Energy Retrofit Systems Market Report 2026

The energy retrofit systems market size has grown strongly in recent years. It will grow from $186.63 billion in 2025 to $199.59 billion in 2026 at a compound annual growth rate (CAGR) of 6.9%. The growth in the historic period can be attributed to increasing energy consumption in existing buildings, rising utility costs, implementation of early energy efficiency regulations, modernization of aging building infrastructure, adoption of basic retrofit technologies.

The energy retrofit systems market size is expected to see strong growth in the next few years. It will grow to $258.17 billion in 2030 at a compound annual growth rate (CAGR) of 6.6%. The growth in the forecast period can be attributed to increasing investments in net-zero buildings, expansion of government energy efficiency incentives, growing demand for smart retrofit analytics, rising focus on lifecycle energy optimization, increasing integration of ai-based building management. Major trends in the forecast period include increasing adoption of smart building retrofit solutions, rising demand for energy-efficient hvac upgrades, growing integration of building automation systems, expansion of led lighting and control retrofits, enhanced focus on operational cost reduction.

The rising energy consumption is expected to drive the growth of the energy retrofit systems market in the coming years. This increase is primarily driven by rapid urbanization, as expanding cities require more commercial buildings, residential complexes, and industrial facilities that continuously consume energy for their operations. The growing demand for energy highlights the importance of adopting energy retrofit systems to enhance efficiency, reduce waste, and lower operational costs while minimizing environmental impacts. For example, in 2025, according to energy.gov.au, an Australian government statistics source, the country’s energy consumption rose by 0.5% in 2023-24 to 5,977 petajoules, marking an increase of 27 petajoules. Therefore, the rising energy consumption is a key factor contributing to the growth of the energy retrofit systems market.

Major companies in the energy retrofit systems market are focusing on developing innovative solutions such as energy-efficient heating systems to improve home energy performance and reduce carbon emissions. These systems are designed to provide effective heating while using less energy, helping reduce utility costs and improve comfort. For instance, in April 2025, the Royal Institution of Chartered Surveyors (RICS), a UK-based professional body for property, land, and infrastructure standards, launched a residential retrofit and energy improvement guide. The guide offers detailed insights on energy-efficient home upgrades, including heating systems, insulation, ventilation, and energy audits, enabling homeowners to make informed decisions and participate in the growing energy retrofit market. This initiative reflects the increasing emphasis on sustainable housing solutions and the expanding opportunities for businesses offering practical tools and technologies to accelerate residential energy retrofits.

In June 2024, Energy Systems Group LLC, a US-based energy services provider, acquired Yearout Energy Services LLC for an undisclosed amount. Through this acquisition, Energy Systems Group aims to expand its national reach, strengthen its service offerings, and diversify its client base across key southwestern states such as Texas, Colorado, Arizona, and New Mexico. The acquisition will enable the company to deliver comprehensive energy efficiency, distributed generation, resiliency, and sustainability solutions. Yearout Energy Services LLC, a US-based energy services and design-build construction firm, specializes in energy retrofit systems, reinforcing Energy Systems Group’s position in the growing national energy solutions market.

Major companies operating in the energy retrofit systems market are ENGIE SA, Siemens AG, General Electric Company, Schneider Electric SE, Mitsubishi Electric Corporation, Honeywell International Inc., Cummins Inc., Centrica Business Solutions Ltd., ABB Ltd, Daikin Industries Ltd., Toshiba Corporation, Johnson Controls International plc, Eaton Corporation plc, Trane Technologies plc, Emerson Electric Co., AECOM Technology Corporation, Tremco CPG Inc., Ameresco Inc., Orion Energy Systems Inc., Home Innovation Research Labs Inc.

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

The energy retrofit systems market consists of sales of lighting systems, building insulation materials, boilers, geothermal heat pumps, energy storage systems, and smart building automation and control systems. 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.

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