Home Energy Management Systems : A Research Study on the European and Nordic Market

Abstract: Global energy consumption has more than doubled since the year of 1990, leading to energy efficiency and management becoming increasingly important topics on the sustainable development agenda. Home Energy Management Systems (HEMS) is a solution combining hardware and software for managing, measuring and analyzing residential energy consumption and in effect addressing the issue of increased energy expenditure. This report aimed to assess the current market for HEMS in Europe and in the Nordics, and how these markets might develop in the future, to enable KTH Live-in Lab to be in the forefront of smart building development by providing them with potential strategic business partners. With a literature review of earlier research on HEMS as a basis, a market study was conducted in combination with qualitative interviews with key market operators. Active companies, regulatory institutions and ongoing industry initiatives were identified, showing a large number of different available HEMS solutions provided by companies of varying sizes, and a number of market operators and ongoing initiatives affecting the current and future market. Porter’s Five Forces Model was applied, exhibiting an intense threat of new entrants to the market and currently high market profitability. A number of drivers of market development were identified, such as the roll out of smart electricity meters and environmental consciousness, as well as barriers to market development, such as lack of financial incentives and data privacy issues. Moreover, the market for HEMS was predicted to grow, especially in the Nordics, due to the region being in the leading edge of sustainable development, electric vehicle deployment and local electricity production. Lastly, KTH Live-in Lab is proposed to collaborate with market operators across the value chain and from all parts of the ecosystem, to fully leverage the potential benefits and energy optimizing possibilities of HEMS.