Grid Modernization Market Report 2026

The grid modernization market size has grown rapidly in recent years. It will grow from $38.91 billion in 2025 to $45.23 billion in 2026 at a compound annual growth rate (CAGR) of 16.2%. The growth in the historic period can be attributed to growing electricity demand, aging grid infrastructure, increasing renewable energy integration, government incentives for smart grids, advancements in communication and sensor technologies.

The grid modernization market size is expected to see rapid growth in the next few years. It will grow to $81.97 billion in 2030 at a compound annual growth rate (CAGR) of 16%. The growth in the forecast period can be attributed to rising adoption of ai and analytics for grid optimization, expansion of renewable energy capacity, deployment of smart meters and sensors, increased investment in grid resilience, integration with electric mobility and energy storage solutions. Major trends in the forecast period include integration of smart grid hardware components, adoption of advanced energy management software, implementation of predictive maintenance solutions, expansion of distributed energy resource management, deployment of grid automation and monitoring systems.

Rising demand for renewable energy sources is expected to drive the growth of the grid modernization market. Renewable energy sources are naturally replenished resources such as sunlight, wind, water, and geothermal heat. The increasing demand for these sources is primarily driven by the global need to reduce carbon emissions and combat climate change. Grid modernization plays a key role in supporting this demand by making power infrastructure smarter, more adaptable, and better equipped to handle the variable nature of energy from renewable sources such as solar and wind. For example, in January 2024, the U.S. Energy Information Administration (EIA) reported that solar power generation in the U.S. is expected to rise by 75%, from 163 billion kWh in 2023 to 286 billion kWh by 2025. Wind power generation is also projected to increase by 11%, growing from 430 billion kWh in 2023 to 476 billion kWh by 2025. As a result, the increasing demand for renewable energy is set to boost the grid modernization market.

Major companies in the grid modernization market are developing advanced solutions such as AI-driven ecosystems for utilities, aimed at improving grid resiliency, efficiently managing distributed energy resources, and enhancing outage response and overall system reliability. AI-powered hybrid cloud platforms are intelligent systems that combine artificial intelligence with both private and public cloud services to analyze data, optimize decision-making, and manage operations more effectively. For instance, in March 2025, Schneider Electric SE, a France-based leader in energy management and automation, launched the One Digital Grid Platform - an AI-enabled, hybrid cloud solution. This platform boosts grid resiliency and efficiency by integrating independent software systems and enables utilities to modernize operations, reduce outages by up to 40%, cut DER interconnection timelines by 25%, and accelerate application deployment by 60%. It also offers strong cybersecurity and seamless interoperability, making it a comprehensive and cost-effective solution for delivering cleaner, more affordable energy.

In October 2023, Qualus Corporation, a U.S.-based power services company, acquired GridBright for an undisclosed amount. Through this acquisition, Qualus aims to reinforce its role in the energy transition by expanding its expertise in grid modernization, resilience, security, and sustainability, while offering comprehensive end-to-end solutions. GridBright is a U.S.-based technology firm focused on secure and sustainable grid integration for utilities and renewable energy developers.

Major companies operating in the grid modernization market are Hitachi Energy Ltd., Siemens AG, Schneider Electric SE, ABB Ltd., Mitsubishi Electric Corporation, General Electric Company, Eaton Corporation plc, Toshiba Corporation, Honeywell International Inc., Oracle Corporation, Cisco Systems Inc., Itron Inc., Kamstrup A/S, Trilliant Holdings Inc., Tantalus Systems Holding Inc., Fluentgrid Limited, eSmart Systems AS, Landis+Gyr Group AG, Open Systems International Inc., Alstom SA, CG Power and Industrial Solutions Ltd., Larsen & Toubro Limited.

North America was the largest region in the grid modernization market in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the grid modernization market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the grid modernization market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The grid modernization market consists of revenues earned by entities by providing services such as grid automation services, demand response services, consulting, and system design services. The market value includes the value of related goods sold by the service provider or included within the service offering. The grid modernization market also includes sales of smart meters, smart grid communication devices, power inverters, electric vehicle (EV) charging infrastructure, circuit breakers, and switchgear. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

This product will be delivered within 1-3 business days.