The Connected and Smart Home product market grew by almost 19% in the period 2010-2012 to reach just over €510 million and is estimated to grow by 8% in average each year until 2015.
Smart home market applications. Source: BSRIA Smart Home Study 2013 (click image to zoom)The current Connected & Smart home market still remains a niche high-end market, with penetration in light commercial applications growing since 2010. Residential consumer awareness has been increasing across Europe, not least due to the widening popularity of smart phones/tablets and their role as possible user interfaces (via apps) in smart home solutions. Nevertheless, in these austere times in Europe the high cost of the smart home solution prevents these solutions from reaching the mass market.
Lighting controls are the main application. Environmental controls became the second largest application in Europe, as customers have been increasingly worried about their energy bills and to prevent wasting energy. Assisted living home is an important market in the Netherlands with the financial support from the Government.
The smart home market is still highly concentrated in the high-end housing segment. The share in zero/low energy home is still very small as environmental controls are not a market driver in this sector.
Compared to the development in North America, the Home Energy Management System (HEMS) market in Europe has a much larger market size, thanks to all the pilot projects.
HEMS in Germany are still mainly an enthusiast’s market mainly choosing DIY products, which do not accrue any installation cost. Reasons for the slow uptake in Europe’s biggest potential market, Germany, are the privacy concerns. There are many activities in the UK, which address directly to the consumers, although the postponement of smart meter installation does not boost confidence in the programme.
In France, until the end of 2012, no incentives or drivers have helped the market to take off. In the next two years however, this market is expected to grow, as the current thermal regulation RT2012 imposes the monitoring of energy use in dwellings. The optimistic scenario assumes that all new dwellings constructed following the rules of the RT2012 will be equipped with some sort of HEMS in order to comply with the regulation.
The market also needs to wait for a few more years until the roll out of smart metering is on track. There are several new HEMS products developed by small-scale start-up companies. Their main strategy is to partner with energy suppliers to supply HEMS products.
Intelligent Residential Environmental Controls include intelligent thermostats, automatic radiator valves, sensors, and electric heating control systems (the latter are also known as energy managers). The market for gas heating controls is heavily dominated by DIY products and this is a large segment in Germany. A large amount of products are sold to consumers via retail and online channel directly. Also, there is a considerable potential for such products in some Eastern European markets (e.g..Poland), where individual gas heating has been an alternative to district heating for a few decades.
Electric heating control systems are mainly used in countries with high penetration of electric heating systems (e.g. France, Norway), although they are expected to face hard times as a result of tightening energy efficiency legislation for new build in the largest market, France.