Energy Management Software Market Trends

Growth Drivers

• Rising and volatile energy costs: The global energy price volatility and long-lasting inflationary trends are significantly pushing operational expenditure reduction to the topmost corporate agenda. This has created an urgent and direct return on investment (ROI) for energy efficiency investments, which in turn is positively impacting the energy management software market internationally. According to an article published by the EIA Government in June 2023, the yearly average retail electricity price in the U.S. was 12.49¢ per kilowatt-hour as of 2022. Additionally, the electricity prices for utility customers amounted to 15.12¢ per kWh for residential, followed by 12.55¢ per kWh for commercial, 11.66¢ per kWh for transportation, and 8.45¢ per kWh for industrial. Therefore, the variation in electricity prices is constituting a huge growth opportunity for the market across different nations.
• Advancements in connectivity and IoT: The proliferation of robust connectivity and low-cost IoT sensors is significantly offering real-time and granular data, which is essential for applications in the innovative energy management software market. This has readily resulted in making sophisticated energy management suitable for a comprehensive range of organizations. For instance, as per an article published by NLM in April 2023, the 5G connectivity usually ranges from 24 GHz to 100 GHz, and the Sub 6 GHz band comprises frequencies lower than 6 GHz. Besides, in the case of 5G energy consumption, when the traffic load is lower, a base station can tend to save almost 98.7% of power, which denotes a suitable way of combating increased electricity consumption, thereby bolstering the market’s exposure.
• Standard financial grants and incentives: The aspects of utility rebate programs, tax credits, and government grants for clean technology and energy efficiency are effectively reducing the overall expense of ownership for the energy management software market. This has caused an increase in adopting the market across small and medium-sized enterprises (SMEs). As stated in a data report published by the IEA Organization in June 2023, USD 1.3 trillion has been generously allocated by governments to support clean energy projects internationally. Since then, there has been an increase in investment by 25%, which has outpaced the fossil fuels growth. Meanwhile, nearly USD 130 billion of the latest government expenditure significantly supports clean energy investments for new allocations, thereby continuously boosting the overall energy management software market.

Challenges

• Data privacy and cybersecurity concerns: The aspect of connecting energy assets to the cloud and corporate network has significantly expanded organizations’ attack surface, which negatively impacts the energy management software market’s growth. Besides, energy systems are readily considered severe infrastructure, and a breach occurrence can result in physical damage, financial loss, and operational disruption. Therefore, an energy management software demands accessibility to sensitive operational technology networks that have conventionally been air-gapped. Meanwhile, risks around the granular operational data exposure can reveal production secrets and business approaches, which also lead to resistance to cloud-based deployments, thereby causing a hindrance in the market’s development.
• Interoperability issue and market fragmentation: The energy management software market is extremely fragmented, with organizations ranging from building controls specialists to industrial automation giants, along with utility spin-offs and pure-play software start-ups. Therefore, this absence of standardization has led to significant interoperability risks, which have reduced the market’s expansion and growth. Besides, while vendors readily promote their proprietary ecosystems, consumers are frequently left with the limitation of undertaking solutions from various vendors. The lack of open data and universal standards caters to the fact that, after a successful implementation, the adoption or expansion of new technologies to additional infrastructures is considered a recurring challenge, thus negatively impacting the market’s development.