Building Automation System Market Size & Share | Industry Report, 2022-2027

The building automation system market is projected to reach USD 148.6 billion by 2027 from USD 86.8 billion in 2022; it is expected to grow at a CAGR of 11.4% from 2022 to 2027.

Building automation is an easy way of controlling and monitoring systems installed in buildings. These systems include facility management systems, security and access controls, and fire and life safety alarms. Building automation helps reduce energy consumption in buildings, enhances the comfort level of occupants, and manages building operations effectively. The growth of the building automation system market is fueled by the increasing requirement for energy-efficient facilities with enhanced security systems. Besides this, advancements in wireless communication technologies have reduced the complexity and the cost of installing building automation systems in the existing buildings.

The combination of IoT and building automation has also enabled the exchange of information among several electronic devices and the cloud without the need for direct human intervention that makes buildings smart. This factor has also accelerated the growth of the building automation system market. However, the key restraints faced by the companies operating in this market include the false notion about the high installation costs of building automation systems and technical difficulties in their deployment. The increasing global concerns for energy conservation and the rising energy costs are fueling the demand for building automation systems for making buildings energy efficient. This is one of the key factors driving the growth of the building automation system market. The surging demand for building automation systems for use in commercial applications can be attributed to the ability of these systems to reduce the operating costs of buildings. The easy maintenance of temperature and lighting levels, along with enhanced security levels offered by building automation systems, fuel market growth.

Driver: Heightened focus on developing energy-efficient and eco-friendly buildings

The building sector is one of the largest energy-consuming sectors and usually accounts for more than one-third of the total energy consumption worldwide. It is an equally important source of carbon dioxide (CO2) emissions. According to the International Energy Agency (IEA), energy use in buildings represents as much as 80% of the total energy use across specific regions that are highly dependent on traditional biomass. The number of electrical systems used in buildings is rising, which increases energy consumption, as well as CO2 emissions. Hence, the sustainable and efficient use of energy is crucial.

The demand for building automation systems is increasing with the growing focus on the reduction of energy consumption and maintenance costs of buildings. Building automation systems play an important role in optimizing energy usage and reducing energy costs. HVAC and lighting control systems consume maximum energy. According to the IEA, currently, air heating and cooling, together with water heating, account for ~60% of the global energy consumption in buildings. Therefore, they represent a major opportunity to reduce the energy consumption of buildings. Building automation systems also help automate HVAC and lighting systems, saving 5–30% of the overall energy consumption of a building. Moreover, building automation systems assist in reducing the overall building maintenance cost by providing building operators with early diagnosis of operational issues in equipment, if any. This helps prevent losses and inconvenience due to unexpected breakdowns.

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Restraint: False notion about high installation costs of building automation systems

Building automation systems help in saving energy and reducing operating and maintenance costs. However, end users and building owners are reluctant to these systems due to their false perception that the installation costs of these systems are high. They are unaware of the fact that the cost is primarily dependent on the complexity of integration pertaining to a specific application. End users demand affordable building automation systems but fail to realize the extent of the energy savings and the associated benefits of long-term cost savings. On an average, lighting accounts for about 25% of a building’s energy usage. With lighting control systems, the lighting cost can be reduced by 30–60% while enhancing lighting quality and reducing environmental impact. Besides this, the initial investment in building automation and control systems can be easily recovered in a few years as it helps reduce energy costs, maintenance costs, and repair and replacement costs. The perception of the high cost of building automation systems and the lack of awareness about their benefits in terms of long-term cost savings can hinder the adoption and growth of the building automation system market globally.

Opportunity: Rise in government and stakeholder funding for developing smart cities

Nowadays, cities need innovative solutions to overcome long-term challenges such as controlling traffic flows, managing waste, meeting energy-efficiency targets, controlling security breaches, and managing city surveillance owing to rapid urbanization. Governments in developing economies, including China and India, are focusing on developing smart cities through huge government and stakeholder funding to curb the long-term challenges arising from growing urbanization. With increasing threats from terrorism, both international and domestic, public-concentrated areas, including government offices, buildings, schools, and prisons, are exposed to security threats. Thus, governments across the world, especially in developing countries, are concentrating on investing in video surveillance, access control, and fire protection systems for building automation projects in smart cities.

Challenge: Absence of standard communication protocols

The power of building automation systems lies in synchronization and communication among various equipment used in the overall system. Communication protocols play a vital role in ensuring the proper integration of various devices and equipment for the smooth functioning of BAS. However, the lack of common open communication protocols may lead to the use of different protocols by these devices. It restricts the communication between different devices and obstructs the effortless functioning of building automation systems as all protocols may not be directly compatible with each other. For instance, BACnet and LonWorks do not work well with each other but work well with DALI. The building operator needs to select the products based on protocols that are used by several different vendors to avoid complexities. For instance, Clipsal C-Bus is the commonly used building automation system in Australia, while M-Bus is popular in Europe. Manufacturers are looking forward to having proprietary protocols and standards to gain a competitive advantage in the marketplace. This intense competition in the market is leading to the lack of development of products with common standards and communication protocols, thereby hampering the growth of the building automation system market.

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