FACTS AT A GLANCE
Edition: 5; Released: July 2021
Executive Pool: 666
Companies: 30 – Players covered include Altura Associates, Inc.; Daikin Industries Ltd.; General Electric; Integrated Environmental Solutions (IES) Limited; Johnson Controls International plc; Kingspan Group plc; NetZero Buildings; Rockwool Group; Sage Electrochromics, Inc.; Schneider Electric; Siemens AG; Solatube International Inc.; SunPower Corporation; Xtratherm Limited and Others.
Coverage: All major geographies and key segments
Segments: Product (HVAC Systems, Walls & Roofs, Lighting, Other Products); Building Type (Commercial, Residential)
Geographies: World; United States; Canada; Japan; China; Europe (France; Germany; Italy; United Kingdom; and Rest of Europe); Asia-Pacific; Rest of World.
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Global Net-Zero Energy Buildings (NZEBs) Market to Reach $47.4 Billion by 2026
Buildings are responsible for carbon emissions at various different levels, ranging from how they are constructed and where they are located to how they are used. Buildings and buildings construction combined are responsible for 36% of global energy consumption and 39% of energy-related carbon emissions in a year. In the US, 40% of the total energy is consumed for providing comfortable and well-lit commercial and residential buildings. Globally, carbon emissions from buildings are primarily generated from daily energy use for lighting, cooling, and heating the buildings, called operational carbon emissions, and account for 28% of energy-related carbon emissions annually. Another key factor is growing energy demand for cooling as air-conditioner ownership rises with worsening extreme heat. For instance, in the US, air conditioners use about 6% of the entire electricity produced, at an annual cost of about US$ 29 billion to homeowners. As a result, nearly 117 million metric tons of CO2 emissions are released into the atmosphere per year. Cutting carbon emissions from heating and cooling will be critical to keep global average temperatures from rising by more than 1.5 degrees Celsius above preindustrial levels.
Hence, while designing strategies for climate protection, it is vital to consider steps towards reducing carbon pollution from commercial and residential buildings. In order to achieve the targets of the Paris Climate Agreement, the central objective of which is to hold global average temperature increase to 1.5°C, buildings’ energy intensity, defined as the amount of energy utilized by buildings, would need to improve on average by 30% globally by 2030. While energy intensity in the building sector continues to improve at an average annual rate of 1.5%, the nearly 2.3% growth in global floor area has been offsetting some of these improvements. Building-related carbon emissions are projected to double by 2050 in case any scalable action is not taken.
Net-zero energy buildings (NZEBs), often simply referred as zero energy buildings, have been increasingly gaining prominence across various geographical markets and regions as a mechanism for addressing climate change. These buildings utilize energy efficient technologies and renewable energy systems for consuming no more energy than generated onsite using renewable resources over a course of one year, essentially zeroing out on their own energy footprint. Instead of drawing fossil fuel-based energy from the grid, a NZEB generates its own energy from renewable systems, such as geothermal, solar, or wind. In case the building is unable to do so, it runs off carbon-free clean energy that is purchased from a sustainable power source. In recent years, owners of private commercial properties have been showing an increased interest in the development of such buildings with the aim of meeting their corporate goals, while federal agencies as well as several local and state governments are increasingly moving towards NZEB targets to conform to the regulatory mandates. The design criteria for NZEBs can vary between different building professionals and regions. For instance, the renewable energy used by these buildings could also be produced offsite using technology, such as solar panels, high-efficiency insulation and windows, and heat pumps. In all, NZEBs facilitate in minimizing the usage of non-renewable energy within the building sector, thereby contributing in reducing greenhouse gas emissions into the atmosphere during their operations.
Amid the COVID-19 crisis, the global market for Net-Zero Energy Buildings (NZEBs) estimated at US$16.8 Billion in the year 2020, is projected to reach a revised size of US$47.4 Billion by 2026, growing at a CAGR of 18.7% over the analysis period. HVAC Systems, one of the segments analyzed in the report, is projected to grow at a 18.4% CAGR to reach US$25.2 Billion by the end of the analysis period. After a thorough analysis of the business implications of the pandemic and its induced economic crisis, growth in the Walls & Roofs segment is readjusted to a revised 20.4% CAGR for the next 7-year period. This segment currently accounts for a 29.1% share of the global Net-Zero Energy Buildings (NZEBs) market.
The U.S. Market is Estimated at $6.2 Billion in 2021, While China is Forecast to Reach $4.2 Billion by 2026
The Net-Zero Energy Buildings (NZEBs) market in the U.S. is estimated at US$6.2 Billion in the year 2021. The country currently accounts for a 33.14% share in the global market. China, the world second largest economy, is forecast to reach an estimated market size of US$4.2 Billion in the year 2026 trailing a CAGR of 22.5% through the analysis period. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 16.3% and 16.9% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 17.2% CAGR while Rest of European market (as defined in the study) will reach US$5.1 Billion by the close of the analysis period.
Governments’ focus and emphasis on energy efficient buildings bodes well for market growth in the coming years. Various countries are embarking on regulatory action for reducing consumption of energy or other resources of buildings. Governments have realized that local policies and actions are bound to share the energy future while mitigating global issues like climate change. Achieving energy-efficient buildings is a cost-effective and the fastest approach to reduce carbon emissions as well as ensure sustainable development. Rising focus of governments on energy-efficient buildings can be attributed to their numerous benefits such as social, economic and environmental development. Efficient building construction and design are capable of remarkably improving energy-related affordability and access for low-income population in cities while providing people with better access to basic services including clean water, education and medical care. Energy-efficient buildings can considerably reduce the electricity demand along with related carbon emissions or other air pollutants. The benefit holds high relevance for emerging and developing countries. Despite these benefits there are certain barriers to achieve energy-efficient buildings, such as low investments and efficiency gap. These issues are driving policy intervention that is anticipated to increase participation of different stakeholders to ensure consistent improvements in energy efficiency of buildings.
Lighting Segment to Reach $3.2 Billion by 2026
In the global Lighting segment, USA, Canada, Japan, China and Europe will drive the 16.9% CAGR estimated for this segment. These regional markets accounting for a combined market size of US$1 Billion in the year 2020 will reach a projected size of US$3 Billion by the close of the analysis period. China will remain among the fastest growing in this cluster of regional markets. Led by countries such as Australia, India, and South Korea, the market in Asia-Pacific is forecast to reach US$260.1 Million by the year 2026. More
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