Industrial Energy-Efficiency Services Market Size, Share, and Trends 2024 to 2033

Industrial Energy-Efficiency Services Market Size and Growth

The global industrial energy-efficiency services market size was USD 12.52 billion in 2023, calculated at USD 13.04 billion in 2024 and is expected to reach around USD 18.77 billion by 2033, expanding at a CAGR of 4.13% from 2024 to 2033. Reduced energy use results in lower energy costs, which helps businesses' bottom lines.

Industrial Energy-Efficiency Services Market Key Takeaways

• North America held the largest share of the industrial energy-efficiency services market in 2023.
• Europe is expected to host the fastest-growing market during the forecast period.
• By type, the energy auditing or consulting segment led the market in 2023.
• By type, the monitoring & verification segment is expected to grow at the fastest rate in the market in the coming years.
• By application, the petrochemical segment dominated the market in 2023.
• By application, the electric power segment is expected to expand rapidly in the market over the projected period.
• By end use, the commercial segment held the largest share of the market in 2023.
• By end use, the industrial segment is expected to grow at the fastest rate in the market in the coming years.
• By service type, in 2023, the outsourced segment dominated the market.
• By service type, the in-house is expected to develop significantly in the market over the years studied.

Market Overview

The industrial energy-efficiency services market is a developing industry with the goal of optimizing energy use in industrial operations to increase productivity, cut expenses, and lessen environmental effects. Governments all throughout the world are putting strict laws into place with the goal of lowering carbon emissions and encouraging industry energy efficiency. More efficient energy monitoring and optimization are made possible by developments in smart grids, IoT, and energy management systems.

The industrial energy-efficiency services market is expected to increase significantly due to a combination of technological, legal, and economic considerations. The market will continue to advance due to the emphasis on sustainability and cost-cutting, making it an essential area of investment for industrial sectors all over the world. It is anticipated that these technologies will improve energy management systems, giving them greater predictability and flexibility.

The industrial energy-efficiency services market will be supported by the expansion of microgrids and distributed energy resources. Enhanced cooperation to create comprehensive energy efficiency solutions amongst industrial businesses, service providers, and technology providers. Certain areas lack knowledge regarding the advantages and prospects associated with energy efficiency.

Industrial Energy-Efficiency Services Market Growth Factors

• Important motivators include strict environmental laws and initiatives to cut carbon emissions and boost the energy economy. Governments globally are implementing legislation and incentives to encourage the industrial energy-efficiency services market.
• Businesses are realizing more and more that energy efficiency can result in significant cost savings. Reduced energy use lowers operating expenses, which boosts profitability. Industries find it financially viable to engage in energy efficiency solutions due to rising energy costs.
• Technological innovations like machine learning, IoT, AI, and smart grids offer new means of enhancing energy efficiency. These technologies make better energy use monitoring, control, and optimization possible. The industrial energy-efficiency services market is driven by the advancement and uptake of sophisticated energy management systems, which enable more efficient energy use.
• A lot of businesses are establishing challenging targets for corporate social responsibility (CSR) and sustainability. Services for energy efficiency assist businesses in achieving these objectives and improving their reputation.
• The need for energy efficiency services to support new and expanding businesses is driven by the growth of industrial activity, particularly in emerging economies. There is a market for retrofit services since older industrial facilities frequently need to be upgraded to increase energy efficiency.
• Industry investment in energy efficiency enhancements is facilitated by the emergence of finance models such as energy performance contracts (EPCs) and third-party financing options.

Industrial Energy-Efficiency Services Market Scope

Industrial Energy-Efficiency Services Market Dynamics

Driver

Development of renewable energy sources

One of the most important steps toward attaining sustainable industrial growth and lowering greenhouse gas emissions is the development of renewable energy sources in the industrial energy efficiency services sector. In order to increase energy efficiency, lower operating costs, and improve environmental performance, this entails incorporating renewable energy technologies and solutions into industrial operations.

Various industrial processes use biomass, biogas, and biofuels to generate heat and electricity. Trash-to-energy systems help with trash management and energy efficiency by turning industrial waste into usable energy. Thorough energy audits are useful in locating inefficiencies and potential areas for process improvement in industrial settings. This involves assessing how well renewable energy sources might be integrated.

Restraint

Limited access to financing

There are a number of reasons why the industrial energy-efficiency services market has limited finance availability. By being aware of these, stakeholders may better resolve obstacles and increase access to money that is required. Energy efficiency initiatives may take several years to pay for themselves, which makes them less appealing than other projects with quicker payback times. Investors may be discouraged by unclear information regarding the performance and real energy savings of the deployed systems. It can be challenging for traditional bankers to comprehend and accept the complicated financial models and specialized financing methods that energy efficiency projects frequently demand, such as shared savings agreements and Energy Performance Contracts (EPCs).

Opportunity

Energy performance contracting

An energy service company (ESCO) first does an energy audit to find possible areas for an industrial operation to save energy. Analyzing equipment efficiency, trends in energy use, and possible areas for improvement are all part of this. After the plan is approved, the ESCO puts the agreed-upon actions into action. These could involve installing energy-efficient technologies, streamlining procedures, or updating equipment. The savings resulting from the measures themselves frequently cover the cost of the energy efficiency upgrades. This implies that the project's cost is covered by the energy savings realized by the industrial facility, usually over a predetermined length of time.

Type Insights

The energy auditing or consulting segment led the industrial energy-efficiency services market in 2023. Large volumes of energy are consumed by industrial facilities. Therefore, even modest increases in efficiency can result in substantial cost savings. Energy audits assist in locating inefficient regions and make recommendations for ways to cut energy use, which lowers operating expenses for industrial clients. The use of energy in industries is a significant source of pollution in the environment, including carbon emissions.

Businesses can lessen their environmental impact, support sustainability initiatives, and improve their reputation by increasing energy efficiency. Every industrial plant is different, posing different opportunities and problems for increasing energy efficiency. Energy auditing and consulting services maximize the efficiency of energy-saving activities by offering customized solutions that cater to the unique requirements and limitations of each customer.

The monitoring & verification segment is expected to grow at the fastest rate in the industrial energy-efficiency services market in the coming years. Setting a baseline for energy usage is the first step in M&V. This acts as a benchmark for measuring the energy savings that come from efficiency improvements. M&V includes gathering and examining data on production output, energy usage, and other pertinent variables. Patterns, abnormalities, and areas for development can be found with the aid of advanced analytics.

M&V uses a baseline energy usage comparison to confirm that energy-saving solutions are performing as intended. This verification procedure guarantees that the anticipated energy savings are realized. M&V produces reports that include performance indicators, energy savings, and other pertinent data. Stakeholders such as industrial facilities, energy service companies (ESCOs), and regulatory authorities need to have access to these reports.

Application Insights

The petrochemical segment dominated the industrial energy-efficiency services market in 2023. The market for industrial energy efficiency services is heavily influenced by the petrochemical sector. Because the complicated processes required in refining crude oil and natural gas into various chemical compounds are involved, petrochemical plants are usually energy-intensive enterprises. These facilities use a lot of energy as a result, which makes energy efficiency crucial for both cost-cutting and environmental sustainability.

Large volumes of waste heat are frequently produced by petrochemical operations; this waste heat can be collected and repurposed via heat recovery systems to warm feedstock or provide steam for other uses. By installing CHP systems, petrochemical factories can increase total energy efficiency by producing electricity on-site and using waste heat for other industrial processes, such as heating.

The electric power segment is expected to expand rapidly in the industrial energy-efficiency services market over the projected period. The market for industrial energy efficiency services is heavily influenced by the electric power industry. Since companies use a large amount of the world's energy, it is essential to maximize their energy use for both cost and sustainability.

One of the main inputs used by industry is electricity. Energy service companies (ESCOs) frequently analyze patterns of electric power consumption, spot inefficiencies, and suggest ways to improve usage during energy audits and assessments. Electric utilities frequently offer DSM programs with the goal of lowering peak electricity consumption. Industrial facilities can take advantage of these programs by lowering their peak electricity consumption periods through the implementation of energy-saving solutions.

End-use Insights

The commercial segment held the largest share of the industrial energy-efficiency services market in 2023. Energy efficiency services geared for commercial structures and businesses, including office buildings, retail stores, hotels, hospitals, and educational institutions, are generally referred to as the commercial section of the industrial energy-efficiency services market. These services are designed to maximize energy use, minimize waste, and improve overall energy efficiency in business environments. 

Thorough evaluations of the energy use of commercial buildings to pinpoint inefficiencies and suggest ways to improve. Energy-efficient HVAC system installation, routine maintenance, and upgrades are ways to increase effectiveness and lower energy usage. Renewable energy technology can augment conventional energy sources and lessen dependency on fossil fuels, such as solar or wind power.

The industrial energy-efficiency services market's industrial segment generally includes a broad range of industries, including mining, manufacturing, oil and gas, chemicals, automotive, and other sectors. These sectors place a high priority on energy efficiency since they use a lot of energy in their daily operations. The industrial segment is expected to grow at the fastest rate in the market in the coming years.

Providers of industrial energy efficiency services give a range of options to assist these sectors in maximizing their energy use, cutting waste, and raising overall productivity. Carrying out thorough energy audits to find inefficient areas and locations where improvements can be made. Advised and put into practice modifications to energy-efficient machinery, including pumps, motors, HVAC systems, and lighting. Helping businesses in the industrial sector incorporate sustainable energy sources like biomass, solar, and wind into their operations.

Service Type Insights

The outsourced segment dominated the industrial energy-efficiency services market in 2023. The fraction of services offered by external third-party service providers in the market that are not handled internally by the industrial enterprises themselves is referred to as the outsourced segment. These services may include energy audits, the installation of energy-saving devices, energy management systems, performance monitoring, and continuous maintenance, among other initiatives targeted at enhancing energy efficiency in industrial operations. Industrial businesses can benefit from outsourcing these services in a number of ways, such as cost savings, flexibility, and the opportunity to concentrate on core business operations while leaving energy efficiency responsibilities to professionals.

The in-house is expected to develop significantly in the industrial energy-efficiency services market over the years studied. The term "in-house segment" in the context of the industrial energy-efficiency services market describes energy-saving measures that are applied directly in a business's own premises or activities. This section covers the steps that industrial businesses themselves have made to maximize energy use, cut waste, and enhance general efficiency in their buildings, machinery, and production processes. To find places where energy is wasted and potential for improvement, businesses audit and evaluate their facilities. Teaching staff members energy-saving techniques and motivating them to participate in energy-saving initiatives. Furthermore, internal efforts may be customized to meet the unique requirements and conditions of particular businesses, which makes them extremely flexible and efficient energy management solutions.

Regional Insights

North America held the largest share of the industrial energy-efficiency services market in 2023. To encourage the use of energy-efficient technology, governments are putting stricter rules into place. This is especially true in the United States and Canada, where big manufacturing operations are big energy users and are, therefore, the main targets of these rules. Reducing the environmental impact of industrial activities and promoting sustainability are becoming more and more important. Because of this, there is a growing need for energy efficiency services as businesses work to achieve these objectives. Despite obstacles such as high starting prices and implementation difficulties, the North American industrial energy efficiency services industry is expected to increase steadily due to regulatory demands, technology advancements, and sustainability aspirations.

Europe is expected to host the fastest-growing industrial energy-efficiency services market during the forecast period. Europe's market for industrial energy efficiency services has been expanding gradually as a result of a number of causes, such as stricter laws and regulations, escalating energy prices, and greater public awareness of environmental sustainability. Energy audits are required by directives like the Energy Efficiency Directive (2012/27/EU), which also promotes energy management systems in all companies. Industries are forced to optimize energy consumption in order to stay competitive due to rising energy prices. Organizations are being pushed to embrace energy-efficient techniques by expanding corporate social responsibility (CSR) programs and environmental objectives. More efficient energy consumption monitoring and reduction are made possible by advancements in energy management systems, IoT, and AI-driven analytics.

Industrial Energy-Efficiency Services Market Companies

• Siemens
• Honeywell
• TERI
• DuPont
• Dalkia
• ENGIE
• Getec
• ISTA
• Johnson Controls
• Schneider Electric
• SGS
• Wood

Recent Developments

• In June 2024, ComEd intends to give people the tools and training they need to compete for jobs in the energy-efficiency sector while also advancing that sector in Illinois with the introduction of the new Market Development Initiative (MDI).
• In November 2023, in order to promote sustainability, TARSHID, the National Energy Services Company of Saudi Arabia, has partnered with Enova, a regional provider of integrated energy and facilities management services, to initiate energy savings guarantee initiatives in public sector buildings.

Segments Covered in the Report

By Type

• Energy Auditing Or Consulting
• Product And System Optimization
• Monitoring & Verification
• Energy Management Software

By Application

• Petrochemical
• Chemical Industry
• Electric Power
• Textile
• Building Materials
• Mining
• Manufacturing
• Food & Beverage

By End-use

• Commercial
• Industrial

By Service Type

• Outsourced
• In-House

By Geography

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East & Africa