Internet Of Things (IoT) In Energy Market Size & Forecasts 2026-2035, By Segments (Application, Deployment Mode, Connectivity, Component), Growth Opportunities, Innovation Landscape, Regulatory Shifts, Strategic Regional Insights (U.S., Japan, China, South Korea, UK, Germany, France), and Competitive Dynamics (Schneider Electric, Siemens, IBM, Cisco, Honeywell)

Market Outlook

Internet Of Things (IoT) In Energy Market size is forecast to climb from USD 31.04 billion in 2025 to USD 103.52 billion by 2035, expanding at a CAGR of over 12.8% during 2026-2035. Industry revenue in 2026 is projected at USD 34.59 billion.

• Base Year Value (2025): USD 31.04 Billion
• CAGR (2026-2035): 12.8%
• Forecast Year Value (2035): USD 103.52 Billion
• Historical Data Period: 2021-2025
• Largest Region: North America
• Forecast Period: 2026-2035

Key Takeaways

• North America region accounted for around 35.7% revenue share in 2025, owing to advanced energy management systems.
• Asia Pacific region will expand at over 15% CAGR during the forecast period, impelled by smart grid and renewable energy adoption.
• Holding 58.8% share in 2025, the success of cloud segment was shaped by scalability drives cloud-based IoT adoption.
• The market share of solution segment stood at 63.7% in 2025, propelled by comprehensive IoT platforms drive solution demand.
• With a share of 49.5% in 2025, smart grid segment’s dominance was secured by grid modernization drives smart grid IoT demand.
• The top participants in the internet of things in energy market are Schneider Electric (France), Siemens (Germany), IBM (USA), Cisco (USA), Honeywell (USA), General Electric (USA), Intel (USA), SAP (Germany), Hitachi (Japan), ABB (Switzerland).

Market Dynamics

Increasing Adoption of IoT in Energy Management and Smart Grids

The rising adoption of the internet of things in energy market is fundamentally transforming how energy is produced, distributed, and consumed. Smart grids equipped with IoT technology enhance operational efficiency by enabling real-time data collection and analysis, facilitating better demand response strategies. For instance, the International Energy Agency (IEA) notes that smart grid technologies can significantly improve energy management, helping utilities reduce operational costs while optimizing energy delivery. This shift is driven by consumer demand for greater control over energy usage and a growing emphasis on sustainability, presenting strategic opportunities for both established utilities and innovative startups aiming to provide smart solutions that cater to environmentally conscious consumers.

Integration of Predictive Analytics and Energy Optimization via IoT

The integration of predictive analytics within the internet of things in energy market is enabling more proactive energy management. By leveraging IoT devices, utilities can analyze consumption patterns and predict demand surges, thus optimizing energy distribution and reducing waste. For example, Siemens has implemented IoT-based predictive maintenance solutions that enhance grid reliability and efficiency. This trend is particularly relevant as regulatory bodies increasingly push for decarbonization and energy efficiency, creating a fertile ground for companies that can offer advanced analytics solutions. The opportunity lies in developing platforms that not only optimize energy use but also align with regulatory mandates, thereby positioning firms as leaders in the evolving energy landscape.

Development of Large-Scale, Connected, and Secure Energy IoT Solutions

The development of large-scale, connected, and secure energy IoT solutions is a critical growth driver within the internet of things in energy market. As energy systems become more interconnected, the need for robust cybersecurity measures has intensified, with organizations like the U.S. Department of Energy emphasizing the importance of secure IoT frameworks. This demand for security creates substantial opportunities for technology providers to innovate and deliver secure IoT infrastructures. Additionally, as corporations and governments invest in renewable energy sources, the integration of secure IoT solutions can facilitate efficient energy management across diverse platforms. The ongoing evolution of energy policies and technological advancements will likely continue to shape this sector, encouraging collaboration between traditional energy companies and tech innovators.

Growth Driver Assessment Framework
Growth Driver	Impact On CAGR	Regulatory Influence	Geographic Relevance	Adoption Rate	Impact Timeline
Increasing adoption of IoT in energy management and smart grids	5.00%	Short term (≤ 2 yrs)	North America, Europe (spillover: Asia Pacific)	Medium	Fast
Integration of predictive analytics and energy optimization via IoT	4.00%	Medium term (2–5 yrs)	Asia Pacific, North America (spillover: Europe)	Low	Moderate
Development of large-scale, connected, and secure energy IoT solutions	3.80%	Long term (5+ yrs)	Europe, Asia Pacific (spillover: North America)	Low	Slow

Industry Restraints:

Regulatory Compliance Burdens

The regulatory landscape surrounding the Internet of Things (IoT) in the energy sector presents significant compliance challenges that can impede innovation and deployment. As governments and regulatory bodies, such as the U.S. Federal Energy Regulatory Commission (FERC), implement stringent guidelines to ensure data privacy and cybersecurity, companies face operational inefficiencies in navigating these complex frameworks. The necessity for compliance not only increases operational costs but also creates delays in bringing new IoT solutions to market. For instance, the European Union’s General Data Protection Regulation (GDPR) imposes strict data handling requirements that can deter smaller firms from entering the market, thereby limiting competition and slowing technological advancement. As a result, established players may find themselves in a position to leverage compliance resources, further entrenching their market dominance while stifling disruptive innovation from new entrants.

Supply Chain Constraints

The IoT in the energy sector is also significantly affected by supply chain vulnerabilities, particularly in securing the necessary hardware and software components. The global semiconductor shortage, exacerbated by geopolitical tensions and pandemic-related disruptions, has led to delays and increased costs for IoT device manufacturers. According to the International Energy Agency (IEA), these supply chain issues hinder the deployment of smart meters and other IoT technologies critical for energy efficiency and grid modernization. As companies grapple with these constraints, they may be forced to prioritize short-term operational needs over long-term strategic investments in IoT capabilities. This situation poses a challenge for both established firms, which may struggle to maintain their competitive edge, and new entrants, who may find it increasingly difficult to scale their operations. In the near to medium term, these supply chain challenges are likely to persist, compelling market participants to innovate around logistics and sourcing while also seeking to build more resilient supply chains.

Regional Forecast

North America Market Statistics:

North America captured over 35.7% of the global internet of things in energy market in 2025, establishing itself as the largest region in this sector. This dominance is driven by the rapid adoption of advanced energy management systems, which are increasingly prioritized by businesses and consumers alike. The region’s leadership can be attributed to a confluence of technological advancements, evolving consumer preferences toward sustainability, and robust regulatory frameworks that promote innovation. As companies like the U.S. Department of Energy highlight, investments in smart grid technologies and IoT solutions are reshaping energy consumption patterns, making North America a fertile ground for growth and innovation in the internet of things in energy market. Looking ahead, the region's commitment to digital transformation and sustainability presents significant opportunities for stakeholders seeking to capitalize on this dynamic landscape.

The United States anchors the North American market for the internet of things in energy, serving as a pivotal driver of growth through its advanced technological infrastructure and regulatory support. The U.S. has seen a marked increase in consumer demand for smart technologies that enhance energy efficiency and reduce costs, reflected in initiatives supported by the U.S. Environmental Protection Agency. For instance, programs promoting energy-efficient appliances and smart home technologies are reshaping consumer behavior, encouraging investments in IoT solutions. This cultural shift towards sustainability and efficiency not only strengthens the domestic market but also positions the U.S. as a leader in exporting innovative energy solutions. Ultimately, the U.S. role underscores the potential for expanding the internet of things in energy market across North America, leveraging its technological prowess and regulatory environment to drive further growth.

Canada complements the U.S. in the North American internet of things in energy market, showcasing a commitment to clean energy and innovation. The Canadian government’s investment in renewable energy initiatives and smart grid technology aligns with consumer preferences for sustainable solutions, as highlighted by Natural Resources Canada. This proactive approach fosters a competitive environment where companies are encouraged to develop and implement IoT solutions that improve energy management and reduce greenhouse gas emissions. As Canadian firms increasingly collaborate with U.S. counterparts, the synergy between the two countries enhances the regional market's resilience and innovation capacity. Canada’s emphasis on sustainability and technological advancement further reinforces North America's position as a leader in the internet of things in energy market, presenting ample opportunities for growth and collaboration.

Asia Pacific Market Analysis:

Asia Pacific emerged as the fastest-growing region in the internet of things in energy market, registering rapid growth with a CAGR of 15%. This impressive growth is primarily driven by the swift adoption of smart grid technologies and renewable energy solutions. As countries in the region increasingly focus on sustainability and energy efficiency, the integration of IoT technologies into energy management systems has become paramount. This shift not only enhances operational efficiency but also supports the transition towards cleaner energy sources, aligning with global sustainability goals. Recent initiatives by the Asia-Pacific Economic Cooperation (APEC) underscore the region's commitment to fostering innovation in energy technology, providing a conducive environment for IoT integration.

Japan plays a pivotal role in the internet of things in energy market, leveraging its advanced technological capabilities to enhance energy management. The country's strong emphasis on smart grid development is evident in government policies aimed at promoting energy efficiency and reducing carbon emissions. For instance, the Ministry of the Environment has launched various programs to encourage the adoption of smart meters and renewable energy sources, reflecting a growing consumer preference for sustainable energy solutions. Furthermore, major Japanese corporations, such as Toshiba and Hitachi, are investing heavily in IoT technologies, positioning themselves as leaders in this transformative sector. This focus on innovation and sustainability not only strengthens Japan's market presence but also contributes significantly to the broader regional growth trajectory in the internet of things in energy market.

China is also a key player in the internet of things in energy market, characterized by its aggressive push towards renewable energy and smart grid infrastructure. The Chinese government has implemented several policies aimed at enhancing energy efficiency and promoting the adoption of IoT technologies. Notably, the National Energy Administration’s initiatives to increase the share of renewable energy in the energy mix have spurred significant investments in IoT-enabled energy solutions. Chinese firms, such as Huawei and State Grid Corporation, are at the forefront of this technological revolution, developing smart grid systems that facilitate real-time energy monitoring and management. As consumer demand for cleaner energy solutions continues to rise, China’s strategic investments in IoT technologies are reinforcing its competitive positioning in the regional market, creating substantial opportunities for growth in the internet of things in energy market.

Europe Market Trends:

Europe maintained a notable presence in the internet of things in energy market, capturing a significant share driven by a confluence of technological innovation and sustainability initiatives. The region's commitment to reducing carbon emissions has catalyzed investments in smart energy solutions, aligning with consumer preferences for eco-friendly technologies. The European Union’s Green Deal and regulatory frameworks, such as the Clean Energy for All Europeans package, have further bolstered this market by incentivizing energy efficiency and digital transformation in energy management. Notable advancements in IoT technologies, alongside a highly skilled workforce, have positioned Europe as a leader in the deployment of integrated energy systems. With increasing demand for renewable energy sources and smart grid solutions, the region presents substantial opportunities for growth and innovation in the coming years.

Germany plays a pivotal role in the internet of things in energy market, showcasing high potential through its robust industrial base and commitment to renewable energy. The country’s Energiewende policy, aimed at transitioning to a sustainable energy system, has stimulated significant investments in IoT-enabled energy management solutions. Companies like Siemens AG are leading the charge by developing smart grid technologies that enhance energy efficiency and reliability. The competitive landscape is intensified by a strong emphasis on research and development, with institutions like Fraunhofer UMSICHT driving innovation in IoT applications. This dynamic environment not only meets domestic energy demands but also positions Germany as a key player in exporting smart energy solutions across Europe, reinforcing the region's market strength.

France also emerges as a critical player in the internet of things in energy market, leveraging its substantial investments in smart city initiatives and renewable energy projects. The French government’s commitment to achieving carbon neutrality by 2050 has spurred the adoption of IoT technologies in energy systems, particularly in urban areas. Companies such as Engie are pioneering smart energy solutions that integrate IoT devices for enhanced energy efficiency and consumer engagement. The competitive landscape is marked by a growing number of startups focused on innovative energy solutions, fostering a culture of collaboration and technological advancement. As France continues to embrace digital transformation in its energy sector, it not only enhances its domestic market but also contributes to the broader European strategy of sustainable energy transition, creating a fertile ground for investment and growth in the IoT energy landscape.

Regional Market Attractiveness & Strategic Fit Matrix
Parameter	North America	Asia Pacific	Europe	Latin America	MEA
Innovation Hub	Advanced	Developing	Advanced	Nascent	Nascent
Cost-Sensitive Region	Medium	High	Medium	High	High
Regulatory Environment	Supportive	Neutral	Restrictive	Neutral	Neutral
Demand Drivers	Strong	Strong	Strong	Moderate	Moderate
Development Stage	Developed	Developing	Developed	Emerging	Emerging
Adoption Rate	High	High	High	Low	Low
New Entrants / Startups	Dense	Dense	Dense	Sparse	Sparse
Macro Indicators	Strong	Stable	Stable	Weak	Weak

Segmentation Analysis

 

Analysis by Deployment Mode

The internet of things in energy market is significantly influenced by the cloud segment, which is projected to hold a commanding 58.8% share in 2025. This leadership is primarily attributed to the scalability that cloud-based IoT solutions offer, allowing energy companies to expand their operations without the constraints of on-premise infrastructure. As organizations increasingly prioritize digital transformation and seek to optimize their operational efficiency, cloud solutions are becoming essential. The International Energy Agency emphasizes the role of cloud technology in enhancing data analytics capabilities, which are crucial for real-time decision-making in energy management. This segment creates strategic advantages for both established firms and emerging players by enabling rapid deployment and flexibility in service offerings. Given the ongoing trend towards remote monitoring and management, the cloud segment is expected to remain relevant and continue evolving in the near to medium term.

Analysis by Component

In the internet of things in energy market, the solution segment is a dominant force, expected to capture over 63.7% share in 2025. This segment's leadership stems from the growing demand for comprehensive IoT platforms that integrate various functionalities, enabling seamless management of energy resources. The push for sustainability and regulatory compliance is driving investments in solutions that facilitate energy efficiency and reduce carbon footprints, as highlighted by the U.S. Department of Energy. Established companies and startups alike find opportunities in this segment, as they can leverage innovative solutions to meet customer demands for smarter energy management. The increasing complexity of energy systems ensures that the solution segment will remain pivotal in shaping the future landscape of the energy sector.

Analysis by Application

The internet of things in energy market sees the smart grid segment representing more than 49.5% of the application share in 2025. This segment's prominence is largely due to the ongoing grid modernization initiatives that aim to enhance reliability and efficiency in energy distribution. The U.S. Energy Information Administration notes that investments in smart grid technologies are critical for integrating renewable energy sources and improving grid resilience. Companies in this space are well-positioned to capitalize on the demand for advanced monitoring and control systems, which are essential for managing the complexities of modern energy networks. As the transition to cleaner energy continues, the smart grid segment is expected to remain a key area of focus, driven by technological advancements and policy support.

Report Segmentation
Segment	Sub-Segment
Application	Oil & Gas, Coal Mine, Smart Grid
Deployment Mode	On-premise, Cloud
Connectivity	Zigbee, Wi-Fi, Bluetooth, Z-Wave, Others
Component	Solution, Services

Competitive Landscape

Key players in the internet of things in energy market include Schneider Electric, Siemens, IBM, Cisco, Honeywell, General Electric, Intel, SAP, Hitachi, and ABB. Each of these companies plays a pivotal role in shaping the landscape of IoT applications within the energy sector. Schneider Electric is renowned for its innovative solutions that enhance energy efficiency, while Siemens leverages its extensive expertise in automation and digitalization to optimize energy management. IBM is recognized for its data analytics capabilities that drive insights into energy consumption patterns. Cisco’s focus on secure connectivity supports the integration of IoT devices, and Honeywell’s advancements in smart building technologies further enhance operational efficiency. General Electric is pivotal in developing IoT-enabled industrial solutions, while Intel’s hardware innovations facilitate the deployment of smart sensors. SAP’s software solutions streamline energy data management, and Hitachi’s contributions are notable in smart grid technologies, with ABB focusing on automation and electrification solutions crucial for modern energy systems.

The competitive landscape within the internet of things in energy market is characterized by dynamic strategic initiatives that enhance market positioning and foster innovation. Collaborations among these leading players often lead to the development of cutting-edge technologies and solutions. For instance, partnerships aimed at integrating IoT with renewable energy sources are becoming increasingly prevalent, enabling companies to enhance their service offerings. New product introductions that leverage advanced analytics and machine learning capabilities are also shaping competitive dynamics, allowing companies to provide more tailored energy management solutions. Furthermore, investments in research and development are driving the creation of smarter, more efficient systems that meet evolving consumer and regulatory demands, positioning these companies as leaders in the rapidly evolving energy landscape.

Strategic / Actionable Recommendations for Regional Players

In North America, fostering collaborations with technology startups could enhance innovation in IoT applications, allowing established companies to tap into emerging technologies that drive efficiency and sustainability. Engaging in partnerships with local utilities can also facilitate the integration of smart grid solutions, thus improving service delivery and customer engagement.

For players in the Asia Pacific region, focusing on the adoption of smart city initiatives presents significant opportunities. Collaborating with governmental bodies to develop IoT frameworks can enhance infrastructure resilience and energy efficiency. Emphasizing the deployment of renewable energy technologies in urban settings can also position companies favorably in this rapidly growing market.

In Europe, responding to regulatory shifts towards sustainability requires a proactive approach. Forming alliances with environmental organizations can bolster credibility and facilitate compliance with stringent regulations. Targeting specific sub-segments such as electric vehicle infrastructure and energy storage solutions will also allow companies to leverage the region's commitment to green energy, enhancing their competitive edge.