SAN FRANCISCO — From a market size of $13.07 billion in 2013, the global smart homes market is forecast to grow at compound annual growth rate (CAGR) of 20.3 percent to reach $47.61 billion by 2020, according to a new study by Grand View Research. Emphasis on energy conservation and reduced carbon emissions are expected to be the key driving forces for the market over the forecast period. Favorable regulatory initiatives for implementing smart homes owing to their energy efficiency characteristics are also expected to positively impact the global market over the next six years.

Smart home applications encompass HVAC, energy management, security, lighting, entertainment, and others. The introduction of smart grids, increased personal income in developing economies, assistance of power line communication, and growth of the consumer electronics industry are factors expected to favorably impact market growth. The need for standardization, skilled labor, and high initial cost due to the incorporation of advanced technologies such as IP and Bluetooth may pose a challenge to industry growth.