BUILDING ENERGY SIMULATION SOFTWARE MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The global Building energy simulation software market size was valued at US$ 4.90 billion in 2023 and is expected to reach US$ 10.36 billion by 2030, grow at a compound annual growth rate (CAGR) of 11.3% from 2023 to 2030. Building energy simulation software helps in predicting and analyzing energy consumption of a building during its early design stage. It is used by architects, engineers, and contractors to design energy-efficient buildings as per mandated regulations and green building standards. The growth of the market is driven by government regulations for energy-efficient buildings and the increasing adoption of green buildings globally.

The Building Energy Simulation Software Market is segmented by component, application, end-use industry, deployment model, organization size, and region. By component, the software segment accounted for the largest share of the Building Energy Simulation Software Market in 2022. Software helps in creating a virtual model of a building and simulates aspects like lighting, HVAC, system controls, among others to analyze the energy performance. The increasing need to comply with stringent regulations is driving the demand for building energy simulation software.

Building energy simulation software Market Regional Insights

• North America is expected to be the largest market for Building Energy Simulation Software Market during the forecast period, accounting for over 35% of the market share in 2022. The growth of the market in North America is attributed to supportive government regulations such as updated ASHRAE standards in the US and increasing green building construction.
• The Europe market is expected to be the second-largest market for Building Energy Simulation Software Market, accounting for over 25% of the market share in 2022. The growth of the market in Europe is attributed to high adoption of sustainable building practices and standards such as EU Energy Performance of Buildings Directive.
• The Asia Pacific market is expected to be the fastest-growing market for Building Energy Simulation Software Market, with a CAGR of over 20% during the forecast period. The growth of the market in Asia Pacific is attributed to rapid urbanization and increasing construction of commercial buildings equipped with advanced technologies.

Figure 1. Global Building Energy Simulation Software Market Share (%), by Region, 2023

Building energy simulation software Market Drivers:

• Government regulations and policies for energy efficiency: Governments across the globe are implementing stringent policies and regulations to mandate energy-efficient infrastructure. For instance, the EU Energy Performance of Buildings Directive requires all new constructions to meet renewable energy requirements. The US also has stringent building codes such as ASHRAE 90.1 for commercial buildings. Such regulations are driving the demand for building energy simulation software to ensure compliance. Architects, engineers, and contractors are increasingly adopting building simulation solutions to model energy consumption and optimize the design. The software helps in making informed decisions to develop sustainable buildings.
• Growing adoption of green buildings: The rising awareness about environmental impact has led to a significant increase in the construction of green buildings over the past decade. Green buildings aim to reduce energy and water consumption through efficient design, materials, and renewable technologies. For instance, the global green building materials market is expected to reach USD 364.6 billion by 2028 from USD 254.2 billion in 2021, growing at a CAGR of 5.9%. Building energy simulation software plays a crucial role in designing green buildings that meet stringent certification criteria like LEED and BREEAM. The software enables construction firms to create sustainable infrastructure with minimal environmental impact.
• Need to reduce operational costs: With energy costs rising significantly, commercial building owners and residential builders are looking for ways to curb operational expenditures. Building energy simulation provides a cost-effective method to identify design issues and test potential energy-saving alternatives in the beginning stages of construction. The software generates data on the energy performance of various materials, systems, and equipment to enable cost savings. According to the US EIA, the use of energy modeling tools can help in reducing energy consumption by 25% in residential buildings.
• Advancements in BIM and simulation technologies: Building information modeling (BIM) and simulation technologies are undergoing continuous advancements with integration of AI, IoT, and cloud-based solutions. BIM coupled with building performance simulation enables architects and engineers to create digital twins and perform rapid computations to achieve the most optimized design. Advanced solutions leverage predictive analytics to provide actionable insights for efficiency improvements. The integration of simulation capabilities with tools like Revit and ArchiCAD provides a streamlined workflow.

Building energy simulation software Market Opportunities:

• Emergence of net zero energy buildings: Net zero energy buildings are gaining significant traction in recent years as they effectively reduce carbon footprint by producing as much renewable energy as they consume. According to New Buildings Institute, the global net zero buildings market is expected to reach over USD 1 trillion by 2030. Building energy simulation software plays a crucial role in designing highly efficient net zero energy infrastructure. The growth in net zero buildings construction presents major opportunities for market players to provide advanced simulation solutions.
• Growing smart city projects: With rapidly growing urbanization, governments across the globe are initiating smart city projects focused on sustainable infrastructure. These projects utilize ICT, IoT, renewable energy and energy-efficient technologies in buildings. According to Frost & Sullivan, the global smart city market is expected to reach USD 2 trillion by 2025. Smart city development will drive the adoption of building energy simulation software to plan low-carbon, eco-friendly buildings to reduce the environmental impact.
• Cloud-based software as a service: The SaaS model for building energy simulation software is gaining swift momentum over the past few years owing to its flexibility, scalability, and affordability. Cloud-based solutions do not require any upfront installation or investment in IT infrastructure, thereby reducing the costs. They also offer anytime access to advanced simulation capabilities. SaaS provides an opportunity for software vendors to attract small and medium construction firms.
• Growing construction industry: The global construction market has witnessed steady growth driven by large-scale residential and infrastructure projects in developing nations. According to a Global Market Model, the construction industry is expected to reach USD 15.2 trillion worldwide by 2030. With significant growth in construction activities, there will be a high demand for building energy simulation software to comply with energy codes and construct sustainable buildings.

Building energy simulation software Market Trends:

• Integration with AR and VR: Augmented reality and virtual reality are being increasingly integrated with building energy simulation software solutions. AR allows architects and designers to visualize a simulated model in the actual site environment, enabling real-time collaboration and decision making. VR enables immersive walkthroughs of digital prototypes. For instance, Autodesk now offers Revit Live that leverages VR technology to create interactive 3D views. Integration of such technologies greatly enhances the design process.
• AI and generative design: Artificial intelligence and generative design are disrupting building energy simulation software offerings. Vendors are integrating AI algorithms into simulation tools for intuitive modeling, improved interoperability and rapid analysis of massive design permutations. Autodesk and Siemens now provide generative design capabilities that leverage AI to automatically generate and test design options to identify the most energy-efficient alternative.
• Connectivity with IoT sensors: Building energy simulation software integrated with IoT sensors enables real-time data collection and simulation of actual building performance during the operation phase. IoT allows remote monitoring and control to continuously maintain efficiency. For instance, Schneider Electric provides EcoStruxure solution that leverages IoT-enabled building simulation for data-driven decision making and predictive maintenance. The fusion of simulation and IoT unlocks major opportunities for energy savings.
• Cloud computing for performance optimization: Cloud computing enables building energy simulation software to utilize scalable computing power for running multiple iterative, complex simulations in parallel. This provides rapid computational fluid dynamics capabilities for modeling intricate systems like natural ventilation and renewable systems. Cloud offers the benefit of accelerated optimization of building performance for efficiency. Vendors like Autodesk now offer cloud-based simulation solutions.

Building energy simulation software Market Restraints:

• High deployment costs: While building energy simulation software provides major benefits, the costs of implementation remain high, especially for small firms. The expenses include costs of software licenses, training staff, integrating with existing workflows, and hardware upgrades which discourage adoption. Many vendors provide only on-premise deployment, leading to substantial IT infrastructure costs. Lack of skilled expertise further inflates costs of modeling and analysis.
• Interoperability issues: Integrating building energy simulation software with commonly used BIM and CAD modeling tools involves significant interoperability challenges. Incompatibility of formats like gbXML and IFC causes data loss and rework. This hinders optimal utilization of simulation capabilities during design. Developing open standards for seamless integration remains a major restraint for the growth.
• Accuracy of simulations: Although advanced simulation programs are available, uncertainties remain regarding the accuracy of results. Small discrepancies in input parameters can vastly impact energy use estimations. Factors like real-time weather data integration and predicting occupant behavior also influence precision. Limitations in replicating real-world scenarios restrain the reliability, preventing complete user confidence.

Recent Developments

New product launches

• In March 2022, Autodesk launched Autodesk Tandem, a new building design software that uses cloud computing to perform multiple energy simulations in parallel for faster analysis. It aims to help architects evaluate design decisions related to sustainability at the earliest stages.
• In January 2021, Sefaira introduced Sefaira Pro, a building design software for architects that offers enhanced energy modeling capabilities and core BIM integrations with tools like Revit. It aims to simplify and accelerate the building design optimization process.
• In November 2020, EnergyPlus version 9.5 was released by the US Department of Energy with enhanced features such as support for solid desiccant systems, airflow network simulations, PV battery storage modeling capabilities. It enables more accurate modeling for innovative building equipment.

Acquisition and partnerships

• In October 2022, Engie Solutions acquired ESC, a building energy management solutions provider, to expand its offerings of net zero carbon solutions for the commercial real estate sector.
• In June 2021, Schneider Electric partnered with ETAP, an electrical power systems modeling software provider, to help users optimize building energy efficiency and meet decarbonization goals.
• In May 2019, Autodesk acquired BuildingConnected, a construction bid-management platform, to enhance its BIM solutions with bid and risk management capabilities for seamless project delivery.

Figure 2. Global Building energy simulation software Market Share (%), by Deployment Model, 2023

Top companies in Building energy simulation software Market

• Autodesk, Inc.
• IES (Integrated Environmental Solutions)
• Bentley Systems
• Dassault Systèmes
• EnergyPlus
• CYPE Software
• DesignBuilder Software
• IESVE (IES Virtual Environment)
• Carrier
• eQUEST
• Trane Technologies
• IES TaP
• IES SCAN
• Trimble
• EnergySoft

Definition: Building energy simulation software refers to an advanced computerized program that offers dynamic and comprehensive analysis of energy consumption of all systems and equipment of a building such as lighting, HVAC, system controls, renewables etc. It creates a virtual model of the building and simulates various aspects to analyze annual, monthly and hourly energy performance data.

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