Smart Grid Market By Component (Hardware, Software, and Services), By Technology (Advanced Metering Infrastructure, Demand Response Management, Distribution Management System, Phasor Measurement Units, Substation Automation, Smart Transformers, and Others), By Communication Network (Wired and Wireless), By End-user (Residential and Commercial), Global Market Size, Segmental analysis, Regional Overview, Company share analysis, Leading Company Profiles And Market Forecast, 2025 – 2035

Industry Outlook

The Smart Grid market accounted for USD 58.5 Billion in 2024 and is expected to reach USD 338.4 Billion by 2035, growing at a CAGR of around 17.3% between 2025 and 2035. A smart grid is an advanced electrical grid system that integrates digital technology into managing, controlling, and optimizing electricity generation, transmission, and consumption. Integration of these systems with traditional power systems involves smart meters, sensors, and communication networks offering real-time information exchange between utilities and consumers in demand management, improvement of reliability, and efficiency.

Another reason for smart grids is the integration of renewable resources into the grid, namely, solar and wind. They contribute to lower energy waste, cost-saving reduction, and general sustainability improvement within a power system. The increasing demand for energy efficiency, and the integration of renewables into the grid, therefore fasten the growth of this smart grid market.

Report Scope:

Market Dynamics

Surge in Electric Vehicle Adoption Accelerates Need for Smart Grid Solutions and Efficient Charging Management

The growth of Electric Vehicles (EVs) has increased the demand for intelligent grid systems to address the higher requirement for efficient charging and grid integration. According to the International Energy Agency, in 2021, the sales of EVs doubled worldwide, reaching more than 6.6 million units, indicating the rapid transition to cleaner transportation. This growth requires more intelligent grid solutions that will support high volumes of charging, optimize energy distribution, and avoid congestion on the grid.

As EV adoption grows, utilities will have to use advanced grid management technologies that will ensure stability, efficient energy use, and smooth integration of renewable energy sources. The demand-response strategy will be a vital way of addressing peak load problems. Investments in smart charging infrastructure will support the rapidly increasing number of EVs and enhance further grid reliability.

Rise of Microgrids and Distributed Energy Resources Fueling Demand for Decentralized Energy Solutions

Microgrids and distributed energy resources are on the rise and changing the landscape of energy. These have brought into demand localized energy solutions. According to the U.S. Department of Energy, microgrids are key elements for enhancing community energy resilience and efficiency. This helps communities generate, store, and manage their energy, thus reducing dependency on the central grids while enhancing security.

As these technologies advance, smart grid solutions are essential for integrating and optimizing DERs, ensuring reliable and sustainable energy distribution. The growth of DERs is expected to drive investments in localized energy management systems and grid modernization efforts.

Additionally, the adoption of renewable energy sources like solar and wind in DERs is increasing, further promoting sustainable energy practices. The demand for advanced grid infrastructure will keep increasing with the ever-growing number of businesses and homeowners embracing these solutions.

Cybersecurity Risks and Vulnerabilities Posing Challenges to Advanced Grid Technologies

Advanced grid technologies are becoming more integrated into energy systems, which creates a growing risk of cyberattacks. Such threats are risky for grid security. With the increasing use of digital platforms in the management of grids, critical infrastructure becomes vulnerable to hacking, and service disruptions, data theft, and even system failure may occur. The use of IoT devices, AI, and real-time data analytics further exposes networks to potential cyber threats.

Such vulnerabilities lead to financial loss, reputational damage, and even national security. Utilities need to invest in robust cybersecurity frameworks with continuous monitoring to protect against evolving cyber threats and ensure the resilience of energy systems. Increasingly complex interconnected systems are becoming more difficult to fully implement comprehensive security measures.

Unlocking the Potential of Decentralized Energy Generation for Smart Grid Optimization

Decentralized energy production, like rooftop solar and small wind farms, provides massive opportunities for smart grids to better utilize energy and minimize dependency on centralized power generation systems. According to the U.S. Department of Energy, there are already more than 2 million solar installations in the country, thus making up an ever-growing percentage of the total renewable energy capacity of the nation. Distributed generation sources can be integrated by these smart grid systems through monitoring in real-time, energy-efficient distribution, and grid stability. This can be possible because of decentralization to offer clean, resilient energy systems.

Further, the smart grid would optimize energy flow to allow more balanced local generation against demand while at the same time reducing losses from transmission. It will unlock new business models, including peer-to-peer energy sharing and microgrids, thereby introducing new opportunities in the distributed energy resources sector.

Advancements in Energy Storage Technologies Optimizing Smart Grid Efficiency and Supporting Renewable Integration

Advances in energy storage technologies including batteries, provide major opportunities in smart grids for optimizing both the storage and the distribution of electricity. Energy storage balances supply and demand and stores surpluses from renewable power sources for use at different times. It will improve resilience in the grid as new storage technologies continue to mature and become cost-effective, efficient, and environmentally friendly to reduce dependence on fossil fuels.

Better electricity flow management, less waste, and a more reliable and sustainable supply of energy are the possible outputs of the integration of energy storage with smart grids. This opportunity will motivate investments in both energy storage and smart grid solutions that ensure efficient power distribution.

Moreover, energy storage can also enhance grid reliability during peak demand periods and natural disasters and contribute further to energy security. This evolution of these technologies will support decentralized energy systems and empower consumers to take an active part in the management of energy.

Industry Experts Opinion

“We see growing recognition across the industry that next-generation meters can play a key role in the energy transition. By including high resolution data, edge computing, and real-time networking, meters can go from being simple data collection devices to the distributed sensing, compute, and control platform for the future grid.”

• Mike Phillips CEO of Sense

"Our collaborative offering will complement Landis+Gyr's comprehensive edge-to-enterprise portfolio and enable utilities to drive a resilient, reliable, smart, and sustainable grid, while at the same time empowering end consumers to manage energy better. We are very excited about combining the expertise of both our companies and people to ensure we deliver solutions that go well beyond next gen technology, allowing us to expand our integrated grid edge intelligence solutions offering with OATI as a leading partner in the energy management."

• Werner Lieberherr, Chief Executive Officer of Landis+Gyr

Segment Analysis

Based on the component, the Smart Grid market has been classified into hardware, software, and services. The hardware segment presently leads the smart grid market primarily because it requires a hardware upgrade such as smart meters, sensors, transformers, and communications devices, which are necessary to bring about change in modern grids with real-time monitoring, improve distribution efficiency, and enhance the resilience of a grid. In the early stages, it incurs quite a significant cost, but it is the best way forward for renewable source integration to achieve a resilient, automatic grid. 

Based on the technology, the Smart Grid market has been classified into advanced metering infrastructure, demand response management, distribution management system, phasor measurement units, substation automation, smart transformers, and others. Advanced Metering Infrastructure (AMI) is currently leading the market due to its provision of real-time data on energy consumption, thereby allowing utilities to optimize energy distribution and improve the accuracy of billing. With AMI, grid reliability is improved through remote monitoring and diagnostics, which helps to minimize manual meter readings. Further, it supports demand response programs by providing more detailed insights into energy usage patterns.

Regional Analysis

The North America Smart Grid market is the largest globally, driven by significant investments in grid modernization, particularly in the United States and Canada. The region's focus on improving grid efficiency, reducing energy losses, and integrating renewable energy sources has spurred the adoption of advanced grid technologies. Government initiatives like the U.S. Programs for smart grid investment grants given by the Department of Energy have seen great impacts on accelerating deployment by investing in smart meters and critical infrastructures like these sensors. Growing demand for energy that is reliable will boost this market. Finally, improving technologies in areas like communications, IoTs, and cybersecurity will promote further the management and security of North American grids and position that continent to remain a leader.

The Asia-Pacific Smart Grid market is the fastest growing, because rapid urbanization, industrialization, and infrastructure development are observed in countries such as China, India, and Japan. These nations are upgrading their power grids to ensure more reliable supply, lesser losses in energy, and easy integration of renewable sources of energy. China, the largest market in the region is making huge investments into smart grid technologies as part of its national energy transition strategy. India, too, is fast-tracking the adoption of smart grids to meet increasing energy needs and efficiency. This region, with its increasing focus on energy security and sustainability with backed government policies, is adopting a rapidly growing market of smart grid technology in the Asia-Pacific.  

Competitive Landscape

Major Key players operating in the smart grid market include Siemens AG, General Electric (GE), Schneider Electric, Itron Inc., ABB Ltd., and Honeywell International, among others. This large group of companies competes for leadership in innovative hardware, software, and services, modernizing and optimizing operations within the grid. New innovations include Siemens Smart Grid Solutions from the German company to provide energy efficiency and reliability for the grid, while ABB unveiled the ABB Ability™ Smart Grid platform for real-time monitoring and predictive analytics. The leaders are working with utilities globally to speed up the transition to the latest grid technologies with IoT, AI, and big data analytics to improve performance and resilience. As investments in smart grids continue to grow, these companies are spearheading the charge toward the future of energy management and distribution.

Smart Grid Market, Company Shares Analysis, 2024

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Recent Developments:

• In October 2024, Telit Cinterion, an end-to-end IoT solutions enabler, announced an industry-first smart grid solution that is developed in partnership with Netinium BV, a leader in vendor-agnostic head-end systems for smart metering and smart grid applications.
• In September 2024, Mouser Electronics, Inc., the official worldwide distributor of the latest electronic components and industrial automation products, released the latest installment which incorporates renewable energy in smart grid technology, focusing on how AI and 5G could provide sustainable grid management.
• In September 2024, Trilliant, a world-class leader in solutions for AMI, smart grid, smart cities, and IIoT, announced that Sense, the company creating an embedded intelligence relationship revolution, has become the new partner in North America with it in order to make edge analytics more efficient at scale.

Report Coverage:

By Component

• Hardware
• Software
• Services

By Technology

• Advanced Metering Infrastructure
• Demand Response Management
• Distribution Management System
• Phasor Measurement Units
• Substation Automation
• Smart Transformers
• Others

By Communication Network

• Wired
• Wireless

By End-user

• Residential
• Commercial

By Region

North America

• U.S.
• Canada

Europe

• U.K.
• France
• Germany
• Italy
• Spain
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• Australia
• South Korea
• Singapore
• Rest of Asia Pacific

Latin America

• Brazil
• Argentina
• Mexico
• Rest of Latin America

Middle East & Africa

• GCC Countries
• South Africa
• Rest of Middle East & Africa

List of Companies:

• Siemens AG
• General Electric (GE)
• Schneider Electric
• Itron Inc.
• Landis+Gyr
• Honeywell International Inc.
• ABB Ltd.
• Eaton Corporation
• Cisco Systems Inc.
• Xylem Inc.
• Trilliant Networks
• Accenture
• Oracle Corporation
• Aclara Technologies
• Silver Spring Networks

Frequently Asked Questions (FAQs)