PUBLISHER: The Business Research Company | PRODUCT CODE: 1695027
PUBLISHER: The Business Research Company | PRODUCT CODE: 1695027
Smart demand response is a technology-driven approach aimed at managing electricity consumption in response to changes in the supply-demand balance within the power grid. This approach is crucial for reducing peak demand, balancing the power grid, and improving overall energy efficiency.
The main types of smart demand response include voluntary demand response and contractual mandatory demand response. Voluntary demand response involves a strategy where electricity consumers willingly adjust their electricity consumption patterns in response to signals or incentives provided by the grid operator or utility company. The technologies associated with smart demand response include automated demand response, direct load control, and dynamic pricing. These technologies find applications in residential, commercial, and industrial settings.
The smart demand response market research report is one of a series of new reports from The Business Research Company that provides smart demand response market statistics, including smart demand response industry global market size, regional shares, competitors with smart demand response market share, detailed smart demand response market segments, market trends, and opportunities, and any further data you may need to thrive in the smart demand response industry. This smart demand response market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.
The smart demand response market size has grown rapidly in recent years. It will grow from $31.4 billion in 2024 to $36.33 billion in 2025 at a compound annual growth rate (CAGR) of 15.7%. The growth in the historic period can be attributed to energy policy and regulation, grid reliability concerns, environmental awareness, pilot programs and demonstrations, energy price volatility.
The smart demand response market size is expected to see rapid growth in the next few years. It will grow to $59.16 billion in 2029 at a compound annual growth rate (CAGR) of 13.0%. The growth in the forecast period can be attributed to renewable energy integration, policy support and incentives, electric vehicle adoption, resilience and grid modernization, energy storage integration. Major trends in the forecast period include digitalization and iot, technological advancements, grid modernization initiatives, dynamic pricing models, expansion of iot and smart devices.
The rapid increase in energy prices is expected to drive the growth of the smart demand response market moving forward. Energy costs refer to the expenses incurred from obtaining and using various forms of energy, including electricity, fuel oil, gasoline, heating oil, and natural gas. The sharp rise in energy prices encourages greater participation in demand response (DR) programs, as it creates a financial incentive for both consumers and businesses. For example, in April 2023, Eurostat, a Belgium-based governing body, reported that in the second half of 2022, average household electricity prices in the EU saw a significant increase compared to the same period in 2021, rising from €23.5 per 100 kWh ($24.58) to €28.4 per 100 kWh ($29.92). At the same time, average gas prices rose from €7.8 per 100 kWh ($8.34) to €11.4 per 100 kWh ($12.27), highlighting substantial upward pressure on energy costs. Thus, the rapid increase in energy costs is driving the expansion of the smart demand response market.
The mounting power demand is set to propel the advancement of the smart demand response market in the coming years. Power demand denotes the total electrical energy required by consumers at a specific point in time, measured in kilowatts (kW) or megawatts (MW). Smart demand response plays a pivotal role in managing power demand by dynamically adjusting electricity consumption in response to real-time grid conditions and pricing signals. For example, in December 2023, according to the Energy Information Administration, a US-based government agency, the United States recorded a total electricity consumption of approximately 4.07 trillion kWh in 2022, marking a 3.2% increase compared to the previous year, 2021. Hence, the escalating power demand is propelling the growth of the smart demand response market.
Major companies are actively engaged in the development of innovative solutions, particularly those focused on grid-balancing in the smart demand response market. Grid-balancing involves the deployment of technologies and strategies to optimize the equilibrium between electricity supply and demand on the power grid, ensuring its stability and reliability. For example, in June 2022, CPower Energy, a US-based energy solutions provider, rolled out four nationwide demand response programs. These initiatives are intended to capitalize on the company's ongoing efforts in delivering grid-balancing solutions, especially during the summer season. The demand response programs incentivize energy users to curtail their energy consumption during peak usage periods.
Prominent players in the smart demand response market are increasingly concentrating on introducing new products optimized for the electric grid to enhance their market profitability. Electric grid-optimized products in the context of smart demand response encompass technologies and services designed to intelligently manage and adjust electricity consumption in real-time based on demand fluctuations, thereby improving efficiency and reliability. For instance, in September 2022, Rheem Manufacturing Company, a US-based manufacturer of water heaters and ventilators, launched a demand-response-enabled smart electric water heater. Engineered to meet stringent energy standards, this water heater seamlessly integrates with the power grid. With a UEF of up to 93, the product proves to be an energy-efficient choice for residents seeking to lower their energy expenses. The water heater is equipped with features such as built-in demand response capabilities, scheduled operation based on time-of-use, real-time energy consumption tracking, and advanced EcoNet Wi-Fi technology.
In October 2022, CPower, a leading US-based national energy solutions provider, successfully acquired Centrica Business Solutions LLC for an undisclosed sum. This strategic acquisition propelled CPower's distributed energy resource (DER) capacity from 5.6 GW to 6.3 GW, cementing its position as a premier national player harnessing the potential of distributed energy resources. Centrica Business Solutions LLC, a US-based integrated energy solutions company, specializes in providing energy management solutions to commercial and industrial organizations.
Major companies operating in the smart demand response market report are Enel S.p.A., Hitachi Ltd., Siemens AG, General Electric Company, Cisco Systems Inc., Oracle Corporation, Mitsubishi Electric Corporation, Schneider Electric SE, Honeywell International Inc., ABB Ltd., Johnson Controls, Toshiba Corp, Eaton Corporation PLC, Con Edison Solutions, Itron Inc., Landis+Gyr, Aclara, EnerNOC, LS Power Development LLC, Opower Inc., Comverge Inc., GridPoint, Uplight, Bidgely, Echelon Corporation, AutoGrid, Blue Pillar, Virtual Peaker, Axiom Exergy, Powerley
Asia-Pacific was the largest region in the smart demand response market in 2024. The regions covered in the smart demand response market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
The countries covered in the smart demand response market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
The smart demand response market includes revenues earned by entities through peak load management, load shifting, grid balancing, data analytics, and predictive modeling. The market value includes the value of related goods sold by the service provider or included within the service offering. The smart demand response market consists of sales of smart thermostats, smart appliances, and home energy management systems. Values in this market are 'factory gate' values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
Smart Demand Response Global Market Report 2025 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses on smart demand response market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for smart demand response ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward? The smart demand response market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
The forecasts are made after considering the major factors currently impacting the market. These include the Russia-Ukraine war, rising inflation, higher interest rates, and the legacy of the COVID-19 pandemic.