European Smart Thermostat Market to Jump to $2.5 Billion in Five Years, Says Frost & Sullivan
The market currently stands at $150 million
LONDON — The European smart thermostat market is set to boom, driven by the 2020 targets on climate change and mandatory energy efficiency certification for buildings, according to a new analysis from Frost & Sullivan. The enforcement of minimum standards for high energy consuming products such as boilers as well as HVAC systems is also fueling opportunities for smart thermostats. The United Kingdom, Germany, and the Netherlands will account for a lion’s share of the market in Europe, while France will be the fastest growing.
Frost & Sullivan finds that the European smart thermostat market earned revenues of $152.5 million in 2014 and forecasts that this will jump to $2.57 billion by 2019.
“Rapidly increasing awareness among customers on the user-friendliness and comfort of smart thermostats is spurring demand in Europe,” said Dhivya Sundara Manohar, Frost & Sullivan Energy and Environmental research analyst. “Moreover, the market is at an advantage since it is not significantly limited by government regulations.”
Although smart thermostats offer energy cost savings in the long run, high initial prices curb adoption in the medium-end and low-end customer segments. The variation in HVAC systems across European countries is another challenge. Smart thermostat manufacturers are forced to customize products based on individual country specifications, complicating matters for the retrofit market.
As competition intensifies, suppliers must deploy effective pricing strategies to stave off rivals. Consistent innovation will further help manufacturers make headway across countries and customer strata.
“In this technology-oriented market, frequent upgrades to sensors, connectivity, and interface are essential,” said Manohar. “Manufacturers must also react quickly to the need for bulk volumes by expanding production capacity.”
Most importantly, vendors need to realize that energy utility companies are critical value chain partners, notes the report. Capitalizing on their highly convenient and reliable sales channel will facilitate access to the mass customer market in Europe.
More information on the report is available here.
Publication date: 7/30/2015