Navigating the Future: Grid Modernization Market Trends and Forecast Insights, 2025 Edition

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Grid Modernization Market Size Growth Forecast: What to Expect by 2025?
The size of the grid modernization market has witnessed a swift expansion in the past few years. Its growth is projected to rise from $33.62 billion in 2024 to a substantial $38.91 billion in 2025, marking a compound annual growth rate (CAGR) of 15.7%. Factors contributing to the growth during the historic period include outdated grid infrastructure, growing demand for electricity, heightened regulatory pressure, increased demand for renewable energy sources, and escalating costs associated with energy losses.

How Will the Grid Modernization Market Size Evolve and Grow by 2029?
The market size for grid modernization is projected to experience a fast-paced expansion in the upcoming years, reaching $70.77 billion in 2029 with a compound annual growth rate (CAGR) of 16.1%. Factors contributing to this growth during the projected period include efforts towards decarbonization, the rise of distributed energy resources, growing customer demand for energy autonomy, the development of 5G networks, and increased dependence on digital technologies. Key trends anticipated during this period encompass the incorporation of AI and machine learning, the use of edge computing for grid regulation, cloud-based platforms for grid management, cybersecurity solutions for the next generation, and improved tools for the integration of renewable sources.

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What Drivers Are Propelling the Growth of Grid Modernization Market Forward?
The grid modernization market's expansion is anticipated to be driven by the growing need for renewable energy sources. Sunlight, wind, water, and geothermal heat are all renewable energy sources that are naturally replenishable and can be used repeatedly. The escalating demand for these sources stems from the urge to cut down on carbon emissions and combat global warming. Grid modernization enhances the power grid to be smarter, more adaptable, and equipped to handle fluctuating energy from sources like solar and wind to meet this demand. For example, the Energy Information Administration (EIA), a US government agency, reported in January 2024 that solar power generation in the U.S. is expected to rise by 75%, from 163 billion kWh in 2023 to 286 billion kWh by 2025. In the same vein, wind power generation is anticipated to see a 11% increase, growing from 430 billion kWh in 2023 to 476 billion kWh in 2025. Hence, the augmenting demand for renewable energy sources is set to stimulate the growth of the grid modernization market.

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Which Emerging Trends Are Transforming the Grid Modernization Market in 2025?
Prominent companies active in the grid modernization sector are turning their attention towards inventive methodologies such as AI-empowered systems for utilities. This focus enhances the robustness of the grid, enables effective management of distributed energy resources, and betters the response to outages and system dependability. Hybrid cloud platforms powered by AI are intelligent technology systems employing artificial intelligence and a blend of private and public cloud services to scrutinize data, reach decisions, and streamline operations. For example, Schneider Electric SE, a company based in France that is an expert in energy management and automation solutions, unveiled One Digital Grid Platform, a hybrid cloud solution powered by AI, in March 2025. This platform heightens grid resilience, dependability, and efficiency by amalgamating separate software solutions. It allows utilities to upgrade operations, curtail outages by a maximum of 40%, reduce DER interconnection timelines by 25%, and expedite the deployment of applications by 60%. The platform, with its strong cybersecurity and flawless interoperability, presents an all-encompassing, cost-effective strategy for supplying cleaner, more affordable energy.

What Are the Key Segments in the Grid Modernization Market?
The grid modernizationmarket covered in this report is segmented -

1) By Component: Hardware, Software, Services
2) By Application: Residential, Commercial, Industrial
3) By End-User: Utilities, Independent Power Producers (IPPs), Government And Municipalities

Subsegments:
1) By Hardware: Smart Meters, Circuit Breakers, Switchgear, Transformers, Sensors, Communication Equipment, Distribution Automation Devices
2) By Software: Advanced Distribution Management Systems (ADMS), Energy Management Systems (EMS), Grid Operations and Control Software, SCADA Systems, Analytics Software, Forecasting and Optimization Software
3) By Services: Consulting Services, Integration and Deployment Services, Maintenance and Support Services, Managed Services, Training and Certification Services

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Who Are the Key Players Shaping the Grid Modernization Market's Competitive Landscape?
Major companies operating in the grid modernization market are Hitachi Energy Ltd., Siemens AG, Cisco Systems Inc., Oracle Corporation, Schneider Electric SE, Mitsubishi Electric Corporation, Honeywell International Inc., NRG Energy Inc., ABB Ltd., Wipro Limited, Tech Mahindra Limited, Xylem Inc., Itron Inc., Elster Group GmbH, Enel X S.r.l., Kamstrup A/S, Trilliant Holdings Inc., Fluentgrid Limited, Tantalus Systems Holding Inc., eSmart Systems AS

What Geographic Markets Are Powering Growth in the Grid Modernization Market?
North America was the largest region in the grid modernization market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the grid modernization market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

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