Home Energy Management Systems (HEMS): 2nd Market Overview for Germany (2025)

Abstract

The integration of increasing renewable energies requires the use flexibility on the demand side. Single-family houses (SFHs) play a key role as they connect electricity consumption with decentralized generation. Home Energy Management Systems (HEMS) are central to coordinating flexible loads, such as electric vehicles (EVs), heat pumps (HPs), heating elements, and battery storage systems (BSS), with renewable supply. HEMS enable optimization of self-consumption from photovoltaic (PV) systems and can respond to dynamic electricity tariffs and grid signals, allowing households to shift usage to periods of high renewable availability. With 13 million SFHs in Germany, HEMS offer considerable flexibility potential. Next to optimizing energy flows, they provide economic benefits by reducing electricity and grid-related costs. Despite their potential, the growing HEMS market suffers from a lack of transparency regarding available systems, functionalities, and interoperability. This makes it difficult for consumers and installers to identify and implement suitable solutions. Without HEMS, millions of decentralized generation and consumption units in SFHs would operate uncoordinated. However, operating HPs or charging electric vehicles with zero-emission electricity requires systems that can respond to the availability of renewable energy. This paper provides a comprehensive analysis of the German HEMS market. It presents current HEMS solutions, identifies and compares core system functionalities, and outlines expected developments. The study also includes insights from electrical installers and evaluates the added value HEMS can offer to installation companies.