You will be provided with a reference and some statements. Please determine whether each statement is 'supported', 'unsupported', or 'unknown' with respect to the reference. Please note:
First, assess whether the reference contains any valid content. If the reference contains no valid information, such as a 'page not found' message, then all statements should be considered 'unknown'.
If the reference is valid, for a given statement: if the facts or data it contains can be found entirely or partially within the reference, it is considered 'supported' (data accepts rounding); if all facts and data in the statement cannot be found in the reference, it is considered 'unsupported'.

You should return the result in a JSON list format, where each item in the list contains the statement's index and the judgment result, for example:
[
    {
        "idx": 1,
        "result": "supported"
    },
    {
        "idx": 2,
        "result": "unsupported"
    }
]

Below are the reference and statements:
<reference>
Residential HEMS and
controllers – global market
scan
February 2025

The Technology Collaboration Programme on Energy Efficient End-Use Equipment (4E TCP), has
been supporting governments to co-ordinate effective energy efficiency policies since 2008.
Fourteen countries and one region have joined together under the 4E TCP platform to exchange
technical and policy information focused on increasing the production and trade in efficient end-use
equipment. However, the 4E TCP is more than a forum for sharing information: it pools resources
and expertise on a wide a range of projects designed to meet the policy needs of participating
governments. Members of 4E find this an efficient use of scarce funds, which results in outcomes
that are far more comprehensive and authoritative than can be achieved by individual jurisdictions.
The 4E TCP is established under the auspices of the International Energy Agency (IEA) as a
functionally and legally autonomous body.
Current members of 4E TCP are: Australia, Austria, Canada, China, Denmark, the European
Commission, France, Japan, Korea, Netherlands, New Zealand, Switzerland, Sweden, UK and USA.
Further information on the 4E TCP is available from: www.iea-4e.org

The Efficient, Demand Flexible Networked Appliances Platform of 4E (EDNA) provides analysis and
policy guidance to members and other governments aimed at improving the energy efficiency and
demand flexibility of connected devices and networks.
Further information on EDNA is available from: www.iea-4e.org/edna

This report was commissioned by the EDNA Platform of the 4E TCP and authored by the Institute for
Sustainable Futures. The views, conclusions and recommendations are solely those of the authors
and do not state or reflect those of EDNA, the 4E TCP or its member countries.
Views, findings and publications of EDNA and the 4E TCP do not necessarily represent the views or
policies of the IEA Secretariat or its individual member countries.

EDNA: Residential HEMS and
controllers – Global Market Scan
Final Report
Prepared for the 4E Technology Collaboration Programme
of the International Energy Agency
Institute for
Sustainable Futures
February 2025

isf.uts.edu.au
RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

1

Research Team

About the authors

•

Dr Matthew Daly

•

Dr Edward Langham

•

Farzan Tahir

•

Sophie Allen

•

Dr Chris Briggs

The Institute for Sustainable Futures (ISF) is an
interdisciplinary research and consulting
organisation at the University of Technology
Sydney. ISF has been setting global benchmarks
since 1997 in helping governments, organisations,
businesses, and communities achieve change
towards sustainable futures.
For further information visit: www.isf.uts.edu.au

Citation
Daly, M., Langham, E., Tahir, F., Allen, S. and
Briggs, C. Residential HEMS and controllers –
Global Market Scan. Report prepared by the
University of Technology Sydney for the 4E
Technology Collaboration Programme of the
International Energy Agency. February 2025.

Disclaimer
The authors have used all due care and skill to ensure the material is accurate as at the date of this report. ISF and the
authors do not accept any responsibility for any loss that may arise by anyone relying upon its contents.
© UTS February 2025

Institute for Sustainable Futures
University of Technology Sydney
PO Box 123 Broadway, NSW, 2007
www.isf.uts.edu.au

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

2

Executive Summary

Executive
Summary
Background
As energy systems increasingly depend on variable renewable energy sources, integrating demand flexibility
technologies becomes crucial. Enhancing demand flexibility, including at a household level, is essential to
minimise the costs and risks associated with the transition to clean energy. Home Energy Management
Systems (HEMS) are systems that can connect to multiple residential energy devices and a communications
network to provide monitoring and control, optimising household energy storage, generation and
consumption for the benefit of the household and the broader energy system.
The functionality and use cases of HEMS vary with the maturity of the particular system, and the household
appliances integrated into the HEMS ecosystem. Customer assets connected to HEMS can include solar
PV, home batteries, EV chargers, and controllable energy loads such as hot water systems, heating/cooling
equipment (including smart thermostats), pool pumps, pool heating, and other smart appliances, lights or
plug loads controlled by smart devices. At the basic level, HEMS provides real-time monitoring of energy
consumption and production in the home, along with a level of scheduling and remote user control of
appliances. As they become more sophisticated, the HEMS systems can provide optimisation of rooftop
solar self-consumption, optimisation of financial benefit, as well as responding to external market and
network signals (Delta-EE, 2021; gridX, 2024; Strauli et al., 2022).
This research investigates the global HEMS market addressing key questions about existing products,
market penetration, product categories, interoperability, and relevant policies. The research was conducted
through extensive desktop reviews of market intelligence reports, product data, and industry documents.
Current size of the global HEMS market
Publicly available data on the global and regional HEMS market is limited. The desktop review found that
most publicly available information is predominantly in the form of high-level market intelligence reports, a
small number of market overviews available from commercial entities operating in the HEMS space, and a
limited number of academic studies. The best data currently available is on HEMS in Europe. Using a broad
definition of the HEMS market, these existing projections estimated the size of the global HEMS market to be
in the order of $4b USD annually with the expectation that this will treble by the end of the decade.
Findings from HEMS global market scan
This market scan aimed to provide insights into the state of the global HEMS product market in 2024.
Detailed information was collected and categorised for 51 HEMS to understand the types of products
available, where they are available, how they are connecting to household generation, storage and flexible
loads, and what degree of information and control they provide to householders and third parties. The lack of
specific sales data meant the analysis of the market focused on the spread of available products, without
consideration of which HEMS devices are most widely deployed.
The scan found that there is significant diversity in available HEMS products across all classification
categories (see Figure 1 for a selection of market category breakdowns). This is indicative of the diversity of
current drivers of demand flexibility in global energy markets, the strategic rationale for companies entering
the HEMS market, and the energy policy environments they must operate within. The differences in features
and design choice have important implications for their functionality, financial viability and attractiveness to
customers. Key findings include:
•

•

HEMS can be integrated in existing equipment such as battery or solar inverters or smart meters,
can be fully cloud-based (monitoring and controlling compatible appliances), but are most commonly
separate devices within the home.
About 40% of products are available globally, but most currently have a distribution confined to a
particular region.

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

3

•

Companies developing HEMS products are hugely diverse, ranging from solar PV/storage
companies to electrical original equipment manufacturers (OEMs), tech companies and energy
suppliers.

•

Interoperability with other appliances behind the meter is a critical challenge. Around 1 in 5 HEMS
products operates within a ‘closed ecosystem’ of devices of a given brand, a similar proportion use
open communication standards to increase the breadth of compatible control, but most of the market
(53%) currently rely on developing bespoke software integrations with each brand or even model of
connected hardware. Such integrations require significant time and cost, with many HEMS and
smart appliance brands duplicating work to add new connectivity. This is the focus interoperability
policy options, discussed below.

Figure 1: Proportion of products from the market scan in different product categories. Graphs show: a. installation type,
b. regions in which products are available, c. background of company with HEMS products, d. interoperability
categorisation; n=51 for all figures.

A classification framework was created to better understand the technical capabilities of HEMS products,
categorising them into four levels of sophistication:
•

•
•
•

Monitoring only: No control capability. While these devices are not considered HEMS, this category
was included for completeness, as many HEMS products are emerging out of monitoring-only
devices, and many HEMS have control capability for some appliances, but only monitoring for other
devices.
Basic: Scheduling of multiple devices.
Sophisticated: In-home optimisation, based on user-specified criteria (such as minimising energy
costs, or maximising solar self-consumption).
Orchestrated: Sophisticated plus response to dynamic external market or control signals.

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

4

Applying these classifications was challenging, as it was often unclear from the available information exactly
what degree of control would be delivered, over which devices, in which circumstances, and whether that
control was currently available to purchase, or was expected to be available soon. To manage this
challenge, the study allocated two separate functionality categorisations to each device:
•
•

Cautious: cautious or minimum stated capability based on current marketing over which there was a
degree of certainty, and
Highest stated: generous or highest potential capability as claimed in marketing or industry news
coverage. This might be higher because the company has announced additional capabilities will
soon be available, or capabilities are available when additional devices are added to the system, or
there are contradictory statements of capabilities present in the public domain.

As seen in Figure 2, when a cautious approach is applied, more than half of the devices are providing only
basic control or monitoring functionality, around a quarter provide sophisticated in-home optimisation and
only 12% can provide an orchestrated response to external market or network signals. This changes
significantly when considering the highest potential capabilities, with almost 85% of devices being classed as
sophisticated or orchestrated.

HEMS device functionality classification
60%
50%
40%
30%
20%
10%
0%
Monitoring

Basic
Cautious

Sophisticated

Orchestrated

Highest stated

Figure 2: Levels of control sophistication of HEMS devices, categorised using both a cautious and highest stated
assessment (n=51)

The difference between cautious and highest-standard interpretations of control functionality highlights the
rapid trend towards greater levels of in-home optimisation functionality, along with an increase in enabling
third-party orchestration. However, there were few, if any, HEMS devices currently available that deliver
on all the desirable use cases. This dynamic, along with the different approaches to interoperability with
household devices, makes it very challenging for customers to assess what HEMS products will work with
their equipment and how they will operate.
There appears to be some regional variation in product types and functionality. For example, North America
and Europe show more focus on the control of household loads, whereas in Australia advanced control and
optimisation of household generation and energy storage (e.g. solar, batteries) is more common.
Globally, HEMS markets are diverse, and rapidly evolving in various directions. Possible approaches to
support the development of the household demand flexibility space while ensuring customers are
appropriately protects are outline below.

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

5

HEMS Policy Issues and Options
Industry opinions are divided on whether HEMS, as in-home gateways, will emerge as the dominant model
of control of residential devices. An alternative pathway is direct integrations between OEMs of ‘major’
residential equipment (solar, batteries, hot water and heating/cooling systems) and energy industry players
(energy retailers, networks, aggregators or market operators). Policy makers will need to follow emerging
position on this issue closely to tailor their responses.
Policy options to support the functional development of the HEMS market could focus on the following areas:
Interoperability: Interoperability is critical for the successful functioning of HEMS products, both for how
these gateway devices communicate and integrate with the energy system (to respond to signals from
energy market operators, retailers or distribution networks), and for how customer outcomes are successfully
optimised behind-the-meter with a wide range of appliances. To improve interoperability and underpin a
more rapid scaling of the market and improved customer experience, a three-part solution is required:
•
•

•

Development of interoperability standard/s and technical standards regarding flexible demand
capability for critical consumer energy equipment.
Legislation to require manufacturers of HEMS and compatible appliances to adopt a particular
interoperability standard for a given market, or open protocols more generally. A key issue is that
there is not necessarily a single standard that comprehensively covers all parts of the challenge at
hand. As such, we understand that some jurisdictions are leaning away from specifying a single
standard, instead opting to mandate that open communication protocols should be used, thereby
letting the prominent standards emerge. Examples of the most prominent and emerging standards
include OpenADR, IEEE 2030.5, Matter and EEBus.
Protocol requirements and compliance testing regime to ensure that full compliance with a
claimed protocol.

Examples of voluntary smart appliance interventions are the EU Code of Conduct on energy managementrelated interoperability of Energy Smart Appliances (April 2024) and Great Britain’s PAS 1878:2021 for
Energy Smart Appliances. These encourage the design of appliances that can communicate with each other
and energy management systems, and respond to external incentive signals to modulate their energy use.
The voluntary ENERGY STAR® program in the US also includes criteria for 'connected' products, requiring
open standards for communication layers. While connectivity criteria are optional for most products, they are
mandatory for connected thermostats and smart home systems to achieve certification
Data sharing frameworks: Standardised data formats via web interfaces (Application Programming
Interfaces, or APIs) can streamline information sharing, as seen with California's Market Informed Demand
Automation Server (MIDAS), a database and API for contributing and accessing information on time-of-use,
critical peak and real-time pricing structures, carbon emissions intensity of electricity generation, and ‘Flex
Alert’ signals issued by the market operator.
Consumer protection: Ensuring consumer choice over how and for what purpose their appliances are
controlled is crucial for the acceptance of third-party management of flexible loads. It may be necessary to
consider the regulation of, or the development of principles surrounding the primacy of consumer choice
when considering third party delegation for flexible load control.
Policy makers may also have other indirect levers to stimulate the market for HEMS, or promote device
interoperability capabilities that enhance HEMS connectivity. These might include adding connectivity or
controllability requirements to eligibility criteria for government energy efficiency incentives, or working with
distribution networks on integration issues, such as dynamic connection agreements.

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

6

Contents
Executive Summary

3

Contents

7

1

Project Context

8

2

HEMS and Controllers Overview

9

2.1

History

9

2.2

Definitions

9

2.3

Benefits of HEMS

11

3

Research approach and report structure

13

4

Current market size and projections

14

4.1

5

Geographical Market Focus and Trends

Global HEMS Market Scan

14

17

5.1

Product classification framework

17

5.2

Product overview – what type of HEMS devices are available on the market?

18

5.3

Market Data - HEMS product availability

22

5.4

Interoperability and communications

24

5.5

Technical Capabilities - Classifying HEMS Functionality

27

5.6

Case Studies

32

5.7

Summary

33

6

Issues for policymakers

34

6.1

Existing smart appliance standards

34

6.2

Policy Options

35

7

References

38

8

Appendix A

40

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

7

1

Project Context

This report presents the findings of market scan of the global home energy management system (HEMS)
market undertaken for the 4E Technology Collaboration Programme (4E TCP). 4E TCP is an international
platform for collaboration between governments, providing technical analysis and policy guidance to its
members and other governments on energy efficiency and now ‘demand flexible networked appliances’.
As energy systems increasingly depend on variable renewable energy sources, integrating demand flexibility
technologies becomes crucial. Enhancing demand flexibility, including at a household level, is essential to
minimise the costs and risks associated with the transition to clean energy. Home energy management is the
monitoring and intelligent management of energy flows within a home. HEMS are devices that can provide
this intelligent management. They connect to multiple residential energy using devices and a
communications network to provide monitoring and control, potentially optimising household energy
consumption, storage and generation for the benefit of the household and the broader energy system (Ford
et al., 2017).
This project seeks to advance an understanding of the current global market for HEMS as a gateway to
customer and (potentially) third party control over residential load flexibility. The market scan covers the
types and sophistication of current product offerings, key differentiating features, the extent to which open
versus closed product ecosystems pervade the market, and emerging HEMS product policy considerations.
The data collected provides a snapshot of the current product market which can be used a comparison point
for future research. A complementary review of smart appliance standards and flexible demand markets
across several case study jurisdictions (UK, EU, Germany, California, Hawaii, Australia and New Zealand)
was simultaneously prepared by the Institute for Sustainable Futures, and can be found in an accompanying
report Product Policy Framework for Demand Side Flexibility: Case Studies. This information will aid the 4E
TCP in its role in providing analysis and clear, actionable policy guidance to members and other
governments to improve the demand flexibility of connected devices.

Ple

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

8

2

HEMS and Controllers Overview

2.1

History

The management of energy usage in the home has a long history, with strong interest emerging in the
1970’s following multiple energy crises, and the initial emergence of home solar energy systems. For many
years, this remained a niche area of interest. As recently as 2012, researchers in the space found that
‘consumers just lack the fundamental interest in spending time managing their home energy consumption’
(Asare-Bediako et al., 2012, p. 4). However, developments in recent years have seen a rapid uptake of
home energy management devices (Ford et al., 2017; Sovacool & Furszyfer Del Rio, 2020).
Early energy management systems operated using microcontrollers, with significant performance
improvements with the advent of personal computers in the 1980s (Shareef et al., 2018). Advances in
technologies such as radio frequency and ultrasonic sensors led to enhancements in functionality (Wacks,
1991). Network architecture and powerline communication were also utilised for energy management
controllers that used home computers to oversee and control appliances (Inoue et al., 2003). These
appliances were managed through a compact control interface installed between home appliances and a
network adapter, and intelligent algorithms based on game theory were integrated into energy management
schemes.
Recent advancements have led to the development of Home Energy Management Systems (HEMS) that
use real-time energy control approaches to schedule or remotely manage home appliances. The Internet of
Things (IoT) has also revolutionised this field, making it easier than ever to connect home appliances with
user-friendly apps. In colder climates, connected thermostats were one of the first such devices to become
widespread, providing householders with advanced control through a smartphone app. Other smart energy
controllers have become widespread, including smart lights, smart plugs and connected appliances. Linking
multiple controllers and devices together into smart home energy management systems allow users to
monitor and control multiple aspects of their homes remotely using IoT-enabled devices.(Chakraborty et al.,
2023) Demand response tools are also enabling appliances to participate in real-time energy control through
battery charging and photovoltaic (PV) systems (Kanakadhurga & Prabaharan, 2024). Today, HEMS offer
automatic control, connections to utilities via smart meters, improved visibility to support the reduction of
energy consumption, and the ability to better respond to time-based pricing signals to reduce customer bills.
This allows users to manage household appliances, optimise electricity use, and schedule appliances during
critical peak hours based on demand response signals (Chakraborty et al., 2023).

2.2

Definitions

Home Energy Management Systems (HEMS)
HEMS come in a variety of forms and have consequently been defined in various manners (for example
(gridX, 2024; Strauli et al., 2022; Zhou et al., 2016). In this review HEMS are defined as:
systems that can connect to multiple residential energy devices and a communications network to
provide monitoring and control, optimising household energy storage, generation and consumption for
the benefit of the household and the broader energy system.
HEMS can be separate physical devices, embedded in smart distributed energy resources, or be cloud
based. Customer assets connected to HEMS can include solar PV, home batteries, EV chargers, and
controllable energy loads such as hot water systems, heating/cooling equipment (including smart
thermostats), pool pumps, pool heating, and other smart appliances, lights or plug loads controlled by smart
devices. The general layout of such devices is shown in Figure 3.
The HEMS is used to remotely control (and often optimise) equipment operations and in-home energy flows,
to achieve specified objectives. These can include user scheduling and user prioritisation, optimisation of
rooftop solar self-consumption, optimisation of financial benefit, as well as responding to external market
signals (Delta-EE, 2021; gridX, 2024; Strauli et al., 2022).

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

9

Figure 3: Overview of home energy management system (Strauli et al., 2022)

While we have opted to use the simple definition provided above, other more complex definitions exist. For
example, the US Energy Star certification scheme specifies that a Smart Home Energy Management System
(SHEMS) – as distinct from more simple individual product controllers – must at a minimum (Energy Star,
n.d.) be accessible through a single platform interface (e.g. an app or in-home device), and provide both
information and control of at least:
•

1 connected thermostat,

•

2 connected lighting products, and

•

1 plug load controller.

This definition is quite specific to the US market, however, with its origins in smart home control. As the
market scan in Section 5 reveals, lighting and plug loads are often not a priority for HEMS devices in other
markets, as these are typically small loads that are of less consequence to household energy consumption
and bills.
Other definitions focus on the outcomes rather than the components of the system; for example, a HEMS
“autonomously monitors, manages and optimises energy flows within a home to achieve a given objective
(e.g. maximise self-sufficiency or minimise costs)” (gridX, 2024).
Controllers
A controller is a device which manages, commands and regulates the behaviour of other devices.
Some commonly used controllers include:
•

Smart thermostats: devices that optimise household efficiency by incorporating on board schedules
with customisable temperature set points. Smart thermostats can automatically adjust the heating and
cooling to maximise energy savings based on user defined schedules and real time requirements.

•

Smart lights: devices which allow users to control the lighting functionality of the household through
sensors, microprocessors, or relay/timers. While these lights do not measure power consumption, they
enable the users to monitor the status (ON/OFF) remotely. The primary use case of smart lights is to add
consumer convenience and comfort.

•

Smart plugs/switches: devices that interface between electricity source and an appliance, offering
information and control capabilities to the non-smart appliances. The smart plugs allow connected
devices to be switched on/off, with some latest models featuring dimming functionality for lighting control.

•

Smart appliances: devices that incorporate sensors and actuation capabilities to provide user control
with advanced monitoring and control capabilities. The smart appliances include smart heaters,

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

10

humidifiers, air conditioners, vents etc.). The smart appliances are connected through a portal/app,
providing the status of the appliance in use.
•

Solar diverters: a device that directs the surplus electricity generated through the solar panels to the
high load appliances such as hot water systems, heat pumps, or HVAC. Instead of sending the excess
solar to the grid, the diverter ensures that electricity is used to operate the high electricity usage
appliance, thus maximising the energy savings.

Such smart controllers commonly form part of a HEMS. Single device controllers are, alone, not considered
to be HEMS themselves, but may be integrated within HEMS control if communications and interoperability
is present. This scope of this report, and specifically the market scan in Section 5, does not include individual
device controllers in isolation.
For more information on the technical capability of single device controllers, see a large-scale review of
single-device controllers available in the US undertaken by Ford et al (2017).

2.3

Benefits of HEMS

Homes are significant energy users, with residential buildings accounting for 21% of global final energy
consumption in 2022.(IEA, 2023) The active management or optimisation of home energy usage via HEMS
thus presents a substantial opportunity to increase flexibility in electricity systems.
HEMS use cases vary with the maturity of the particular system. At the basic level, HEMS provides real-time
monitoring of energy consumption and production in the home, along with a level of scheduling and remote
user control of appliances. As they become more sophisticated, the HEMS systems can provide (Strauli et
al., 2022):
•

•

•

Energy bill optimisation
o

Maximisation of solar self-consumption: This is commonly the primary, and often largest,
focus of product offerings.

o

Tariff arbitrage: This requires the residential customer to have a cost reflective tariff, such as
demand charges or Time-of-Use (ToU) tariffs.

Energy market participation
o

Access to wholesale energy trading, for solar PV, battery, and EV exports.

o

Participation in ancillary services markets, such as through a Virtual Power Plant (VPP)
operator or other aggregator.

Provision of distribution network services
o

Examples of services include peak shaving to manage grid congestion, or voltage
management.

The benefits derived from this range of HEMS uses can accrue to the household, the energy system (and
therefore energy consumers more broadly), and the environment.
Household benefits: HEMS offer potential for reducing energy consumption by improving user visibility, and
optimisation of usage. However, the core value proposition is in increasing residential energy demand
flexibility to improve solar PV self-consumption, shift or reduce peaks in demand.
For households, this can translate into lower energy bills, although there is a need to strengthen the
evidence base on the scale of the impact that can be achieved. A small-scale trial in the UK (24 households,
two-year pilot study 2019-21, East England location) found participants saved 49% on annual energy bills
(USD495/household1) and reduced carbon emissions by 14%. There was significant variation in savings
across households, ranging from USD104–1,064 across a 12-month period. Participant households already
had solar panels and EV chargers on the properties, with smart meters and batteries added for the trial

1 Value converted from GBP based on USD-GBP exchange rate of 1 GBP = 1.23848 USD (4th Feb 2025)

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

11

(Green Energy Options, 2021). Other studies suggest smaller, but still substantial energy savings (e.g. 10%
energy cost reduction in Germany self-sufficiency optimisation study (gridX, 2024)). The impacts on energy
consumption have been found to vary widely across households (Nilsson et al., 2018), highlighting the
impacts of householder behaviour. Other large-scale research has found that often there can be significant
discrepancies between users’ expected savings and the savings that a HEMS will deliver. Given the same
study found that financial benefits and guaranteed bill reductions are dominant motivating factors for
households (in Poland, Portugal and the Netherlands), it can be important to be realistic about expectations
regarding the impact of HEMS on energy consumption.
While individual controllers can deliver energy benefits to households, more significant benefits are expected
to be achieved when multiple devices are connected and working together in a household system. For
instance, savings from programmable thermostats have been estimated at 3%, increasing to 26% for an
integrated solution with monitoring and control of appliances and heating and cooling (Ford et al., 2017).
Network and energy system benefits: The flexibility provided by HEMS can result in substantial savings in
energy system costs by reducing the required capacity (and thereby energy infrastructure investment) of
centralised energy generation and transmission and distribution networks (Kuiper, 2024b). As these lumpy
infrastructure costs are usually ultimately paid for by energy users over a long period of time, such system
benefits also accrue to households and businesses over the long-term.
While energy characteristics and associated costs will differ substantially across jurisdictions, modelling of
the Australian energy system found that flexible demand (to which HEMS can contribute) could achieve new
build cost savings for generation and storage costs ranging from AUD$ 1-8 billion (a 1.1% - 8.7% reduction
in total investment required), and consumer cost savings of between AUD$ 5-18 billion (2.4% - 12.8%) to
2042, depending on the future scenario modelled (NERA Economic Consulting, 2022). The highest benefits
were achieved in scenarios with the highest penetration of Distributed Energy Resources (DER). These
figures do not include network benefits. Separate modelling found that network costs could be reduced by
$11.3 billion through DER, including but not limited to flexible demand (Baringa Partners, 2021).
Environmental benefits: To the extent that HEMS can facilitate reduced energy consumption, this clearly
has associated environmental benefits commensurate with the carbon emissions intensity of the grid.
Perhaps less obviously, the introduction of greater levels of flexible demand in the system also supports the
increased uptake of variable renewable energy sources, enabling the transition to a low emissions energy
grid (Strauli et al., 2022). As variable renewable energy makes up a greater proportion of energy supply, the
importance and value of demand flexibility to help the system handle variable supply will increase (Briggs,
Roche, et al., 2024).

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

12

3

Research approach and report structure

This work was commissioned to explore a set of specific research questions about the global HEMS market,
including:
•

What products exist?

•

What is the market penetration of HEMS and controllers?

•

What product categories exist, and what are the advantages and disadvantages of the categories?

•

What is the extent of interoperability versus closed ecosystems?

•

What policies exist, what are current policy issues, and any recommendations?

Desktop research was undertaken to address these questions, reviewing existing market intelligence reports,
market review studies, along with detailed data collection of product information and industry documents.
The findings from the research are present in the following three main sections.
HEMS market size and projections
Section 4 reviews the size and trends in the global HEMS and controllers market, drawing largely on data
from market intelligence reporting and the (very limited) available product specific sales data and forecasts.
Global HEMS market scan
Section 5 presents data from a detailed scan of available HEMS products globally, collecting data from
product manufacturer and supplier websites and other publicly available documentation. A data collection
and classification framework was first developed, and populated with the collected information. A broad and
detailed product market scan was undertaken using logical search terms, review of peak and industry body
websites, memberships and reports, and snowballing from collected data. This continued until a saturation
point was reached after which further search efforts did not reveal additional products with sufficient publicly
available information to add to the market scan. The scan was limited to information available in English.
The focus of this market scan was Home Energy Management Systems (HEMS). The scope was therefore
focused on products that control multiple devices across the household (or be managed as part of a
household system), and provide management capabilities, in that they provide control, not just information
and monitoring. Single device controllers are widespread across world markets, with available products in
the hundreds if not thousands, and several studies already exist characterising these available products
(Ford et al., 2017).
Issues for policymakers
Section 5.7 provides a short summary of product policies relating HEMs, and emerging priority areas for
policy makers to guide or shape the development of the market. This section was not a core focus of the
work, and the research team was cognisant of avoiding overlap with prior EDNA work on communications
protocols and interoperability.

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

13

4

Current market size and projections

Available data on the global HEMS market is limited. The desktop review found that most publicly available
information is predominantly in the form of high-level market intelligence ‘summary reports’. This data is
largely provided by commercial entities that charge for access to full reporting, and in public releases do not
openly disclose the methodology underlying their data. It is also unclear if those companies have commercial
interests in presenting overly bullish or conservative outlooks. It is therefore difficult to assess the validity of
the data. Nonetheless, it provides a point of reference to understand the global HEMS market. This section
provides a summary of this existing market data, highlighting broad predictions for the growth of the HEMS
market over the coming decade.
The precise scope of products included as HEMS in this high-level market reporting is sometimes unclear,
making comparison difficult. The figures included below are most likely to include some devices that are not
the focus of this report, such as self-monitoring devices, along with smart controllers (lighting, thermostats
and HVAC controllers) as well as whole-of-home HEMS.
In 2023, multiple market insights reports valued the global HEMS market at approximately USD 3.5 - 3.6
billion. It is projected to grow substantially over the decade, reaching an estimated USD 10-12 billion by 2030
(Grand View Research, 2022; ReAnIn, 2024). Current estimates and projections for global, North American
(including Mexico), European, Asian, and the Australia/Pacific markets are summarised below.

Table 1: Summary of global and regional estimates of current and projected market size for Home Energy Management
Systems, including single device controllers and monitoring devices

Current (USD)

Predicted (USD)

Global

3.5 – 3.6 billion
(2023)

10-12 billion by 2030

(ReAnIn, 2024), (Grand
View Research, 2022)

North America

1.3 billion (2023)

4.6 billion by 2032

(Credence
2024b)

Research,

Europe

1.0 billion (2023)

3.5 billion by 2032

(Credence
2024a)

Research,

Asia

948.8
(2024)

million

1.48 billion by 2031

(Cognitive
Market
Research, 2024)

Australia/Pacific

143.2
(2024)

million

217.1by million 2028

(Statista, 2024)

4.1

Source

Geographical Market Focus and Trends

North America
North America is described as leading the global HEMS market, with the revenue share of 36% in 2023
(Grand View Research, 2022). The North American market is projected to grow from USD 1.3 billion in 2023
to approximately USD 4.6 billion by 2032, reflecting a compound annual growth rate (CAGR) of 15% from
2023 to 2032. The market is characterised by moderate to high concentration, with major players including
Vivint Smart Home, General Electric Company, and Ecobee.
Within North America, the U.S. is the largest market, accounting for around 70% of revenue, while Canada
represents approximately 20% (Credence Research, 2024b). According to consumer surveys, 60% of smart
home users (e.g., those using Amazon Alexa, Google Home, and Apple HomeKit) utilise HEMS devices to
manage energy consumption. It is estimated that 30% of homes with HEMS also incorporate renewable
energy sources, and 25% have integrated battery storage systems. As seen in the figure below, smart

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

14

thermostats are currently the largest segment of the North American market, with the proportion from
advanced central controllers (HEMS) predicted to increase (Credence Research, 2024a).

Figure 4: Size and predicted growth of the North American home energy management system market, showing
approximate breakdown by product type within the market scope (Grand View Research, 2022).

Europe and UK
Europe is the second largest HEMS market after North America, with a 2023 market size of about USD 1.0
billion.(Statista, 2024) This is expected to grow at an annual rate of 14.3% (CAGR 2024-2032), resulting in a
projected market volume of USD 3.5 billion by 2028 (Credence Research, 2024a). In terms of HEMS
devices, the European market is expected to increase from around one million households currently
equipped with a HEMS, to approximately 11 million households by 2030 (Delta-EE, 2021).
Germany is the largest market in Europe for energy management, followed by the UK. Both have a strong
focus on renewable energy and smart grid technologies (gridX, 2024). This is reflected both in current uptake
of HEMS and expected growth to 2030 (as shown in Figure 5). A survey conducted on German homeowners
revealed that 25% want to install HEMS by 2026. Major drivers for HEMS installation in Europe were the
reduction of electricity bills, maximising self-use of solar, and becoming more independent of the power
market (gridX, 2024).
Different countries across Europe are at different maturity levels in terms of adoption of HEMS projects. A
2021 analysis identified HEMS projects in the product rollout phase in Germany, HEMS pilots occurring in
Spain, the Netherlands and Switzerland, and HEMS projects in earlier preparatory stages in the UK,
Belgium, Austria and Italy (Delta-EE, 2021). By 2030, significant growth is expected across all these
markets. Expected growth ranges from a six factor increase in the already large German market, to a factor
of 20 increase in Spain (gridX, 2024).

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

15

Figure 5: Expected growth in HEMS to 2030 (Source: (gridX, 2024)

Asia
The HEMS market is currently described as being smaller than Europe and North America, valued at around
USD 950 million in 2024, but is expected to grow at a CAGR of 16.5% from 2024 to 2031, highlighting
significant market expansion over the forecast period (Cognitive Market Research, 2024).
Australia/Pacific
Market intelligence reporting estimates the Australia home energy market at USD 143.2 million in 2024. The
market is predicted to grow with a CAGR of 10.96% from 2024 to 2028, leading to a projected market
volume of USD 217.1 million by 2028 (Statista, 2024).
Summary
Overall, details of the current global and regional HEMS market sizes are scarce, with the best data currently
available for Europe. Using a broad definition of the HEMS market, then the global size is estimated to be in
the order of $4b USD annually, and is expected to treble by the end of the decade.

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

16

5

Global HEMS Market Scan

A detailed review of HEMS products was conducted for the market scan, collecting data from websites,
industry reports, and other public sources. 51 distinct HEMS products were documented across regions
including Europe, North America, Asia, and Australia. Details of the HEMS products were collected and
categorised, focusing on product details, market data, communications, and technical capabilities. The
categories are shown in Table 2. Note that sales/market penetration data is scarce, and therefore when the
analysis of this data is shown (for example, 61% of products were separate HEMS devices) is based on
percentage of the 51 devices analysed, not the percentage of products installed in households.

5.1

Product classification framework

A classification framework was created for the global market scan, to document product characteristics and
facilitate the functional categorisations of the current HEMS market. An overview is shown in Table 2. Further
explanations of each of the ‘Product characteristics’ are available in Appendix A, and full details of the
collected data is available in Attachment A – HEMS Market Scan data (Dec 24).xlsx.
Table 2: Overview of market scan data capture framework

Category (Lvl 1)

Product characteristics

Product Overview

Product and company details including description and links
Single/multi device control
Installation type
Installation complexity
Degree of cloud control
Type of control
Use case/sales pitch

Market Data

Market penetration
Regional availability
Market share
Market forecasts
Costs and pricing
Business model/Revenue stream

Technical
Capabilities

Solar PV Management
Battery Energy Storage System (BESS) management
HVAC control
Hot water system control
EV management
Generation and storage control categorisation
Load control categorisation
Cautious overall HEMS control
Highest stated overall HEMS control
Virtual Power Plant (VPP) integration

Communications

Communications – wired and wireless
Comms protocol – behind-the-meter
Interoperability categorisation
Upstream communications protocol

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

17

5.2

Product overview – what type of HEMS devices are available on the market?

This section provides an overview of HEMS products, focusing on their characteristics and availability in the
market. Products are categorised by installation type, installation complexity, and degree of cloud integration.
Each category offers insights into different dimensions and are collectively intended to build towards a more
comprehensive understanding of the HEMS market.

5.2.1

Installation location and complexity

The installation location and complexity of a HEMS product refer to how and where the device is set up,
impacting on its cost to install, functionality and integration within the household. In our framework, we
identified three categories of installation location, with the results shown in Figure 6.
•

A majority (61%) of HEMS products are installed as separate devices (i.e., independent of existing
devices such as smart meters or inverters), requiring access to power and Wi-Fi for operation and
device control.

•

Next most common, at 21%, utilised no additional hardware, as household components are controlled
remotely through cloud-based technology, enabled through common communications protocols and
connectivity.

•

A similar proportion of devices (18%) were products integrated within existing equipment, be it
either a smart meter, solar inverter, or battery system.

In terms of geography, separate devices made up a higher proportion of the available HEMS products in the
North America and Australia/Pacific regions, whilst cloud-based systems had a higher prevalence in Europe.

Cloud based (no
hardware)
21%

Separate Device
61%

Integrated in
Equipment
18%

Figure 6: Installation location (n=51)

In terms of installation complexity, HEMS products were grouped into two ‘head’ categories: those that can be
simply installed by the householder (39%), and those that require a qualified electrician for installation (57%).
Of the 57% that require a licenced electrician, we have divided these into two types:
•

Separate devices (41%), as these require a dedicated site visit – with its associated labour costs –
for the HEMS to function, and

•

Integrated products (16%) that require an electrician, but are installed with a pre-existing inverter,
battery or smart meter, so the associated labour cost may be considered to already be ‘paid for’.

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

18

Unclear
4%

Electrician
(integrated)
16%

Simple
(householder)
21%

Simple (cloud)
18%
Electrician
(separate)
41%

Figure 7: Installation Complexity (n=51)

HEMS products that are simple to install were sub-categorised as devices that can be plugged-in by the
householder without special skills or qualifications (21%), and those that are cloud-based (18%) and so
effectively rely on inbuilt communications and control in compatible appliances already with the home. Results
are shown in Figure 7.
Product examples of installation type and complexity are shown Table 3 below.
Table 3: Examples of HEMS products from the market scan in the different installation and complexity categories

Installation type

Product examples (and company name if different)

Separate devices

Voltello Link (Village Energy), Clipsal Cortex, Ember Pulse (369 Labs)

Integrated in equipment

SEMS portal (GoodWe), Enphase energy system

Integrated in smart meters

Intellihub

Cloud-based

Evergen intelligent control, Xenon (Grid X)

Installation complexity

Product examples (and company name if different)

Simple (householder)

Powersensor (Powertech Energy), GroHome system (Growatt)

Simple (cloud)

Evergen intelligent control, Xenon (Grid X)

Electrician (separate)

Clipsal Cortex, Catch Power (Catch Control)

Electrician (integrated)

Energy Active Middleware (EAM SwitchDin), Sonnen Home

Implications
The significance of installation type and complexity is that it gives us some insight into how HEMS will get
into homes, the associated costs, skills needs and householder decision-making pathways.
Separate devices are a discrete choice for households, so can be purchased independently of other (more
expensive) CER equipment such as batteries, solar or EVs. This may allow the householder to select
devices that meet the specific functionality requirements of their household, and that integrates with their
existing CER setup. These devices are often referred as the local gateway or an edge device. However,
separate devices that require an electrician for installation will generally have a higher upfront cost that
customer installed or integrated, due to the need to pay for specialised trade to install. When the installation

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

19

cost is in the order of USD 400-700 for a separate HEMS device, significant savings on energy bills are
required to generate attractive payback periods for households. A lower proportion of separate devices
appear to currently offer less advanced control as compared to many integrated HEMS products, however,
as bespoke control needs to be built for a diversity of appliance types and brands. Separate devices are
trending toward enhanced control capabilities. This is explored further in the section on Technical
Capabilities below.
Integrated HEMS functionality in smart meters, inverters and batteries can serve as a form of ‘pre-installed’
flexible demand capability, that could be unlocked by retailers and networks even if households are not
currently making use of the functionality. While technically requiring an electrician to install, the associated
labour cost is essentially already ‘paid for’ by its other primary solar, battery or metering purpose, so the
marginal cost of installation to enable HEMS functionality in the property could reasonably be considered to
be zero.
Cloud-based platforms use APIs to connect and control existing connected devices in the home, so the
upfront costs associated with physical local gateway devices and their installation are avoided. In some
cases, an additional cloud connected controller can be added to devices that don’t have inbuilt connectivity.
However, there are several potential limitations due to the reliance on stable and fast internet connectivity,
when compared with integrated or physical devices on site that are less vulnerable to communications
outages. These considerations are discussed further below, under ‘cloud integration’.
How these data points change over time (if similar scans are undertaken in future) will also reveal trends in
which types of devices are gaining greater market traction.

5.2.2

Cloud integration

Another focus area in understanding product typologies was the degree of integration or reliance on the
cloud. Specifically, where is the software or the intelligence that drives the HEMS functionality primarily
located? Understanding the degree of cloud control helps to understand device characteristics such as
control reliability, data privacy, response times, and operational costs.
In our framework, we have classified the products into two categories: ‘cloud based’ or ‘hybrid’ (which
includes local and cloud-based control). This is not always completely clear from available product
descriptions, so the information available was interpreted as accurately as possible, with some products
determined to be unclear (8%). In some cases where companies provided multiple CER products and
services, it was difficult to determine whether the HEMS service was a separate cloud-based offering or was
partially integrated into other devices. Results are shown in Figure 8.

Unclear
8%

Cloudbased
23%

Hybrid
69%

Figure 8: Types and degree of cloud control amongst products in market scan (n=51)

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

20

Hybrid devices are those that have a device located at the home that acts as a gateway, and intelligence
and control functions are embedded within the device itself, as well as communicating with cloud-based
systems. Some devices were predominantly locally based, while others had greater reliance on the cloud for
additional functionalities, data inputs, or signals provided by an external source such as retailers or network
providers. For instance, allowing retailers or third party to automatically charge your batteries based on realtime weather forecasts. While these have all been classified as hybrids, there are likely to be real differences
between different systems and the degree of operation that would continue if the cloud connection was
disrupted. Hybrid was the most common approach, with over two-thirds of devices (69%) operating this way.
A quarter (23%) of the products were predominantly cloud-based, relying on third-party cloud services for
data processing, control functions, and decision-making, enabling remote management and integration with
broader energy systems like demand response and Virtual Power Plants (VPPs).
A few examples from the framework are given in Table 4 below.
Table 4: Examples of HEMS products from the market scan in the different cloud control categories

Type and degree of control

Product examples (and company name if different)

Hybrid control

Catch Control (Catch Power), SunnyHome Manager 2.0 (SMA Australia), Ecobee,
EMMA (Huawei), Marshall (ZecoEnergy), Home Assistant (HomeAssistant.io),

Cloud-based control

Intelligent Octopus Go, DLS solution with Alice (AmpX), Evergen Intelligent control
(Evergen)

Implications
Cloud-based control allows for large-scale data collection and analysis, providing valuable insights into
energy use patterns, optimisation opportunities, and predictive analytics. As previously mentioned, it also
enables simple and cost-effective installation by avoiding the need to install a device at the home. This helps
to overcome the potentially significant cost barrier to HEMS. Cloud systems (be it either fully cloud-based or
hybrid) facilitate participation in broader energy programs, such as Virtual Power Plants (VPPs) and demand
response, by allowing third parties to adjust energy usage based on grid requirements, energy prices, or
market signals. However, complete reliance on cloud-based internet connectivity presents some limitations in
terms of speed, reliability, connectivity and security. The reliability and speed of response will be limited by a
household’s internet connection speed and operational status. There will be inherent lags in the time
between a device sending a signal to the cloud and a control response being enacted by the device, due to
factors such as latency between and in data centres and in other parts of the internet, along with the
household connection, which may limit the participation in some demand response markets. For example,
one Australian study found that wireless demand response to HVAC systems in an aged care facility were
able to respond within the six second period required for the local frequency balancing (FCAS) market 7590% of the time (i-Hub, 2022). In cases when household internet is offline, control of household devices
could be lost until the connection is restored. Cloud-based HEMS systems rely on being able to connect to
the CER devices in the home, increasing the importance of interoperability standards if looking to connect to
products outside of a particular manufacturer’s ecosystem (interoperability is discussed further, below). All
connected appliances face cybersecurity vulnerabilities and risks, with potential susceptibility to
cyberattacks, unauthorized access, or data breaches, raising concerns for both consumers and regulatory
bodies (Strategic Energy & CyberPractice.io, 2024). Cloud-based systems which store data remotely have
an additional layer of risk compared with household-based devices. Consumer trust and acceptance issues
can also arise over the risk of data privacy.
A hybrid approach shares many of the aforementioned advantages and disadvantages of separate or
integrated HEMS devices, while also benefiting from cloud-functionality, to the extent that this is integrated.
The local installation and control provides faster response times, which can be particularly beneficial for realtime energy management. Quick responses are essential for applications that require instantaneous
adjustments, such as frequency control ancillary services (FCAS) that maintain grid stability. The local device
will also typically have rules-based energy management functions onboard which are able to continue to
function and run in-home optimisation even if internet connectivity is disrupted. This reliability can provide

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

21

additional assurance to the network operator regarding expected behaviour of CER assets when there are
communications outages. Additionally, the presence of a local device may provide householders with greater
trust of the energy management processes. The hybrid approach combines the speed and reliability of local
device processing with the enhanced functionality of cloud-based features. Basic functions can run locally,
while advanced data analysis can be handled by the cloud, providing a balance between autonomy and
adaptability. However, the need for a local gateway does lead to additional costs for consumers and
manufacturers in terms of installation and commissioning, which may be a significant impediment to greater
uptake.

5.3

Market Data - HEMS product availability

This section focuses on HEMS market data, detailing the regional availability of products, the companies that
are offering HEMS products, available sales data, and the costs and business models for current HEMS.

5.3.1

Regional distribution and company origins

North
America only
11%

Asia
only
4%

Global
39%
Europe only
26%

Australia/Pacific
only
20%

Figure 9: Geographic availability of products (n=51)

Our study examined the HEMS product availability across regions, based on the company website. This
gives a better understanding of the level of activity in the HEMS market across different regions. The findings
are summarised in Figure 9. This shows that a large proportion of the HEMS products collected in the market
scan are available globally (39%). The global category means that a product was available in three or more
regions. Overall, 50% of products are accessible in North America, while 65% are available in Europe,
demonstrating significant regional distribution in these areas. Asia is likely a larger market than our data
reflects, with language limitations restricting data collection. Australia, with its high renewable energy
penetration, has seen significant activity in this space, contributing to the large number of products available
in a region with a small population. Both Europe and Australia/Pacific had a significant number of devices only
available in their region, 26% and 20% respectively. This may indicate a greater prevalence of smaller startup companies entering the HEMs space in these regions, which have not yet expanded into other markets.
Figure 10 provides an overview of the data on the backgrounds of companies that are offering HEMS
products from the market scan. It shows that companies entering the HEMS market come from a diversity of
industries—many from electrical equipment manufacturing (29%), technology companies (28%), or the solar
and energy storage sectors (28%).

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

22

Aggregator
4%

Tech Company
28%

Electrical OEM
29%

PV/Storage Specialist
28%

Other
4%

Energy
Supplier/Retailer
7%

Figure 10 Company background of those active in HEMS market (n=51)

5.3.2

Costs and Sales

The cost to buy and install a HEMS device was difficult to determine from the market scan. Few products
provided clear pricing on their publicly facing information. Where possible, this study collected information on
the pricing approach: that is, did the product have an upfront cost, an ongoing subscription fee for service, or
a combination. In some cases, pricing was partially available and was collected. Some indication of pricing
approach was available for two-thirds (65%) of products, with most charging an upfront fee. Upfront costs
can influence the affordability of HEMS solutions for different customer segments. A higher installation cost
may be a barrier for some users, particularly in residential markets or smaller businesses. Of those products
that provided some pricing indication, roughly one quarter (24%) had an ongoing service or subscription. In
some cases, this provided additional services, whilst for others this was part of the standard offering.
When available, the cost of HEMS products varied. Some HEMS products are free when bought with other
products (such as battery or smart inverter). Some products range from USD150-400, while others are priced
at USD800 or above.
Market trends and sales data helps track the popularity of HEMS products, offering insights into consumer
preferences and technology adaption trends. This also helps guide the manufacturers, and technology
developers to understand the market and outlook for the emerging markets.
From our research, public data on HEMS sales or installations is limited. However, this research broadly
suggests that successfully implemented HEMS products are in the range of hundreds of thousands to
millions globally, with expectations of significant growth.
In Europe, there are currently fewer than 500,000 HEMS installed, with predictions suggesting an 11-fold
increase by 2030. Germany is estimated to have 200,000 installed HEMS, expected to grow to 2 million by
2030 (Delta-EE, 2021; gridX, 2024). In Australia, company estimates from the market scan indicate that
Evergen Intelligent control units are installed in more than 10,000 homes, while 25,000 Catch Power units
have been sold, though these are likely primarily used for hot water system control only.

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

23

5.4

Interoperability and communications

This section explores the approaches HEMS products are using to connect with other devices behind the
meter, and how these impact on interoperability between the household CER devices and the HEMS.

5.4.1

Connectivity

Connectivity in HEMS refers to how the device communicates with household devices behind the meter. This
can either be wired, wireless, or a combination. This data is important because it impacts compatibility with
other devices, network reliability, and help identify potential limitations in connectivity. In the framework, the
devices are categorised into three predominant wireless modes (Zigbee, Wi-Fi, or 4G/5G) and wired
connectivity (either power line comms or wired Ethernet), with prevalence of each summarised in Figure 11.
•

Wi-Fi connectivity allows wireless networking, with devices connecting to the internet or
communicating with each other without physical cables. This was the most common approach, with
over half of HEMS products (54%) using Wi-Fi.

•

About one-fifth (21%) of the products used wired communications, connecting to other devices
either through a Local Area Network (LAN) typically using ethernet cabling or the household wiring,
providing high-speed, reliable communication between devices in close proximity.

•

14% of products used 4G/5G cellular network technologies, which provide high-speed wireless
internet access over a broader area than LAN or Wi-Fi.

•

Finally, Zigbee is a low-power, wireless communication protocol commonly used for connecting
smart home devices and Internet of Things (IoT) applications. This is better suited to thermostats
and lighting, rather than heavy loads such as heat pumps and HVAC, and was used by 11% of
devices.

Table 5: Examples of HEMS products from the market scan in the different connectivity categories

Connectivity type

Product examples (and company name if different)

Wi-Fi

Ember Pulse (369 Labs), GroHome system (GroWatt)

Wired/Ethernet

Marshall (Zeco Energy), Sonnen Home

4G/5G

Clipsal Cortex, Sunny Home Manager 2.0 (SMA Australia)

Zigbee

Vue Home energy monitor (Emporia), SeeZero (Geo)

Zigbee
11%

Wired
connection
21%

4G/5G
14%

Wifi
54%

Figure 11: Connectivity (n=51)

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

24

Implications
Wi-Fi, which is widely used connectivity method, also adds an additional failure point in the system as it relies
on a stable internet connection, which can be affected by network issues. Ideally, a backup connection is
recommended to ensure continuous operation in case of Wi-Fi disruptions.
4G/5G connectivity provides a robust connection with wider coverage and fast speeds, which supports remote
monitoring and control even outside the home. However, it may incur ongoing data and connection costs.
Wired connection offers high reliability and consistent speeds, as it is less susceptible to interference or signal
loss. This stability is ideal for critical devices requiring constant connectivity. However, wired connections can
limit device placement due to the need for physical cabling and may require more complex installation, which
can increase setup time and cost.
Zigbee, which is known for low power consumption and extended range through mesh networking, is effective
for connecting many small, battery-operated smart devices within the home. However, it may require a
dedicated hub to communicate with devices on other networks (like Wi-Fi or cellular), and it can face limitations
in environments with heavy interference from other wireless devices.

5.4.2

Interoperability

Interoperability refers to the ability of the HEMS to seamlessly connect and communicate with other smart
devices (such as solar panels, HVAC systems, batteries, and smart meters) within the home to function
cohesively. Better interoperability enables HEMS to connect and coordinate with a larger and more diverse
range of devices, regardless of manufacturer, resulting in enhanced consumer choice, control, unified data
management, and optimised energy use. There are three main approaches to the communications protocols
for customer energy assets:
•

The first is open standards based protocols such as Matter or SunSpec Modbus, allowing broad
compatibility with different devices and manufacturers. This approach promotes interoperability by
using widely accepted standards. 21% of products in the market scan claimed to be using open
standards.

•

The second consists of private protocols that are openly published for third-party use to interface
with customer assets. This was termed bespoke integration, as integration requires specific
customisation efforts to design and implement connections with other devices, making it more
flexible than a closed ecosystem but requiring tailored development for each integration. This was by
far the most commonly encounter approach, with over half of devices (53%) operating in this space.

•

The third type – closed ecosystems – using a proprietary communication protocol layer to limit
interoperability only to compatible products. 18% of products were classified as closed ecosystems.
In this setup, some brands may limit third-party functionality to certain uses (VPP integration) and
may not support broader applications like full home energy optimisation outside of the proprietary
brand.

Some product examples from the market scan are given in Table 6, with spread of products graphed in
Figure 12.
Table 6: Examples of products in the different interoperability categories.

Interoperability

Product Example (and company name if different)

Open-standards integration

Xenon (grid X), Home Assistant, Heartbeat (1KOMMA5)

Bespoke integration

Clipsal Cortex, Evergen Intelligent control, DLS solution (AmpX)

Closed ecosystem

SolarEdge energy hub, Powerwall (Tesla), The Ferroamp system

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

25

Figure 12: Product classification by approach to interoperability (n=51)

Implications
Closed ecosystems (proprietary solutions) can make it easier for a company to provide a smooth, wellintegrated experience for a household by relying on a single supplier, ensuring consistent performance and
ease of use. The drawback is that this relies on the customer CER products within that ecosystem, limiting
customer choice and flexibility, as users are generally restricted to products within the same ecosystem,
potentially leading to technology lock-in. Further implications are restrictions on the ability to optimise with
other devices, along with potential inability to participate in VPPs and other programs to earn revenue.
Unsurprisingly, this approach is commonly encountered when HEMS services are integrated in other CER
products (see Figure 13).
Integration using open standards is generally seen as the preferable approach. It makes it easier for HEMS
devices to connect and control the widest range of CER devices, which expands consumer choice and
encourages competition and innovation within the energy market. It also makes it easier for consumers to
change or upgrade household appliances or HEMS with a wider range of options, not needing to worry about
compatibility. To achieve its full benefits, however, open connectivity requires compliance with supporting
protocols, regulations, and testing to demonstrate reliability and compatibility across devices. A current
challenge is that currently there is no clear, single, fully comprehensive and universally accepted protocol, as
discussed in Section 5.7.
Bespoke integration is essentially the current working solution to the lack of widespread interoperability
standards. It provides a route to integrate and retrofit with existing systems, making it adaptable to various
setups and brands. However, the integration process is commonly slow and resource-intensive, which
increases costs and reduce operational efficiency. This presents a barrier to the entry of new participants on
the market, as well as a significant ongoing workload for current HEMS providers to maintain operable
integrations with the changing CER market. The large proportion of devices using a bespoke approach
means that different combinations of brands of household appliances will be managed differently by different
HEMS products, meaning there is a significant degree of fragmentation in the market. This also presents a
challenge for consumers to understand which device would manage their household energy demand most
comprehensively.

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

26

Separate Device

15

Integrated in Equipment

5

Cloud based (no hardware)

4

8

4

6

0%

10%

Bespoke integration

20%

4

30%

1

40%

Closed ecosystem

50%

60%

1

2

70%

Open standards

80%

0

1

90%

100%

Unsure

Figure 13: Prevalence of interoperability classifications by device installation type (Value in bar shows device count per
category) (n=51)

5.5

Technical Capabilities - Classifying HEMS Functionality

Previous Classifications
There is no universally accepted way to classify HEMS functionality. A common approach is to consider the
number of assets being coordinated (Delta-EE, 2021). This market scan focused on devices that worked
across multiple assets, rather than single devices, to make it a ‘Home’ device.
Another key consideration is the type of use cases or value streams that HEMS can unlock for households.
Potential value streams were detailed above, but can include energy bill optimisation, energy market
participation, and the provision of network services to the grid operators. The value streams unlocked by a
HEMS can be another means of classification, for example considering where household devices are being
optimised for one value stream, or multiple streams, and if both ‘home’ values, and ‘electricity system’
priorities are being optimised for in a coordinated manner (Delta-EE, 2021).
Classification Framework: Levels of Sophistication
Drawing on elements of the above approaches, the classification approach taken in this review is to classify
the ‘level of sophistication’ of HEMS devices according to three levels: basic, sophisticated or orchestrated.
Monitoring or single device timers were not technically considered ‘HEMS devices’ but are also defined in

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

27

Table 7. In reality, many products included in the scan didn’t clearly demonstrate current capabilities other
than monitoring. However, as they labelled themselves as HEMS products, they were included in the data
collection.

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

28

Table 7: Classification of levels of sophistication of HEMS devices

Sophistication

Summary

Description

Monitoring
only

Monitoring (and
physical single device
timers) only

Visibility of energy consumption but no control, or simple physical timerbased controls on a single device.

Basic

Scheduling of multiple
devices

The HEMS allows the user to schedule the operation of multiple
connected devices, according to known factors such as TOU tariffs, and
anticipated user behaviours. It does not ‘optimise’ for the user, based on
real-time solar or other operational device data.

Sophisticated

In-home optimisation,
based on userspecified criteria

The HEMS optimises the operation of multiple connected devices based
on live solar/battery/EV status or energy usage data, interactive with predefined TOU or other electricity pricing structures.

Orchestrated

Sophisticated +
response to dynamic
external market or
control signals.

In addition to ‘sophisticated’, the HEMS optimisation can curtail, divert or
activate available behind-the-meter resources according to dynamic
market signals received from a network, retailer or other third party (e.g.
aggregators).

The decision-making pathway for applying this classification is shown in Figure 14.

Figure 14: Decision tree for determining HEMS sophistication classification

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

29

HEMS functionality
The classification framework in

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

30

Table 7 was used to assess the level of sophistication across all the HEMS devices categorised in the
market scan. This proved to be a challenging task, as it was often unclear from the available information
exactly what degree of control would be delivered, over which devices, and in which circumstances, and
whether that control was currently available to purchase, or was expected to be available soon. This is
reflective of the rapidly changing market both in terms of devices available, as well as the range of
household appliances devices can effectively integrate with. To manage this challenge, the study allocated
two separate functionality categorisations to each device:
•

Cautious: cautious or minimum stated capability based on current marketing over which there was a
degree of certainty, and

•

Highest stated: generous or highest potential capability as claimed in marketing or industry news
coverage. This might be higher because the company has announced additional capabilities will
soon be available, or capabilities are available when additional devices are added to the system, or
there are contradictory statements of capabilities present in the public domain.

The proportion of HEMS that were categorised within each level of sophistication, for both minimum and
highest stated, are shown in Figure 15. This shows that when a cautious approach is applied, most devices
are providing only basic control (30%) or monitoring (34%) functionality, with one-quarter providing
sophisticated in-home optimisation (24%) and a small number capable of providing an orchestrated
response to external market or network signals (12%).
This changes significantly when considering the highest potential capabilities. Less than a quarter of devices
only provide monitoring (6%) or basic (10%) functionality, with the majority providing sophisticated control
(51%) and one-third capable of some level of orchestration (33%).

HEMS device functionality classification
60%
50%
40%
30%

20%
10%
0%
Monitoring

Basic
Cautious

Sophisticated

Orchestrated

Highest stated

Figure 15: Levels of control sophistication of HEMS devices, categorised using both a cautious and highest stated
assessment (n=51)

The scope of ambiguity within the classification of the HEMS devices is represented in Figure 15, showing
the spread of HEMS sophistication and the associated uncertainty. Dark blue dots represent a cautious
assessment of capabilities. Light blue dots indicate the highest stated capabilities. The analysis is also split
between device location, to see how the uncertainty is spread across this categorisation.
Factors contributing to this uncertainty include planned capabilities which are not yet available, inconsistent
technical descriptions of the products, the reliance of some products on additional hardware to achieve their
stated functionality, or higher levels of control only available for a limited scope of household appliances (e.g.
EV chargers only). The majority of devices within the scan indicated a degree of uncertainty, as reflected in

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

31

Figure 16. The most common changes were from devices categorised as monitoring or basic, to
sophisticated, though there are examples of all the permutations of increasing control.
This disparity between classifications highlights both the rapidly evolving nature of the HEMS market, the
near-term functional potential of HEMS, and the challenges in evaluating their capabilities both for
householders and policy or industry stakeholders.

Figure 16: HEMS sophistication spread and uncertainty

HEMS functionality by region and device type
Additional analysis was undertaken to look for patterns in the functionality of HEMS products available in
different regions, or in different device installation types. In both cases, the cautious approach to categorising
the HEMS was used. The analysis of sophistication by region (Figure 17) that most devices available in
every region offer only either monitoring or basic control features, except in the Australia/Pacific.
Orchestrated control products were available in the Australia/Pacific, and Europe, with only globally available
products currently providing orchestration in Asia and North America.

Globally available (n=21)

8

7

Europe only (n=12)

6

Australia/ Pacific only (n=10)

2

North America only (n=6)

3
2

2

3
4

1

1
2

4

Asia only (n=2)

3

1

2
0%

10%

Monitoring

20%
Basic

30%

40%

50%

Sophisticated

60%

70%

80%

90%

100%

Orchestrated

Figure 17 Sophistication of HEMS devices by region (value in bar shows device count per category) (n=51)

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

32

Figure 18 below illustrates the sophistication the HEMS devices by installation type. This shows that
separate devices predominantly offer basic control, with only a few providing sophisticated control
capabilities, and just one device achieving orchestrated control. In contrast, cloud-based devices exhibit a
higher level of sophistication, delivering more sophisticated and orchestrated control, although fewer cloudbased devices were reviewed compared to standalone ones (less availability). Devices integrated into
equipment, on the other hand, showed a split between either focusing on monitoring functionalities, or more
advanced (sophisticated or orchestrated) control.

Separate Device (n=31)

8

14

Integrated in Equipment (n=9)

8

5

Cloud based (no hardware) (n=11)

4
0%

10%

Monitoring

20%
Basic

3

1
30%

1

40%

Sophisticated

2
50%

1

4
60%

70%

80%

90%

100%

Orchestrated

Figure 18 Sophistication of HEMS devices by installation type (value in bar shows device count per category) (n=51)

Table 8 below provides a high-level summary of the HEMS data classification framework for four case study
products. It compares a separate device, a smart meter-integrated device, a CER-integrated device and a
cloud-based device.

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

33

5.6

Case Studies
Village Energy (Voltello)

Intellihub

Alpha Cloud (Alpha ESS)

DLS solution with ALICE
(AmpX)

Company background

Tech Company

Tech Company

PV/Storage Specialist

Tech Company

Installation type

Separate Device

Integrated in Equipment
(smart meter)

Integrated in Equipment (Battery)

Cloud based (no hardware)

Type of control

Hybrid

Hybrid (Partnership with VPP
provider)

Hybrid

Cloud based (no hardware)

Availability

Australia only

Australia only

Global

Global

Generation and storage
capabilities
Load capabilities

Sophisticated

Orchestrated

Orchestrated for BESS

Basic

Sophisticated with additional
hardware
Sophisticated

N/A

Orchestrated for EVs

Sophisticated

Orchestrated

Sophisticated

Basic

Orchestrated

Orchestrated

Orchestrated

Sophisticated

Trialled third party control
curtailing solar export at
negative price
Bespoke Integration

Only provides CER
functionality

Orchestrated control for EVs and BESS if
connected to the AlphaESS batteries

Bespoke integration

Open source for monitoring and closed
ecosystem for sophisticated use of battery

Description

Cautious overall HEMS
control
Highest stated overall HEMS
control
Notes on classification
Interoperability
categorisation

Bespoke Integration

Table 8: Case studies of HEMS device data collection framework

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

34

5.7

Summary

This market scan aimed to provide insights into the state of the global HEMS product market in 2024.
Detailed information was collected and categorised for 51 devices, to understand the types of products
available, where they are available, how they are connecting to household generation, storage and flexible
loads, and what degree of information and control they provide to householders and third parties. The lack of
specific sales data meant the analysis of the market focused on the spread of available products, without
consideration of which HEMS devices are most widely used. While this data would be very useful, it is likely
to be difficult to obtain unless the registration of HEMS devices becomes widely required by regulators.
The scan found that there is significant diversity in available HEMS products. This is evident across all
classification categories, from physical design of products and how they are installed, to the types of
companies that are offering HEMS products, the business models underlying HEMS devices, and the control
functionalities provided. The diversity of different design choices is representative of the trade-offs that
HEMS providers need to consider in their products, with clear advantages and disadvantages for many of
these trade-offs.
It is difficult to identify trends when conducting a scan at a single point in time, however it was obvious that
the market is evolving rapidly. It was not uncommon to encounter examples of devices used and reported on
from trials a few years ago, or discussed in the literature, that are either no longer available, or have
substantively changed the type of device they now sell. The difference noted between cautious and
optimistic interpretations of control functionality highlighted the trend towards greater levels of in-home
optimisation functionality, along with an increase in enabling third-party orchestration. However, there were
few – if any – devices available that deliver on all of the desirable use cases (as outlined in Section 2). This
dynamic, along with the different approaches to interoperability with household load and CER devices,
makes it very challenging for customers to assess what HEMS products will work with their equipment and
yield the desired functionality.
There appears to be some regional variation in product types and functionality. For example, North America
and Europe show more advanced control of loads, whereas in Australia advanced control and optimisation of
household generation and energy storage (e.g. solar, batteries) is more common.
Globally, the HEMS market is clearly fragmented, diverse, and rapidly evolving in various directions. The
final section of this report considers the policy landscape relevant to HEMS, and reflect on approaches to
support the development of beneficial functionality better customer outcomes.

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

35

6

Issues for policymakers

6.1

Existing smart appliance standards

This is not a comprehensive review of smart appliance standards that may carry relevance for HEMS, but
rather a listing of relevant standards that the research team encountered during the market scan in major
markets of the EU, UK and US. A complementary review of smart appliance standards and flexible demand
markets across several case study jurisdictions (UK, EU, Germany, California, Hawaii, Australia and New
Zealand) can be found in an accompanying report.
European Union
The Code of Conduct on energy management-related interoperability of Energy Smart Appliances was
launched in April 2024 (European Commission, 2024). It promotes energy efficiency and interoperability
among devices by encouraging manufacturers to design appliances that can communicate with each other
and with energy management systems. It includes an agreement by product manufacturer signatories to
make all reasonable efforts to ‘Ensure the implementation of interoperability profiles based on standardised
open Application Programming Interface / open communication protocol’. The Code of Conduct covers the
following electrical appliances that have an energy label:
•

White goods: washing machines, tumble driers, washer-driers, dishwashers, and

•

Heating, ventilation and air conditioning (HVAC), including water heating.

The preparation for the second phase of the Code of Conduct has started to include energy management

systems (EMS), photovoltaic inverters and electric vehicle chargers.
United Kingdom
Under the Smart Systems and Flexibility Plan 2021, Great Britain has funded the development of a voluntary
standard PAS 1878:2021 for Energy Smart Appliances (ESAs) that “are electrical consumer devices that are
communications-enabled and capable of responding automatically to incentive signals (such as price) or
other more direct control signals (such as specific instruction to operate at a given power at a certain time of
day), by shifting or modulating their electricity consumption, storage, and/or production” (BSI, 2021). More
detailed than the EU code of conduct, this standard was launched before development of the EU Code of
Conduct commenced.
United States
The voluntary ENERGY STAR® program2 for efficient appliances (which includes criteria for ‘connected’
products, including air conditioners) 3 has operated for several decades. Under the Energy Star program, the
criteria stipulate that open standards shall be used for all communication layers. Meeting connected criteria
is optional for all products where connectivity is not the primary driver of energy performance. However, it is
required for connected thermostats and smart home systems to achieve ENERGY STAR certification.

2 https://www.energystar.gov/

3 https://www.energystar.gov/sites/default/files/ENERGY STAR Version 4.0 Room Air Conditioners Program

Requirements.pdf
RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

36

6.2

Policy Options

Industry opinions are divided on whether HEMS, as in-home gateways, will emerge as the dominant model
of control of residential devices. An alternative pathway is direct integrations between OEMs of ‘major’
residential equipment (solar, batteries, hot water and heating/cooling systems) and energy industry players
(energy retailers, networks, aggregators or market operators). Policy makers will need to closely follow
emerging positions on this issue to tailor their responses. There are also active debates about the level of
specificity and centralised control that national regulators and legislators should take in a fast-moving
technological landscape in which business models are still forming.
Policy to aid the development of HEMS product markets and their functional application can include the
development of interoperability and data sharing standards, product regulations, supporting processes such
as compliance checks, legislation of consumer protection, or connectivity standards tied to incentives. These
policy options are briefly discussed below.
Interoperability
Interoperability is critical for the successful functioning of HEMS products, both for how these gateway
devices communicate and integrate with the energy system (to respond to external signals from energy
market operators, retailers or distribution networks), and for how customer outcomes are successfully
optimised behind-the-meter with a wide range of appliances. If all devices are using different communication
protocols, only a fraction of flexible loads may be accessible for grid services and HEMS providers will
require bespoke integrations to communicate with and control each device type. The latter results in
expensive and time-consuming software coding being undertaken in parallel by numerous appliance and
HEMS device manufacturers. It can also make it more difficult for new innovators to enter the market, once
others technology suppliers have established integration and hold market share. From a customer
perspective, the absence of interoperability constrains customer choice, given a very small subset of devices
may be compatible with their existing equipment. Customer access to behind the meter orchestration is also
reduced. To improve interoperability and underpin a more rapid scaling of the market and improved
customer experience, a three-part solution is required:
1. Development of interoperability standard/s and technical standards regarding flexible demand
capability for critical consumer energy equipment, such as heating/cooling equipment, inverters and
hot water systems. An example is Great Britain’s voluntary PAS 1878:2021 for Energy smart
appliances, discussed above.
2. Legislation to require manufacturers of HEMS and compatible appliances to adopt a particular
interoperability standard for a given market, or open protocols more generally. A key issue is that
there is currently no single interoperability standard that comprehensively covers all parts of the
challenge at hand. This makes it difficult for policy makers and regulators to dictate a universally
appliable standard. As such, we understand that some jurisdictions are leaning away from specifying
a single standard, instead opting to mandate that open communication protocols should be used,
thereby letting the prominent standards emerge. Government support to accelerate standard
development may also be warranted. Some examples of relevant standards include:
a. OpenADR: Perhaps the most universal standard available, OpenADR is a “two-way
information exchange model and global Smart Grid standard”.4 OpenADR is selected in PAS
1878:2021, and recognised by the International Electrotechnical Commission as standard
IEC 62746-10-1 ED1.
b. IEEE 2030.5: Commonly used communication standard between smart grids and
consumers. The standard has been recommended as a default protocol for smart inverters
communication for in California’s Rule 21.5

4 https://www.openadr.org/

5 https://standards.ieee.org/ieee/2030.5/5897/

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

37

c.

Matter: An open-source connectivity standard developed for the integration of smart
appliances, mobile applications and cloud services. Compliance with the standard is
governed by a commercial party. 6

d. EEBus: an open-source standard that facilitates communication between energy devices,
regardless of their manufacturers or underlying technologies. Compliance with the standard
is governed by a commercial party. 7
These standards are designed to establish common protocols to ensure seamless interoperability of
smart home devices with the existing smart appliances. HEMS manufacturers need to ensure that
the devices are compatible with these standards to enhance smooth communication and widespread
adaption of smart home devices globally.
3. Protocol requirements and compliance testing regime: Current experience of Australian HEMS
developers suggests that claimed compliance of appliance manufacturers with interoperability
protocols is commonly only partial, with effective interoperability standards also requiring clear
protocol requirements (e.g. register mapping) as well as testing and verification required to ensure
compliance(Briggs, Langham, et al., 2024).
Data sharing frameworks
Consistency in data sharing formats via web interfaces (Application Programming Interfaces, or APIs)
can streamline information sharing. These may be integrated or separate from technical appliance or
interoperability standards. As an example, the California Energy Commission has developed the Market
Informed Demand Automation Server (MIDAS), a database and API for contributing and accessing
information on time-of-use, critical peak and real-time pricing structures, carbon emissions intensity of
electricity generation, and ‘Flex Alert’ signals issued by the California Independent Operator. It is hoped
that product developers will harness such frameworks for communication and coordination.
Consumer protection
While the orchestration of multiple smart or flexible capabilities unlocks the best network and system
benefits, consumer buy-in is crucial for acceptance of third-party control. A range of consumer protection
issues may be encountered in relating to HEMS. For example, it may be necessary to consider the
regulation of, or the development of principles surrounding the primacy of consumer choice when
considering third party delegation for flexible load control. Such an approach may be necessary to
prevent products being developed that extract value for third parties, with limited transparency or control
of the household, which could erode trust in flexible demand mechanisms and limit uptake. Furthermore,
there are many parties involved household participation in demand flexibility (such as retailers,
aggregators, equipment manufacturers and HEMS providers), so careful consideration will be required
as to who is responsible when issues arise, and how consumer protections are embedded.
Indirect mechanisms
While not directly related to HEMS, policy makers may have other indirect levers that can be used to
stimulate the market for HEMS and demand flexibility, or promote device interoperability capabilities that
enhance HEMS connectivity. These may include:
•

6

Incentives: Many governments promote the uptake of energy efficient appliances through
mechanisms such as white certificate schemes, which can be used to stimulate the uptake of
voluntary product standards or features.8 For example, in Australia, the Victorian white certificate
scheme recently amended the eligibility for rebates to require hot water systems to have a timer to
enable flexibility, and recommends the inclusion of an open communication protocol.(Kuiper, 2024a)
Jurisdictions within the US have tied incentives under the Home Electrification and Appliance

https://csa-iot.org/all-solutions/matter/

7 https://www.eebus.org/what-is-eebus/
8 For example; Spain -

https://www.iea.org/policies/1621-energy-efficiency-obligation, France https://www.iea.org/policies/1854-white-certificate-scheme-obligation, Australia (NSW) https://www.iea.org/policies/1110-nsw-energy-savings-scheme
RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

38

Rebates Program (part of the recent Inflation Reduction Act initiatives) 9 to ENERGY STAR
certification, which carries connectivity standards for certain types of connected appliances (as
mentioned earlier in this section). Thus, without mandating, governments can use pre-existing
incentives to encourage smart appliance standards for many products entering the market.
•

Distribution network integration: First developed in South Australia and being rolled out in other
Australian distribution networks, operators are implementing dynamic network connection
agreements. These have initially focussed on ‘flexible export’ (AER, 2022) arrangements to allow
larger solar connections but ramp down exports for short periods when the network is congested, or
the market is oversupplied. While flexible exports are of limited relevance to HEMS, some network
operators are looking to extend the flexibility approach to connection agreements for the importing of
power. Such dynamic connection agreements may become standard practice for how customer
connections for EV charging are managed to avoid exacerbating peak loads. This dynamic
connection agreement approach (which involves a combination of a new customer connection
policies, and mandates for customer devices to be compatible with dynamic signalling) may
stimulate the market for ‘gateways’ behind which the customer must control and optimise their
usage. Normalisation of this type of network connection arrangement could drive demand in the
HEMS market.

9 Such as Hawaii, see: https://governor.hawaii.gov/main/lowering-costs-for-working-class-families-the-home-

electrification-and-appliance-rebates-hear-program/
RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

39

7

References

AER. (2022). Flexible Export Limits: Issues Paper. Australian Energy Regulator.
https://www.aer.gov.au/system/files/Flexible%20Exports%20-%20final%20Issues%20Paper_0.pdf
Asare-Bediako, B., Kling, W. L., & Ribeiro, P. F. (2012). Home energy management systems: Evolution,
trends and frameworks. 2012 47th International Universities Power Engineering Conference (UPEC),
1–5. https://doi.org/10.1109/UPEC.2012.6398441
Baringa Partners. (2021). Potential Network Benefits from more efficient DER Integration.
https://www.datocms-assets. com/32572/1629948077-baringaesbpublishablereportconsolidatedfinal-reportv5-0.pdf
Briggs, C., Langham, E., & Daly, M. (2024). Energy Masters: Lessons Learnt Report 1. Prepared for the
Australian Renewable Energy Agency and RACE for 2030. https://arena.gov.au/knowledge-bank/sapower-networks-south-australia-electrification-and-demand-flexibility-energy-masters-lessons-learntreport-1/
Briggs, C., Roche, D., & Ibrahim, I. (2024). Flexible Demand – the Current State of Play in Australia. Institute
for Sustainable Futures, UTS. Report prepared for ARENA.
BSI. (2021). PAS 1878:2021—Energy Smart Appliances—System Functionality and Architecture [PAS].
https://www.bsigroup.com/en-GB/insights-and-media/insights/brochures/pas-1878-energy-smartappliances-system-functionality-and-architecture/
Chakraborty, A., Islam, M., Shahriyar, F., Islam, S., Zaman, H. U., & Hasan, M. (2023). Smart Home System:
A Comprehensive Review. Journal of Electrical and Computer Engineering, 2023, 1–30.
https://doi.org/10.1155/2023/7616683
Cognitive Market Research. (2024). Asia Pacific Home Energy Management System Market Report 2024.
https://www.cognitivemarketresearch.com/regional-analysis/asia-pacific-home-energy-managementsystem-market-report
Credence Research. (2024a). Europe Home Energy Management System Market.
https://www.credenceresearch.com/report/europe-home-energy-management-system-market
Credence Research. (2024b). North America Home Energy Management System Market Size & Forecast
2032. https://www.credenceresearch.com/report/north-america-home-energy-management-systemmarket
Delta-EE. (2021). HEMS in Europe: Solutions from the UK and Germany and perspectives on the future.
https://uploadsssl.webflow.com/5f5a3cd758ea5e66b144bf43/6192993169f6868337b80d55_gridSession%20%20HEMS%20in%20Europe.pdf
Energy Star. (n.d.). Smart Home Energy Management Systems Key Product Criteria.
https://www.energystar.gov/products/shems_key_product_criteria [Accessed July 2024]
European Commission. (2024). Code of Conduct on energy management related interoperability of Energy
Smart Appliances (V.1.0). JRC Smart Electricity Systems.
https://ses.jrc.ec.europa.eu/sites/default/files/inlinefiles/code_of_conduct_on_energy_management_related_interoperability_of_energy_smart_applianc
es_v.1.0.pdf
Ford, R., Pritoni, M., Sanguinetti, A., & Karlin, B. (2017). Categories and functionality of smart home
technology for energy management. Building and Environment, 123, 543–554.
https://doi.org/10.1016/j.buildenv.2017.07.020
Grand View Research. (2022). Market Analysis Report—Home Energy Management System Market.
https://www.grandviewresearch.com/industry-analysis/smart-home-energy-management
Green Energy Options. (2021, September). Geo’s Whole Home Optimisation trial shows dramatic energy
and carbon savings potential of smart rollout. [Online]. Available: https:// geotogether.com/homeoptimisation-trial/. [Accessed 2024].
RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

40

gridX. (2024). HEMS: Home Energy Management Systems. https://www.gridx.ai/resources/hems-report2024 [Accessed 4 July 2024]
IEA. (2023). Final energy consumption of buildings relative to other sectors, 2022. IEA.
https://www.iea.org/data-and-statistics/charts/final-energy-consumption-of-buildings-relative-to-othersectors-2022, Licence: CC BY 4.0
i-Hub. (2022). Warrigal Residential Care Home Living Laboratory – Lessons Learned Report. The Innovation
Hub for Affordable Heating and Cooling. https://ihub.org.au/wpcontent/uploads/2022/10/Report_LLHC2_Lessons-Learnt.pdf
Inoue, M., Higuma, T., Ito, Y., Kushiro, N., & Kubota, H. (2003). Network architecture for home energy
management system. IEEE Transactions on Consumer Electronics, 49(3), 606–613.
https://doi.org/10.1109/TCE.2003.1233782
Kanakadhurga, D., & Prabaharan, N. (2024). Smart home energy management using demand response with
uncertainty analysis of electric vehicle in the presence of renewable energy sources. Applied Energy,
364, 123062. https://doi.org/10.1016/j.apenergy.2024.123062
Kuiper, G. (2024a). Australia needs more efficient, smarter home hot water systems. Institute for Energy
Economics and Financial Analysis. https://ieefa.org/resources/australia-needs-more-efficientsmarter-home-hot-water-systems
Kuiper, G. (2024b). DER could provide $19 billion economic boost by 2040. Institute for Energy Economics
and Financial Analysis. https://ieefa.org/resources/der-could-provide-19-billion-economic-boost-2040
NERA Economic Consulting. (2022). Valuing Load Flexibility in the NEM. https://arena.gov.au/knowledgebank/valuing-loadflexibility-in-the-nem/
Nilsson, A., Wester, M., Lazarevic, D., & Brandt, N. (2018). Smart homes, home energy management
systems and real-time feedback: Lessons for influencing household energy consumption from a
Swedish field study. Energy and Buildings, 179, 15–25. https://doi.org/10.1016/j.enbuild.2018.08.026
ReAnIn. (2024). Global Home Energy Management Systems (HEMS) Market Growth, Share, Size, Trends
and Forecast (2024—2030) (Rn133542219). https://www.reanin.com/report-store/semiconductorand-electronics/software-and-services/home-energy-management-systems-hems/global-homeenergy-management-systems-hems-market
Shareef, H., Ahmed, M. S., Mohamed, A., & Al Hassan, E. (2018). Review on Home Energy Management
System Considering Demand Responses, Smart Technologies, and Intelligent Controllers. IEEE
Access, 6, 24498–24509. https://doi.org/10.1109/ACCESS.2018.2831917
Sovacool, B. K., & Furszyfer Del Rio, D. D. (2020). Smart home technologies in Europe: A critical review of
concepts, benefits, risks and policies. Renewable and Sustainable Energy Reviews, 120, 109663.
https://doi.org/10.1016/j.rser.2019.109663
Statista. (2024). Energy Management—Australia. Accessed: https://www.statista.com/outlook/cmo/smarthome/energy-management/australia
Strategic Energy, & CyberPractice.io. (2024). Cybersecurity for Demand Flexible Appliances. EDNA.
https://www.iea-4e.org/wp-content/uploads/2024/06/4E-DF5-Cybersecurity-Report-forPublication.pdf
Strauli, F., Kuiper, G., Rakotojaona, L., Lacroix, O., & Lelong, P. (2022). Smarter homes for distributed
energy.
Wacks, K. P. (1991). Utility load management using home automation. IEEE Transactions on Consumer
Electronics, 37(2), 168–174. https://doi.org/10.1109/30.79325
Zhou, B., Li, W., Chan, K. W., Cao, Y., Kuang, Y., Liu, X., & Wang, X. (2016). Smart home energy
management systems: Concept, configurations, and scheduling strategies. Renewable and
Sustainable Energy Reviews, 61, 30–40. https://doi.org/10.1016/j.rser.2016.03.047

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

41

8

Appendix A

Table 9: Overview of market scan data capture framework

Category
(Lvl 1)

Product
characteristics

Product
Overview

Product and company details
inc. description and links

Description

Single/multi device control

Does the product control multiple devices in households or only a single device?

Installation type

Where is the product installed?

Installation complexity

•

Separate device – Separate hardware product providing control of the
devices.

•

Integrated (equipment) – E.g. within batteries, solar inverters or HVAC to
provide control.

•

Integrated (smart meter) - Installed in smart meters to access the data and
control load accordingly.

•

Cloud based – Only cloud based

Householder - Able to be installed by the household (mostly plug and play device
provided with the set of instructions)
Electrician - a qualified electrician is required to install the HEMS in the household.

Degree of cloud control

No cloud (local) - refers to hardware-based HEMs which does not provide any cloud
data or no third party control. Consumer can visualise the data, get the forecasts
according to AI or other tools, and set the controls accordingly.
Partial control - refers to control where third party is involved. This includes maybe an
extent of control by the third party or getting signals from the third party. This includes
getting market signals from the retailers, network providers or integrators and providing
degree of device control to these entities. For instance, allowing retailers or third party to
automatically charge your batteries in case of the harsh weather event. Partial control
involves hardware as well as software.
Fully cloud based does not include any hardware component. Households are being
controlled by the third party to provide efficient and automatic control to the households.
This allows consumers to participate in the Demand Response programs, or take part in
the network stability. This also includes being the part of the VPPs or other programs.

Type of control

Aggregator/retailer integration - implies the degree of control offered by the third party
(retailer or aggregator). For instance, allowing the retailer to charge the batteries at the
time of an upcoming harsh weathers.
Customer based control - refers to getting insights from the system and providing
access to the consumers to make smart decisions about the control.
Energy monitoring - refers to allowing HEMs to monitor and giving data to the
consumers to make decisions according to the available data.

Market Data

Use case/sales pitch

Use case refers to specific end goal which HEMs product is marketed as being designed
to achieve. It could be the energy consumption, enhance affordability, network benefits,
providing control to the consumers, home automation etc. While it may deliver multiple
use cases, this captures the primary case in the marketing of the product.

Market penetration

Details of how widely the product is sold - e.g. XX number of countries, globally, in YY
regions etc

Regional availability

Tick box of specific regions of interest - those that were commonly mentioned in the
market scan: Europe, North America, Asia, Australia/Pacific, Other

Market share

Share of the total sales market, and/or position in the market (e.g. most sales)

Market forecasts

Sales figures for the product, and/or information on the number of 'eligible' households
using the product

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

42

Category
(Lvl 1)

Technical
Capabilities

Product
characteristics

Description

Affordability/Pricing

Prices of the HEMS product including upfront or ongoing (e.g. subscription for service)
costs

Business model/Revenue
stream

Upfront cost, ongoing subscription, or combination

Solar PV Management
BESS management

Attempt to classify the level of control provided to each device with the system (if
provided) – i.e. basic, sophisticated or orchestrated see table below for more detail.

HVAC control
Hot water system control
EV management

Communications

Generation and storage
control categorisation

Classification of control of just the storage and generation assets in a household

Load control categorisation

Classification of control of the hot water, HVAC and EV charging loads within a
household

Cautious overall HEMS
control

Assessment of the level of functionality based on marketed current capabilities (a
deliberately cautious approach reflecting the dynamic nature of this field)

Highest stated overall HEMS
control

assessment based on the highest potential capabilities of a product as claimed in
marketing or industry news coverage – monitoring, basic, sophisticated or orchestrated

VPP integration

Whether the HEMs allow users to participate in the VPP program.

Communications – wired and
wireless

How does the product communicate to behind the meter devices – wired (LAN or Wired),
wireless (Wi-Fi, 4G/5G or Zigbee)

Comms protocol – Behind
the meter

Interoperability with existing devices (e.g. solar inverters, HVAC systems, HWS) through
different comms protocols such as Open source, OEM API, open ADR… inc. ModBus,
SunPec, RTU, or TCP

Interoperability
categorisation

Closed ecosystem - only works with compatible products using a proprietary comms
protocol (or limited functionality)
Bespoke integration - no restriction on API usage (private protocol, but openly
published), but requires specific work to design integration
Open Standard - specifically uses an open-standards based protocol

Upstream comms protocol

Upstream communication refers to the data exchange from the home energy
management system with external entities such as utility companies, grid operators, or
energy service providers through different sets of protocols (e.g. IEEE 2030.5, OpenADR,
CSIP? EEBUS, ANSI/CTA-2045)

Customer
Experience

Details on the customer
interface and level of detail,
along with technical support
and customer service

How is the customer experience with the product? Is there any app or portal or
dashboard to get the information? How is the user interface of the product?

Other

Any other emerging details,
or information on
certification, standards and
compliance

e.g. any details on if the product is in compliance with national or international standards

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

43

For clarity, these levels are interpreted for each end use, or use case in Table 10, below.
Table 10: Interpretation of HEMS levels of sophistication for each end use
End Use

Monitoring

Basic

Sophisticated

Orchestrated

Solar
(Rooftop
PV)

Monitoring only

N/A

Curtail solar generation or divert to
hot water heating to satisfy known
(static) network export limit or predefined export charge. If battery is
present this would consider battery
stage of charge (see BESS below).

Curtail solar generation or divert to hot
water heating in response to dynamic
network or price signals (e.g.
‘Dynamic Operating Envelopes’) or
‘flexible exports’ (i.e., other marketbased signal, such as a retailer
limiting their exposure to negative
wholesale market prices).

Battery
(BESS)

Monitoring only*

N/A

Charge rather than export, or
discharge rather than import, to
optimise financial gain, solar selfconsumption or site resilience.

Manage charging/discharging in
response to external signal(s) and
may incorporate frequency, fast
frequency or voltage response market
participation.
Virtual Power Plants (VPPs fit within
this category).

Heating/
cooling
(HVAC)

Monitoring only

Hot
water
systems
(HWS)

Monitoring and
physical timers

Electric
vehicle
(EV)

Monitoring and
physical timers

Timer and setpoints
based on daily
schedule, with
manual override

Heating/cooling optimised according
to daily schedule and integrating
solar/battery operational data (e.g.,
pre-cooling while solar is generating).

DRED, ripple control or smart
thermostat responding to dynamic
prices or other external signals.

User adjustable HWS
scheduling*

HEMS-optimised use of HWS
scheduling according to behind-themeter operational usage.

As per sophisticated + external
signals (including ripple control).

The most sophisticated functionality is
setpoint or ramping control rather than
on/off control.

May include control of immersion
element to utilise excess solar
generation.
User adjustable
scheduling of EV
charging set up to
respond to
anticipated solar
generation or TOU
tariffs.

User adjustable smart charging
profiles that limit or activate charging
in response to known (i.e. static)
network import or export limits, or
pre-defined solar export charges.
May also activate vehicle-to-home
(V2H) or vehicle-to-grid (V2G) battery
discharging.

As per sophisticated + responds to
dynamic external import or export
signals (including DOEs, flexible
exports, dynamic pricing).
V2H and V2G is considered more
likely in ‘orchestrated’ in response to
external signal.

* This sophistication level is perhaps unlikely to exist in the market, as more advanced features are relatively standard or plausible.

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

44

RESIDENTIAL HEMS AND CONTROLLERS – GLOBAL MARKET SCAN

45
</reference>

<statements>
1. HEMS coordinate solar PV, home batteries, EV (bidirectional/V2H) charging, heat pumps, and controllable loads, optimizing self-consumption and time-of-use arbitrage.
</statements>

Begin the assessment now. Output only the JSON list, without any conversational text or explanations.