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Analyst sees 203M grid-interactive buildings by 2031 at 13% CAGR

Jan. 20, 2023
Guidehouse Insights' market driver estimates include grid modernization and decarbonization goals, the rise of the energy prosumer, technological advances, and supportive policies and regulations.

A new report from Guidehouse Insights (Boulder, Colo.) analyzes the growth of grid-interactive buildings engaged with three primary technologies: demand response (DR), solar power generation, and battery energy storage.

As noted by the researcher's report summary:

"In the past, buildings simply consumed energy and grid operators adjusted supply to meet energy demand. Today, the proliferation of distributed energy resources (DER), such as onsite solar PV, battery storage, and grid-connected appliances (e.g., thermostats and water heaters), allow buildings to have two-way interactions with the grid."

According to the new report, the number of grid-interactive buildings participating in DR, generating solar power, and equipped with battery energy storage combined worldwide is expected to increase from 67.9 million in 2022 to 202.5 million in 2031, at a compound annual growth rate (CAGR) of 12.9%.

Wendy Davis, senior research analyst with Guidehouse Insights, commented:

“Digitalization and technological advances have transformed the ways that buildings interact with the electric grid. With these technologies, building owners have greater control and flexibility over their energy generation and consumption and are incentivized to provide benefits to the grid, like shedding or shifting loads during periods of supply constraint.”

Market conditions

The new report notes that several market conditions are driving increased building-to-grid (B2G) integration, including grid modernization and decarbonization goals, the rise of the energy prosumer, technological advances that have made enabling hardware and software readily available, and supportive policies and regulations.

Nonetheless, the researcher contends this market faces several challenges, including uneven technology maturity and adoption, relatively low consumer awareness and acceptance, incumbent energy business models and policies, and concerns about equipment interoperability and cybersecurity, according to the report.

The report, entitled Building-to-Grid, analyzes the global building stock interacting with the electrical grid through participation in demand response, solar power generation, and battery energy storage.

Market drivers and barriers are discussed in relation to the motivations of diverse stakeholders, including building owners, utilities, regulators, and equipment vendors.

Global market estimates of the number of grid-interactive buildings, segmented by building group (commercial, institutional, and residential) and global region (North America, Europe, Asia Pacific, and Rest of World), extend through 2031.

An executive summary of the report is available for free download on the Guidehouse Insights website. 

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