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Smart Grid Market

The market for Smart Grid was estimated at $70.1 billion in 2025; it is anticipated to increase to $147 billion by 2030, with projections indicating growth to around $309 billion by 2035.

Report ID:DS2408002
Author:Chandra Mohan - Sr. Industry Consultant
Published Date:
Datatree
Energy & Power
E&P Technology
Smart Grid
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Report Summary
Market Data
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Table of Contents

Global Smart Grid Market Outlook

Revenue, 2025

$70.1B

Forecast, 2035

$309B

CAGR, 2026 - 2035

16.0%

The Smart Grid industry revenue is expected to be around $70.1 billion in 2026 and expected to showcase growth with 16.0% CAGR between 2026 and 2035. Building on this growth outlook, the Smart Grid market has become a critical enabler of energy transition strategies, as utilities and governments prioritize smart grid technology to enhance operational efficiency, grid resilience, and reliability. Strong policy support for decarbonization, rapid renewable energy integration, and the rising penetration of electric vehicle charging infrastructure are accelerating investments across the value chain, particularly in digital grid assets and automation. Applications such as Distribution Network Management and Grid Modernization collectively account for 48.0% of market activity, highlighting the central role of distribution automation and real-time control in optimizing network performance. In 2025, the Distribution Level Voltage Level dominated Smart Grid industry revenue, generating $33.66 billion in sales and reinforcing its position as the primary deployment layer for advanced metering infrastructure, demand response systems, and intelligent energy management solutions.

The Smart Grid is an advanced, digitally enabled electricity network that combines two-way power flows, high-speed communications, and data-driven control to optimize the production, delivery, and consumption of electricity. Key features include real-time monitoring via IoT-enabled sensors, automated fault detection and self-healing capabilities, advanced metering infrastructure, and integration of distributed energy resources such as rooftop solar, energy storage, and microgrids. Major applications span distribution network management, grid modernization, substation and feeder automation, outage management, renewable energy integration, and support for flexible loads through demand response and dynamic pricing. Recent trends driving demand include large-scale investments in grid digitalization, the convergence of cloud-based analytics and artificial intelligence for predictive maintenance, heightened focus on cybersecurity for critical infrastructure, and regulatory mandates that favor resilient, low-carbon, and consumer-centric power systems.

Smart Grid market outlook with forecast trends, drivers, opportunities, supply chain, and competition 2025-2035
Smart Grid Market Outlook

Market Key Insights

  • The Smart Grid market is projected to grow from $70.1 billion in 2025 to $309 billion in 2035. This represents a CAGR of 16%, reflecting rising demand across Grid Modernization, Renewable Integration, and EV Charging Infrastructure.

  • Itron, Honeywell, and ABB are among the leading players in this market, shaping its competitive landscape.

  • U.S. and Germany are the top markets within the Smart Grid market and are expected to observe the growth CAGR of 18.2% to 26.6% between 2023 and 2030.

  • Emerging markets including India, Brazil and South Africa are expected to observe highest growth with CAGR ranging between 14.3% to 19.8%.

  • Transition like Shift to Renewable Energy Integration is expected to add $21 billion to the Smart Grid market growth by 2030.

  • The Smart Grid market is set to add $239 billion between 2025 and 2035, with manufacturer targeting Renewable Integration & EV Charging Infrastructure Application projected to gain a larger market share.

  • With

    accelerating integration of renewable energy sources alongside expanding demand for real-time grid monitoring technologies, and

    Increasing Government Investments and Policy Mandates Supporting Large-Scale Grid Modernization Programs, Smart Grid market to expand 341% between 2025 and 2035.

smart grid market size with pie charts of major and emerging country share, CAGR, trends for 2025 and 2032
Smart Grid - Country Share Analysis

Opportunities in the Smart Grid

In Europe, high-voltage transmission operators are also prioritizing Smart Grid investments in AI-based grid analytics, dynamic line rating, and transmission-level monitoring to handle rising cross-border renewable flows. This segment remains underpenetrated in data-driven grid modernization, yet faces mounting pressure from regulators for real-time visibility and congestion management. Globally, transmission-level revenues are expected to increase from $22.44 billion in 2025 to $40.43 billion by 2030, with the strongest upside in offshore wind corridors and interconnector optimization applications.

Growth Opportunities in North America and Asia-Pacific

In North America, Demand Response & Load Management is the most strategically relevant Smart Grid application, underpinned by mature wholesale power markets, high distributed energy resource penetration, and aggressive electrification of transport. Top opportunities center on software-led grid modernization platforms that orchestrate flexible loads, integrate EV charging infrastructure into dynamic tariffs, and leverage advanced metering infrastructure for granular customer segmentation. Competition is intensifying between vertically integrated utilities, digital-native aggregators, and OT-IT convergence specialists offering AI-driven analytics and distribution automation solutions. Key drivers include stringent decarbonization targets, resilience mandates after extreme weather events, and growing focus on grid cybersecurity and real-time visibility across grid-edge assets enabled by IoT sensors and interoperable control architectures.
In Asia-Pacific, Distribution Network Management is emerging as the most critical Smart Grid application as utilities tackle rapid demand growth, high technical losses, and complex urban-rural load profiles. The strongest opportunities lie in scalable distribution automation, modular substation digitization, and large-volume deployments of advanced metering infrastructure that support tariff reform and renewable integration at the feeder level. Competitive dynamics are shaped by state-owned utilities, cost-optimized regional OEMs, and system integrators capable of delivering turnkey programs with localized engineering and manufacturing. Primary drivers include structural grid expansion, policy-backed solar and wind additions, accelerating EV charging infrastructure rollout in major metropolitan corridors, and government-backed programs that prioritize reliability, power quality, and digital control layers over greenfield hardware alone.

Market Dynamics and Supply Chain

01

Driver: Accelerating Integration of Renewable Energy Sources Alongside Expanding Demand for Real-Time Grid Monitoring Technologies

The rapid incorporation of renewable power-such as rooftop solar, community solar, onshore wind, and utility-scale storage-is also pushing utilities to modernize grid infrastructure. High variability in renewable generation requires smarter balancing tools, prompting widespread adoption of advanced distribution management systems, automated voltage regulation, and bidirectional power flow technologies. This shift is also especially prominent in regions with aggressive decarbonization targets and rising prosumer participation. At the same time, utilities and grid operators are also seeking deeper real-time visibility to improve operational efficiency and reduce downtime. The adoption of IoT sensors, edge analytics, synchrophasors, and predictive fault detection systems is also expanding as networks grow more complex and decentralized. These monitoring technologies help detect anomalies earlier, minimize outages, and optimize asset utilization. Together, the growing renewable penetration and rising need for real-time situational awareness form a powerful combined driver accelerating smart grid transformation. 
National and regional governments are also significantly boosting smart grid adoption through funding programs, regulatory mandates, and long-term modernization strategies. Policies supporting AMI rollout, substation automation, and distribution digitalization are also accelerating utility procurement cycles. At the same time, grants for renewable integration, grid resilience, and energy-efficiency upgrades are also encouraging utilities to adopt advanced communication networks, automation platforms, and intelligent control systems. This surge in public-sector support, coupled with mandatory reliability and efficiency standards, is also driving consistent growth in smart grid deployments across both developed and developing markets.
02

Restraint: Very High Upfront Infrastructure and Integration Costs Discourage Widespread Smart Grid Deployment, and Legacy Infrastructure and Interoperability Challenges Hinder Smooth Smart Grid Integration and Roll‑out

Deploying full smart grid systems-including smart meters, sensors, communication networks, and automation platforms-requires substantial capital expenditure. Many utilities, especially in developing regions or those with tight budgets, struggle to justify such high upfront costs. As a result, numerous planned upgrades are delayed or scaled back, limiting market growth. For instance, smaller utilities may defer modernization in favor of patching existing systems, reducing immediate demand for smart grid solutions and constraining vendor revenue.
Many existing power grids rely on aging infrastructure not designed to support modern communication, automation, or data‑driven control. Integrating new smart‑grid components with legacy equipment often requires extensive retrofits or replacements-both costly and technically complex. The lack of standardized protocols across devices further complicates integration and interoperability. This leads to limited functionality, increased deployment time, and higher maintenance burden, deterring utilities from adopting full‑scale smart grid systems
03

Opportunity: North American electric vehicle fleets enabling advanced smart grid charging networks and Residential rooftop solar prosumers in India accelerating distribution-level smart grids

North American operators of commercial and municipal electric vehicle fleets present a fast-growing opportunity for Smart Grid-enabled charging ecosystems that coordinate generation, transmission, and distribution assets. Fleet depots require intelligent load management, vehicle-to-grid capabilities, and interoperable electric vehicle charging infrastructure linked to advanced metering systems. Globally, generation-level Smart Grid revenues are projected to rise from $14.02 billion in 2025 to $23.84 billion by 2030, with the fastest growth expected in North American fleet hubs supporting flexible peaking plants and grid-scale storage.
India’s rapidly growing base of rooftop solar prosumers is creating a sizeable untapped opportunity for Smart Grid vendors at the distribution level, especially in secondary cities. Utilities are seeking advanced metering infrastructure, distribution automation, and secure demand response platforms to manage bidirectional flows from distributed energy resources. Globally, distribution-level revenues are forecast to jump from $33.66 billion in 2025 to $83.00 billion by 2030, with the highest growth concentrated in urban microgrids and low-voltage renewable energy integration projects.
04

Challenge: Rising Cybersecurity and Data Privacy Risks Raise Regulatory and Operational Barriers to Smart Grid Expansion

As smart grids rely heavily on data collection, communication networks, and automated control, they become vulnerable to cyberattacks, data breaches, and system intrusions. Utilities must invest significantly in security infrastructure, encryption, intrusion detection, and continuous monitoring - which raises operational costs and complexity. In many regions, regulatory frameworks for data privacy and cybersecurity remain unclear or inconsistent, discouraging rapid roll‑outs. These risks reduce investor confidence and slow market growth, especially for advanced smart grid deployments involving consumer data.

Supply Chain Landscape

1

Grid Equipment Manufacturing

ABBSiemensSchneider Electric
2

Smart Grid Infrastructure

SiemensSchneider ElectricGE Grid Solutions
3

Advanced Metering Infrastructure

ItronHoneywellLandis+Gyr
4

Distributed Energy Resources

UtilitiesIndustrial facilitiesSmart cities
Smart Grid - Supply Chain

Use Cases of Smart Grid in Modernization & Renewable Integration

Grid Modernization : Smart grid solutions for grid modernization primarily involve advanced metering infrastructure, distribution automation, and grid management platforms that replace outdated electrical networks with intelligent, real‑time systems. These technologies enable utilities to monitor power flows, detect faults, and balance loads efficiently, improving reliability and reducing outages. Major players like Siemens, Schneider Electric, ABB, and IBM provide integrated platforms that support predictive maintenance, data analytics, and automated control, boosting network resilience and operational efficiency as utilities transition to digital infrastructure.
Renewable Integration : For renewable integration, smart grids employ distributed energy resource management systems, energy storage integration, and grid forecasting tools that help stabilize intermittent solar and wind power. These systems allow utilities to forecast renewable generation, manage grid voltage, and coordinate storage resources while minimizing curtailment. Companies like Schneider Electric, Hitachi Energy, and Siemens are driving adoption with solutions that facilitate renewable energy forecasting, grid balancing, and seamless integration of distributed generation.
EV Charging Infrastructure : In the EV charging infrastructure application, smart grid platforms support optimized electric vehicle charging by coordinating demand signals, grid load management, and real‑time pricing. These solutions enhance grid readiness for rapid EV adoption by enabling smart charging, vehicle‑to‑grid capabilities, and integration with renewables. Key providers including ABB, ChargePoint, Schneider Electric, and Eaton–ChargePoint partnerships are deploying scalable charging infrastructure with intelligent energy management features to enable efficient, grid‑friendly EV charging.

Recent Developments

The smart grid market is evolving with the integration of advanced metering infrastructure, IoT-enabled sensors, and AI-driven energy management systems. Recent developments emphasize renewable energy integration, grid automation, and predictive maintenance to enhance reliability and efficiency. A key market trend is the expansion of distributed energy resources, including solar and battery storage, which drives demand for real-time monitoring, smart energy distribution, and demand response solutions, transforming utility operations and enabling sustainable, resilient power networks.

March 2024 : Itron expanded its Grid Edge Intelligence portfolio by acquiring software and services provider Elpis Squared, enabling integration of real‑time, high‑resolution grid‑edge data into utility planning, operations, and engineering processes and enhancing smart grid analytics capabilities. This strategic buy strengthens Itron’s position in smart grid solutions.
November 2025 : Siemens partnered with Shanghai Electric in a major framework supply agreement for medium‑ and low‑voltage smart power grid system equipment, advancing digital and decarbonization goals in power distribution infrastructure across China.

Impact of Industry Transitions on the Smart Grid Market

As a core segment of the E&P Technology industry, the Smart Grid market develops in line with broader industry shifts. Over recent years, transitions such as Shift to Renewable Energy Integration and Adoption of Advanced Metering Infrastructure have redefined priorities across the E&P Technology sector, influencing how the Smart Grid market evolves in terms of demand, applications and competitive dynamics. These transitions highlight the structural changes shaping long-term growth opportunities.
01

Shift to Renewable Energy Integration

The shift to large-scale renewable energy integration is becoming a primary growth engine for the Smart Grid market, with the transition expected to unlock an additional $21 billion in market value by 2030. As utilities connect more solar power, wind energy, and distributed energy resources, they must invest aggressively in advanced energy storage, grid-responsive energy management systems, and predictive analytics to maintain grid stability and grid resilience. This accelerates deployment of advanced battery systems and digital control platforms that optimize renewable integration and demand response in real time. By enabling more flexible, data-driven operations, Smart Grid technologies reduce reliance on fossil fuels, support decarbonization targets, and structurally expand revenue pools across utility, software, and equipment segments, reshaping long-term competitive dynamics.
02

Adoption of Advanced Metering Infrastructure

The deployment of advanced metering infrastructure represents a significant transition in smart grid technology, allowing real-time monitoring, automated billing, and improved load management. This evolution influences the IoT, software, and telecommunication sectors by boosting demand for smart sensors, communication networks, and data analytics platforms. Utilities benefit from enhanced operational efficiency, reduced energy theft, and accurate consumption insights, while consumers gain access to dynamic pricing models and energy-saving tools, driving smarter energy usage across residential and commercial segments.