HVAC Breaking News / Commercial Controls / Building Automation Systems

Nov. 18, 2013: US Building Automation Market Is Primed for Growth

Can Help Commercial Buildings Cope with Rising Energy Costs

LONDON — The United States market for building automation equipment is set to grow by more than 40 percent within the five-year period ending in 2017, spurred by the need in commercial buildings for more efficient energy consumption, according to a new report from IHS Inc.

With electricity rates on the rise, driven by increasing wholesale prices and investments in renewable sources of energy, demand for lower energy consumption in buildings is bound to occur, the findings in the report entitled “Building Automation Equipment” suggest.

The U.S. building automation systems market is projected to reach $1.65 billion by year-end, up 5 percent from $1.57 billion in 2012. Solid growth ranging from 7 to 9 percent is expected to follow in the next four years, with industry revenue forecast to hit $2.24 billion by 2017, equivalent to a 43 percent increase from 2012.

The spiraling cost of electricity is a major factor in the operational efficiency of a commercial building, which explains why building automation systems could play an important role. Prices for U.S. retail electric power are forecast to increase by 8 percent from 2012 to 2020, says IHS, with a sizable proportion of the increase in price related to the investments being made by the market in renewable energy.

A similar story is unfolding in Germany, where the Energiewende policy is promoting the move away from nuclear and fossil fuel power generation and toward renewable sources of energy. Such investments are driving up the cost of energy overall and adding pressure to the already stretched operational budgets of many commercial and government organizations.

“With budgets cut and many large companies struggling to grow at more than 5 percent on an annual basis, the higher cost of electricity could prove to be a major headache for commercial and government building owners,” said Sam Grinter, market analyst for the Building Technologies group at IHS.

In particular, buildings consume large quantities of energy through HVAC, Grinter noted. “Making buildings as efficient as possible is crucial to driving down energy consumption. And one way to increase energy efficiency is to install an integrated building automation system,” he said.

Building automation systems centrally manage the HVAC systems of a structure. Compared to more basic control mechanisms, building automation systems can save a considerable amount of energy. Some vendors claim that energy savings of more than 30 percent can be achieved.

This is why building owners will increasingly look to building automation systems to achieve savings on energy consumption, especially as the cost of electricity keeps going up, IHS believes.

Publication date: 11/18/2013

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