments and infrastructure building by companies in greener alternatives also drive demand for specialized electrical services. In March 2024, Local Power Ltd. partnered with Kingston Refrigeration & Electrical Services Ltd. in Cork to focus on the installation of solar PV for local farmers and businesses. This contract caters to growing green energy demand and underlines the increasing involvement of electrical services in renewable projects for commercial and community needs.

• Increased electrification in rural and underserved areas: Most governments around the world are working to electrify rural and underserved areas. This has increased the demand for electrical installation and maintenance services. Southern Home Services acquired Elite Electric in February 2024 to expand its services more widely within Florida. With the acquisition, the company aims to offer key services to people in less fortunate communities, with the sole objective of ensuring that energy is easily accessed and that response times are quick. In fact, such projects suggest that electrification in diverse areas is becoming a key growth driver for the electrical services market.
• Advances in smart grid technology: Smart grid technology is transforming energy management. Hence, there is a significant demand for advanced electrical services to install, maintain, and upgrade these systems. Smart grids make energy use more efficient and offer real-time monitoring, benefiting both consumers and providers significantly. In July 2024, Quanta Services acquired Cupertino Electric Inc. for USD 1.54 billion as part of its strategy to improve infrastructure solutions, particularly in smart grid technology. Now, with the inclusion of advanced capabilities from Cupertino Electric, Quanta is establishing itself as the front-runner in modern electrical services and in finding solutions for the complex needs of the smart energy landscape.

Challenges

• Shortage of skilled professionals: The need for more skilled electrical service professionals is hampering the capacity of the industry to meet growing demand with increasing complexity. The government has recently reported a further qualified labor shortfall, with fewer young professionals entering the trade and therefore seriously compromising the pipeline of the workforce. This will not only lead to compromised scaling of services but will also burden the existing professionals in the industry who wish to undertake projects of high complexity.

• Regulatory compliance and environmental standards: Companies in the electrical services industry must maintain compliance with strict environmental and safety standards. The shift towards sustainable energy propulsion needs to be in tune with evolving regulations, which often influence the operation and cost structure of service providers. Furthermore, frequent updates to these regulations place organizations under pressure for continuous adaptations to avoid any penalties from authoritative regulatory bodies, hence increasing the sector's compliance burden.