This Contributed Column is brought to you by REAL STREET Expo, a new event sponsored by Business Facilities and Facility Executive magazines. Posted by Heidi Schwartz Annual expenditures of integrated “smart” building applications, as measured by equipment supplier revenues, will grow globally by 150% by 2017, according to a report released by IHS, a global source of critical information and insight. The global market for integrated equipment in buildings is forecast to grow at an average annual rate of 20.3%—from $12.6 billion in 2012 to $31.6 billion by 2017. As a proportion of overall building equipment investment, smart applications are forecast to increase from 8% to 14% over the same period. For purposes of the report, smart building systems are deemed to be those in which the products are unified into a single system, combining and integrating different functions into one solution. Building systems integrated together can include energy management software and services, door automation equipment, intruder alarms, lighting controls, and HVAC systems, among others. “One of the key drivers for integrating systems and making buildings more intelligent is the energy efficiency savings that can be achieved,” said William Rhodes, senior market analyst, building technology, for IHS, and the author of the report entitled “Opportunities in Smart Buildings.” “While energy efficiency measures represent only one aspect of intelligent building design, their effectiveness is easily quantified and building owners can immediately see the return on their investment.” The report groups smart building investments by their level of integration, Level One being the highest. This group—in which building systems are centrally managed to drive energy and operational efficiencies—represents the fastest-growing category of smart building investment, with global supplier revenues forecast to grow at an average annual rate of 55.6% over the forecast period. By geographic region, Asia is forecast to have the highest growth rate in supplier revenues on integrated building applications, increasing from $4 billion in 2012 to $15.7 billion in 2017. The North American market will see the second-fastest growth rate, with revenues increasing from $4.7 billion to $8.9 billion. Currently, while the majority of new equipment installed in buildings remains stand-alone—non-integrated—systems, most large, newly constructed or refurbished buildings have at least a basic level of integration—and that level of integration is expected to increase. Economies of scale apply to larger buildings that create faster payback on investment than in smaller and medium-sized buildings.
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