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Quick Take: The market for building automation and energy management will top $32 billion in 2011 and jump to $37 billion by 2016. North America is the largest market, but the highest percentage gains will be in Asia Pacific. A big part of the boom comes from the (relatively) new-found ability to hook smart buildings to the smart grid, allowing them to tap into revenue streams from demand response. - By Jesse Berst

"Emerging markets such as Asia Pacific will see the highest growth rate over the next few years, but this region is starting from a small base," said Kelvin Chan, ABI Research industry analyst. "With China's announcement that energy efficiency will be a key part of its economic plans in its twelfth economic five-year plan, building efficiency will be vital to meet its targets."

Australia also is taking action with its establishment of a National Buildings Framework as part of its National Strategy on Energy Efficiency. The framework is intended to develop consistency in how buildings are evaluated and rated for energy efficiency.

Sam Lucero, ABI practice director, noted "An important evolving market is demand response, where intermediary companies incentivize building owners and occupiers to enable their properties to be connected and controlled for DR." He noted that a major player in the market, EnerNoc, recently picked up Energy Response, a DR provider in Australia and New Zealand – a move that gives EnerNoc a strong presence in the Pacific region DR markets. He added that other big players like Johnson Controls and Honeywell have made similar acquisitions.

Jesse Berst is the founder and chief analyst of Smart Grid News.com. He consults to smart grid companies seeking market entry advice and M&A advisory. A frequent keynoter at industry events in the US and abroad, he also serves on the Advisory Council of Pacific Northwest National Laboratory's Energy & Environment directorate.

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