Controls, Sensors Use in Building Energy Management Systems Forecast to Grow

• Market predicted to top $4 billion by 2020.
• Plants, buildings smaller than 50,000 sq. ft. are primed for adoption.
• Wireless, energy-harvesting, network-enabled sensors, switches, and conductive media technologies lower installation costs.

The controls and sensors market in the U.S. and Europe is expected to grow at 18 percent annually between now and 2020 on the strength of increased penetration into buildings smaller than 50,000 square feet, as indicated by the results of a recent Lux Research report, “Sensors and Controls for BEMS: Providing the Neural Network to Net-Zero Energy.”

The U.S. market for sensors and controls for building energy management systems (BEMS) will increase at a 17 percent compound annual growth rate to reach $2.14 billion by 2020, while its European counterpart will reach $1.93 billion by 2020, bolstered by a 19 percent compound annual growth rate. The market growth will be fueled by the strength of advanced technologies, downward price pressure, and government incentives.

What Is a BEMS, Exactly?

A BEMS facilitates the integration and interoperation of equipment, appliances, and devices via a network of sensors and controls. Such a BEMS enables two-way data flow between the end user and the end devices in near-real time. It offers remote management of energy- and resource-intensive building subsystems, such as HVAC and lighting, from a central platform, web-based portal, or cloud-based software application.

Specifically, a BEMS comprises four prongs:

1. Equipment
2. Sensors and controls
3. Software systems
4. Services

Sensor and control technologies for a BEMS provide the intelligent backbone that connects equipment, building subsystems, and analytical tools in near-real time to foster a proactive, reactive, and sometimes autodidact, efficient building technology ecosystem. While sensors and controls are the critical enabling aspect of a BEMS, often they are the most overlooked piece of the puzzle.

Looking Down to Buildings Smaller Than 50,000 Sq. Ft.

To date, BEMS developers and integrators have targeted almost exclusively buildings larger than 50,000 sq. ft., in which 5 to 10 percent annual energy savings translates into a massive dollar figure—sometimes in the millions—enabling a payback period for the building owner of three years or less.

This strategy has been fruitful for energy service companies, building systems integrators, and building controls companies over the last two decades, but buildings larger than 50,000 sq. ft. represent less than 5 percent of all commercial buildings in the U.S. and Europe, and this market segment is becoming increasingly played out.

So why don’t energy service companies, building system integrators, and building controls companies just shift strategies to target the 95 percent of commercial buildings smaller than 50,000 sq. ft.? Because the cost of a BEMS, including installation, does not enable a return on investment (ROI) period within three years—the commercial building market’s upper threshold of acceptance for investments in energy efficiency.

Consider a typical 20-year-old, 25,000-sq.-ft. building that is located in a moderate U.S. climate zone, such as Virginia, and spends around $2 per sq. ft. on electricity annually: 20 percent on lighting; 23 percent on heating; 32 percent on cooling; and 25 percent on other equipment like photocopiers, computers, and lunchroom appliances. A low-tech BEMS for this building—comprising around 100 occupancy sensors, 25 CO2 sensors, 25 smart thermostats, five electronic controllers, and five gateways with onboard software and analytics—would cost the building owner about $27,500 upfront.

Assuming the BEMS reduces electricity consumption of lighting equipment by 50 percent, chilling equipment by 40 percent, and heating equipment by 20 percent, for an overall electricity consumption reduction of 27 percent, the ROI period for the BEMS is about two years. This is promisingly below the three-year upper threshold of acceptance for the commercial market.

However, considering that such a system can take upwards of 250 labor-hours or more to install at a cost of around $100 per hour, and further considering the cost of disrupting employee output and lost revenues from downtime, the ROI period of the BEMS increases to around four years or more—not conducive for widespread adoption. This explains why the market segment has remained largely underserved.

Noninvasive, Cost-Effective, Quick to Install

Short of electricity prices rising substantially or technology prices falling dramatically, the widespread growth of BEMS implementation is predicated on the emergence of noninvasive, cost-effective, and quick-to-install sensor and control technologies that can overcome the capital barriers.

Such sensor and control innovations are the missing links in greater BEMS proliferation in the 5.8 million commercial buildings smaller than 50,000 sq. ft. in the U.S. and the roughly 4.5 million commercial buildings smaller than 50,000 sq. ft. in Europe.

A slew of advanced sensors and controls are emerging, aimed at overcoming the capital barriers of installing BEMS. These advanced sensors and controls promise to significantly reduce the payback period of BEMS investments in the small-building market—the highest-hanging but plumpest fruit in the global building stock. New wireless, energy-harvesting, and conductive media technologies will make BEMS more economically attractive for the smaller-building market by significantly reducing the amount of labor, downtime, and other boondoggles associated with BEMS installation.

Specifically, advanced sensors and controls consist of technologies such as:

• Wireless sensors
• Wireless switches
• Conductive media technologies
• Energy-harvesting sensors

Wireless Sensors. Wireless sensors—such as wireless occupancy sensors, wireless CO2 sensors, or wireless photosensors—are battery-powered or energy-harvesting sensors with onboard radios for wireless data communication. Wireless occupancy and photosensors from the likes of Lutron, Leviton, and Thermokon can be noninvasively installed in a factory or office quickly, offering a lighting control system that is economically attractive to even the most price-sensitive segment of the market.

Similarly, wireless CO2 sensors from the likes of Gas Sensing Solutions enable cost-effective, easy-to-install, demand-controlled ventilation systems for optimizing the energy efficiency of HVAC systems.

Wireless Switches. Wireless dimming switches communicate with wireless-enabled sensors, such as occupancy sensors or photosensors, to optimize lighting on an ongoing basis. Energy-harvesting, wireless dimming switches from companies such as EnOcean and Ad Hoc Controls actually can be stuck to the wall with adhesive. The switch sends commands wirelessly to a small receiver that is attached to the circuit at the fixture level.

The promise of this technology is that it significantly reduces the amount of labor associated with installing an advanced lighting system, both in new construction and retrofit applications.

Conductive Media Technologies. Conductive media technologies from, for example, PCN Technology, Sitecom, and Cisco enable two-way data transfer over existing conductive mediums in the building, like power lines, copper, or twisted pair. Like their wireless equivalents, sensors and controls that leverage conductive media systems offer noninvasive, cost-effective, and easy-to-install approaches to integrate BEMS into smaller plants and offices.

Energy-harvesting Sensors. Energy-harvesting sensors and controls from the likes of Illumra, Echoflex, and Leviton are self-powering devices that draw energy from the surrounding environment—light, heat, vibrations, or motion—and convert it to usable electricity.

Like the aforementioned technologies, energy-harvesting sensors and controls facilitate the cost-effective, noninvasive integration of a BEMS; however, unlike battery-powered, wireless sensors and controls that have a finite power source, the energy-harvesting varieties are simply limited to mechanical degradation over time and thus require little to no maintenance.

Unlike conductive media technologies, the spatial deployment of energy harvesting and wireless technologies is not restricted to areas proximal to existing conductive mediums. For example, when using conductive media technologies, a manufacturer may opt to install an occupancy sensor in a specific place because of its proximity to a conductive medium; using wireless and energy-harvesting incumbents, it can install sensors and controls in the most effective place, rather than in the most convenient spot.

Path to Net-zero-energy Buildings

The integrated design concept is the cornerstone of efficient BEMS uptake. Holistically integrating lighting equipment, HVAC equipment, the building envelope, and software through a network of sensors and controls enables the ecosystem of building subsystems to operate harmoniously and symbiotically.

For example, efficient building envelope materials like white roofs and smart windows reduce unwanted solar heat gain, reducing a building’s cooling load and therefore reducing the cost and size of the HVAC system required.

Further integrating the HVAC control system with the lighting control system enables additional synergies. For example, using photosensors in a building to dim lighting equipment when natural light is available reduces unwanted heat gain from electric lamps, further reducing a building’s cooling load and the cost and size of the HVAC system required.

Integrating building equipment and subsystems during design and construction offers the most cost-effective and promising way to achieve a net-zero-energy building. However, this approach is restricted to the relatively tiny new-building construction market.

While the concept of integrated design (to achieve net-zero-energy buildings) lends itself well to new-construction scenarios, it is seldom applicable to retrofit applications because of the invasiveness, cost, and labor intensiveness of interconnecting and integrating the various equipment, subsystems, and envelope of a pre-existing building.

As a result, the opportunity for BEMS through integrated design is limited to the relatively small number of geographically dispersed buildings constructed annually versus the millions of existing buildings that are proximal to one another.

Research by Pacific Northwest National Laboratory suggests that 75 to 80 percent of annual building automation system (BAS) and BEMS installations in the U.S. go into existing buildings. This suggests that although the economics of integrated design during new construction are more favorable for the building owner, most BEMS integration is still occurring through retrofitting.

At present, only 0.2 percent of commercial buildings in the U.S. have installed BEMS and 6.8 percent have BAS. However, these buildings collectively equate to 40.6 percent of U.S. floor space, indicating that the majority of BEMS and BAS have been installed in buildings larger than 50,000 sq. ft. Yet those buildings larger than 50,000 sq. ft. comprise less than 5 percent of the total number of buildings in the U.S.

With the majority of companies focusing on the same segment of the market, the lowest-hanging fruit has been largely harvested, and new opportunities are likely to be constrained to the smaller-buildings market.

The report and analysis led to the development of a demand-side forecast model to quantify opportunities for BEMS and BAS applications exclusively. Among its findings are:

• The market is shifting toward BEMS. The building energy management market is transitioning rapidly from a BAS-dominant one to a BEMS-reliant one. In 2020, about 77 percent of the $2.14 billion U.S. market will comprise BEMS applications, and 40 percent will come from buildings smaller than 50,000 sq. ft.
• Policy is a promising enabler. In the U.S., 20 states have energy-efficiency resource standards that will boost uptake of efficient building systems. The European Union has been similarly aggressive with goals, such as 20 percent lower energy consumption levels by 2020 versus 1990 levels. Together, these policies will bolster growth for the use of sensors and controls.
• There are opportunities at the bottom of the pyramid. Developers such as Lutron, Leviton, Johnson Controls, and Honeywell will embrace advanced sensors and controls while shifting strategies to hone in on buildings smaller than 50,000 sq. ft. By 2020, the number of such buildings with BEMS will be almost 40 times what it is today.

Ryan Castilloux is the lead author of the report “Sensors and Controls for BEMS: Providing the Neural Network to Net-Zero Energy,” and EBS Research Content lead research analyst for LUX Research Inc., 234 Congress St., Boston, MA 02110, 617-502-5300, www.luxresearchinc.com.