Net-Zero Energy Buildings Market By Equipment (Lighting, Walls & Roofs, HVAC Systems, Others); By Service (Software, Consulting & Designing); By Building Type (Commercial, Residential); By Region (North America, Europe, Asia Pacific, Latin America, Middle East & Africa) - Global Market Analysis, Trends, Opportunity and Forecast, 2022-2032

Net-Zero Energy Buildings Market Overview and Definition

The global net-zero energy buildings market size was valued at around USD 65.8 billion in 2022 and is projected to grow at a compound annual rate of growth (CAGR) of around 18.7% from 2022 to 2032.The market size is projected to succeed in USD 365.4 billion by 2032.

The global net-zero energy buildings market is expected to witness growth at a compounded annual growth rate (CAGR) of 18.7% during the forecast period of 2022-2032. Net-zero energy buildings, also known as zero energy buildings, are becoming more and more popular as a means of tackling climate change in a variety of sectors and areas. In order to consume no further energy than is produced on-site utilizing renewable resources over the course of a year, these buildings use energy-efficient technologies and renewable energy systems, effectively eliminating their own energy footprint. A net-zero energy buildings produces its own electricity from renewable sources like geothermal, solar, or wind rather of utilizing the grid's fossil fuel-based energy.

Net-zero energy buildings (NZEBs) are buildings that generate as much energy as they consume, through the use of renewable energy technologies and energy-efficient design strategies. The global market for NZEBs has been growing in recent years, as more countries and organizations aim to reduce their carbon footprint and mitigate the impacts of climate change.

Overall, the net-zero energy buildings market is expected to continue growing in the coming years, as more organizations and governments adopt sustainable building practices and seek to reduce their carbon footprint.

Net-Zero Energy Buildings Market Key Drivers

The net-zero energy buildings market is driven by a combination of factors, including government policies and regulations, increasing awareness of climate change and sustainability, advances in technology, and the desire for cost savings and improved building performance. Here are some of the key drivers behind the growth of the NZEB market:

Government policies and regulations: Many governments around the world have set targets and regulations to reduce carbon emissions and increase energy efficiency. For example, the European Union has set a goal for all new buildings to be NZEBs by 2020, while California has set a target for all new residential buildings to be NZEBs by 2020 and all new commercial buildings to be NZEBs by 2030. These policies and regulations are driving demand for NZEBs and creating a supportive environment for the industry.

Rising awareness of climate change and sustainability: Climate change and sustainability are increasingly in the public eye, and many consumers and organizations are looking for ways to reduce their carbon footprint and operate more sustainably. NZEBs offer an attractive solution, as they can help to reduce carbon emissions, improve energy efficiency, and support renewable energy sources.

Advances in technology: Advances in technology have made it easier and more cost-effective to design and construct NZEBs. For example, improvements in building materials, such as insulation and glazing, can help to improve energy efficiency, while advances in renewable energy technologies, such as solar panels and wind turbines, can help to generate clean energy on-site.

Cost savings and improved building performance: NZEBs can offer significant cost savings over the lifetime of the building, as they typically have lower energy and maintenance costs. In addition, NZEBs can offer improved building performance, such as better indoor air quality, thermal comfort, and acoustics, which can benefit the health and well-being of occupants.

The focus and emphasis placed on energy-efficient construction by governments augurs well for market expansion in the ensuing years. Many nations are implementing regulatory measures to limit the amount of energy or other resources that buildings use. Governments have come to the realization that regional and local initiatives and policies must share the energy future while addressing global problems like climate change. The most efficient and quick way to cut carbon emissions and promote sustainable development is to build energy-efficient structures. Governments' increased attention to energy-efficient construction is due to all of the positive effects it has on society, the economy, and the environment.

When it comes to energy access and pricing, efficient building design and construction can significantly benefit low-income urban residents' access to fundamental amenities like clean water, education, and healthcare. Buildings that use less energy can significantly reduce their need for electricity, as well as any associated carbon emissions or other air pollutants. The advantage is quite important for developing and emerging nations. Despite these advantages, there are several obstacles to creating energy-efficient buildings, including minimal investments and a gap in efficiency. These problems are motivating legislative changes that are anticipated to raise the involvement of various stakeholders and guarantee consistent advancements in building energy efficiency.

Net-Zero Energy Buildings Market Challenges

While the net-zero energy buildings (NZEBs) market is growing, there are several challenges that the industry is facing. These challenges include:

High initial cost: One of the main challenges of NZEBs is the high initial cost of construction, which can be a barrier to adoption for some building owners and developers. The high cost of sustainable building materials, energy-efficient appliances, and renewable energy systems can be a deterrent for those who are not willing or able to invest in long-term cost savings.

Limited availability of skilled professionals: Designing and constructing NZEBs requires a high level of expertise and technical knowledge. However, there is a shortage of skilled professionals who are trained in sustainable building practices, which can hinder the adoption of NZEBs.

Lack of standardized regulations: While many governments have set targets and regulations to reduce carbon emissions and increase energy efficiency, there is a lack of standardized regulations and guidelines for NZEBs. This can lead to confusion and inconsistency in the industry, making it more difficult for building owners and developers to navigate the regulatory landscape.

Technical challenges: The integration of renewable energy systems and energy-efficient technologies can be complex and requires careful planning and design. The variability of renewable energy sources, such as solar and wind, can also be a technical challenge, as it requires careful management and control to ensure that the building's energy needs are met.

Lack of public awareness: While awareness of sustainability and climate change is increasing, there is still a lack of public awareness about the benefits and feasibility of NZEBs. This can make it more difficult for building owners and developers to justify the cost and effort of constructing NZEBs, and can also hinder the adoption of sustainable building practices more broadly.

Net-Zero Energy Buildings Market Segmentation

By Equipment

• Lighting 
• Walls & Roofs
• HVAC Systems
• Others

By Service

• Software
• Consulting & Designing 

By Building Type

• Commercial
• Residential

By Region

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

The net-zero energy buildings market has been divided into sections for lights, walls and roofs, HVAC systems, and other equipment based on equipment. The lighting apparatus consists of lighting that uses the least amount of energy possible while still operating at a high level of effectiveness and longevity. Paneling and roofing materials, technologies, and solutions make up the walls and roofing equipment needed to erect net-zero energy buildings.

The service section has been bifurcated into software services and consulting & designing services. Architects, engineers, designers, and consultants all use software. Due to the significance of these services in the early stages of a ZNE project, the consulting and designing services segment had the largest share in 2021. The segment is anticipated to increase steadily throughout the anticipated time period as a result of growing interest in and demand for ZNE constructions from the global commercial and residential sectors. The necessity for designers and architects to practice and produce more sustainable structural designs utilizing various tools & software is expected to drive the software segment's continuous growth over the upcoming years.

The net-zero energy buildings market has been divided into commercial and residential segments based on type. Due to higher demand and adoption than the residential sector, the commercial segment had the largest market share in 2021. Over the anticipated time, the commercial segment is predicted to expand steadily. The first targets are commercial building complexes like universities, corporations, government buildings, and sizable manufacturing and production facilities. However, over the anticipated timeframe, the residential sector is expected to have the highest growth rate.

Net-Zero Energy Buildings Market: Regional Synopsis

The net-zero energy buildings market has been divided into North America, Europe, Asia Pacific, South America, and Middle East & Africa based on geographic regions. In 2016, the North American area held the greatest market share. The U.S. and Canada are the most notable technology adopters, which has contributed to the high rate of market growth in this area.

The U.S. energy department's and local organizations’ efforts to work toward achieving the sustainability of existing and new buildings, together with factors like the strict restrictions established by the U.S. government, are the main reasons driving the market growth. Additionally, California has the most net-zero buildings, which has helped them capture a sizable portion of the market.

Due to the active participation and significant efforts made by the countries in this region to achieve global sustainability, the European region is predicted to experience the highest growth rate over the forecast period. Growing public concern over creating a clean, green environment and reducing carbon emissions is anticipated to have a significant role in the regional market's expansion over the coming years.

Given the region's increasing urbanization, the Asia Pacific is anticipated to create large revenue and follow the European region's lead. Additionally, it is projected that growing infrastructure spending and local knowledge of the advantages of green construction will fuel the expansion of the NET-ZERO ENERGY BUILDINGSs market as a whole. Net-zero energy structures offer potential in both developed and developing nations, including China, South Korea, Singapore, Taiwan, India, Australia, and Japan. Therefore, regional manufacturers, builders, and service providers are highly focused on capturing prospects in the region, which observes a strong demand from the population, in cooperation with the regional governments and organizations.

Net-Zero Energy Buildings Market Key Players

Altura Associates, Inc.

Daikin Industries Ltd.

General Electric

Integrated Environmental Solutions (IES) Limited

Johnson Controls International plc

Kingspan Group plc

NetZero Buildings

Rockwool Group

Sage Electrochromics, Inc.

Schneider Electric

Siemens AG

Solatube International Inc.

Net-Zero Energy Buildings Market: Recent Developments

The net-zero energy buildings (NZEBs) market is constantly evolving, and there have been several recent developments that are shaping the industry. Here are some of the most notable recent developments:

Increasing adoption of NZEBs: NZEBs are becoming increasingly common around the world. For example, the U.S. Department of Energy's Zero Energy Ready Home program has certified over 5,000 homes since its launch in 2015, while the International Living Future Institute has certified over 40 buildings as Living Buildings, which are required to be NZEBs. In addition, many cities, including New York and San Francisco, have set targets for all new buildings to be NZEBs by a certain date.

Advancements in renewable energy technologies: Advances in renewable energy technologies, such as solar panels and energy storage systems, are making it easier and more cost-effective to generate and store clean energy on-site. This is making it more feasible to achieve net-zero energy goals, and is reducing the overall cost of NZEBs.

Increased focus on embodied carbon: While NZEBs are designed to be highly energy-efficient, they also have an impact on the environment through the embodied carbon in the materials used to construct the building. There is a growing focus on reducing embodied carbon in building materials and construction processes, and several organizations, including the Embodied Carbon Network and the Carbon Leadership Forum, have been established to address this issue.

The rise of green bonds and sustainable finance: Green bonds and sustainable finance are becoming more prevalent in the NZEBs market, as investors seek to support sustainable building projects. In 2020, the green bond market reached a record high of $270 billion, and many of these bonds were issued to support renewable energy and sustainable building projects.

Increased use of building information modeling (BIM): Building information modeling (BIM) is becoming more widely used in the NZEBs market, as it allows for detailed modeling and simulation of building performance. This can help to optimize building design and identify potential energy-saving measures before construction begins.