The advanced energy market is expected to grow by USD 36.3 billion, at a compound annual growth rate (CAGR) of 4.25% between 2023 and 2028. Significant investments are being made in the development of clean energy technologies, including energy storage solutions and renewable energy sources, which are driving market expansion. Government support through incentives and regulations is also fostering growth in advanced energy markets, ensuring continued progress in the sector.
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The on-grid segment is expected to experience significant market share growth. On-grid technologies focus on the integration of renewable energy with efficient energy use and smart grids. The major drivers for the growth of this segment are the growing adoption of smart grids, the integration of clean energy technologies (solar and wind), and the use of storage systems. Lower costs for solar PV plants and high levels of government support are making it more feasible to install solar PV systems in public utilities and residential sectors. The residential sector's adoption of on-grid installations is expected to further drive the growth of this segment during the forecast period.
The growing focus on clean energy technologies is a key driver of the market's expansion. Nearly half of the electricity consumed in the U.S. is provided to commercial and residential buildings, with the residential sector being a major consumer. In Europe, a large portion of electricity is consumed for heating in residential buildings. The adoption of zero-energy buildings (ZEBs), which generate power using renewable energy sources like solar PVs, fuel cells, and energy storage technologies, is playing a critical role in reducing energy consumption and greenhouse gas emissions. ZEBs are constructed with well-insulated materials to minimize leaks of heating and cooling, which improves construction efficiency. These buildings not only produce on-site renewable energy but also reduce peak energy demand by feeding clean energy back to the grid, increasing the utilization of solar PV and driving market growth.
A significant trend in the advanced energy market is the rise of zero-energy buildings (ZEBs), especially within the residential sector. A substantial portion of electricity in Europe is consumed for heating, prompting the construction industry to implement energy-efficient measures such as improved designs and materials. These advancements reduce greenhouse gas emissions and reliance on fossil fuels, promoting a healthier and more productive environment.
ZEBs generate energy from renewable sources such as solar PV, fuel cells, and energy storage technologies. These buildings reduce electricity consumption through interior design strategies that support low-carbon energy systems. ZEBs’ implementation is being driven by government legislation and directives in various countries. With the increasing adoption of ZEBs, the utilization of solar PV systems is expected to rise, further fueling market growth during the forecast period.
A significant challenge for the advanced energy market is the lack of standardization. The absence of standardized practices within the grid system is creating a gap in power systems' interoperability. This mismatch among systems hampers the deployment of advanced energy technologies, particularly smart grids and energy storage systems, affecting their smooth functioning. Utilities are facing difficulties implementing interoperable systems, and the implementation of standardized security practices remains a key challenge. The divergence in standards is expected to hinder the market's growth during the forecast period.
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Several key players are shaping the competitive landscape of the advanced energy market. These include:
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