According to a new report from Guidehouse Insights, although still a developing market space, Smart Energy Communities (SECs) are emerging at a time when there is growing demand and a growing pool of resources for their deployment.
This comes courtesy the market researcher’s report Smart Energy Communities, which pools their value within the smart cities technology market, anticipated to grow from $36.7 billion in annual revenue in 2023 to $73.3 billion by 2032, at a compound annual growth rate (CAGR) of 8.0%.
Growing demand and drivers
“SECs offer a more modular, more resilient, and cleaner approach to how residents interact with the energy infrastructure around them. Active SECs have proven their success at improving the quality of energy for vulnerable communities,” says Grant Samms, research analyst with Guidehouse Insights.
“While SECs today are generally considered a novel approach to meeting energy challenges, growing emphasis on the need to improve energy performance will drive considerable adoption in the coming decade.”
Reducing costs and improving energy stability, especially for isolated or otherwise vulnerable communities, continue to be the largest drivers of SEC adoption, finds the report.
Expensive and unreliable energy connections often coincide with such geographic or socioeconomic vulnerability due to historic underinvestment.
Addressing energy reliability issues through microgrids or community heating districts were also found to present a prime opportunity to meet sustainability goals, which are themselves a strong driver of SECs.
Governments and communities are also using opportunities presented by electric vehicle (EV) adoption, like vehicle to grid (V2G) services, to improve SEC performance and sustainability. Found to be financially supporting these drivers are large infrastructure and climate investment packages that have been passed by numerous governments.
Barriers hampering growth
In many ways, SECs are a strong tool for governments that have set goals for improving sustainability and lessening social vulnerabilities.
In particular, they pose challenges in cost and complexity owing to unfamiliarity and lack of standardisation around installation. This is hoped to lessen as governments, vendors and grid operators become more familiar with SECs and installation methods become more standardised.
Additionally, the surrounding grid may not be robust enough to allow for the addition of new smart energy technologies that accompany such communities.
And while the public is becoming more aware of the benefits of things like home battery storage and smart meters, there may still be public pushback against SEC development over a variety of concerns, from privacy to a loss of local autonomy.