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Numerous detailed assessments of adoption drivers for Energy Management software solutions for buildings in the developed world have concluded that they must deliver the following:

* Reduce Operational Costs
* Ensure Regulatory Compliance
* Reduce Pollution
* Align with Corporate Sustainability Goals
* Meet Consumer Interest in Sustainable Products

Therefore energy management software solutions in buildings must enable energy efficiency, carbon reduction and natural resource conservation because they are all clear drivers in the adoption of Energy Enterprise Management Software (EEMS).

Through the usage of EEMS and Demand Response systems the potential for building owners and managers to make significant savings in both costs and carbon is maximised. Demand Response software can reduce the stress on national and regional electrical grids and this has prompted companies to investigate new ways to mitigate energy risks and take advantage of dynamic pricing offers from electrical utilities.

The ‘carrot’ is that within 3 years most medium and large buildings and estates would have recovered their original investment. But if the ‘carrot’ is not sufficient for building owners to invest then for many the ‘stick’, through various building energy performance legislation measures, will likely enforce them to meet these new obligations.

Around the world, cities and governments increasingly require that building owners evaluate and disclose energy consumption of commercial properties, encouraging building owners and operators towards more smart building solutions. Mandatory reporting and disclosure of building energy performance, is becoming more common. Energy consumption in existing buildings must be lowered, both to comply with emerging legislation and respond to market pressures. The implicit accounting for these energy performance improvements requires measurement and verification that can be provided by energy management software systems.

Legislation to limit CO2 generated by buildings is already in force in most countries in the developed world and in many cases the range of buildings being required to monitor and report their performance is expanding. As EEMS plays a critical role in monitoring and reporting building energy performance, this will ensure that the demand for EEMS will increase at higher levels than new building construction activity.

Growth in the popularity of Demand Response is also being driven by the need to meet CO2 emissions targets and reduce energy spending. In addition declining costs for solar PV and small wind, as well as promising innovations in distributed energy storage solutions are making the market for distributed generation and storage increasingly attractive to building owners.

The decreasing cost of monitoring and control devices are aiding EEMS to become a cost effective solution for energy management in a growing number of medium and small buildings. New market entrants also face few market barriers to entry and are focused on the implementation of low capital cost SaaS systems development, which in turn is increasing competition among vendors and driving down costs for software users.

Whilst not at the top of the drivers today, there is a growing commercial attractiveness of Smart Buildings. Tenants are attracted to buildings with well-functioning building systems, comfortable temperature and effective maintenance of equipment that rarely malfunction. With smart building systems efficiently managing the building, supported by effective analytics of big data, these things can be achieved.

Investors in commercial property are beginning to see the upside of smart building technology. Many seem confident that operational savings from smart building technologies play into an overall competitive strategy.

We estimate that the number of connected devices in buildings (excluding homes) will grow from 1.7Bn in 2014 to approaching 5.5Bn by 2020, which represents a staggering CAGR of nearly 27%. More sub metering and sensor deployments in buildings will lead to a surge in data volumes. As the volume and complexity of building related data rises, enterprise energy management systems, that help to get this data into the right hands to make sense of it and to enable effective decision making will be critical.

This article is taken from our report The Market for Building Performance Software 2016 to 2020.

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