Worldwide revenue from zero energy buildings is expected to grow at a compound annual growth rate (CAGR) of 43% over the next 20 years, reaching almost $690bn by 2020 and nearly $1.3tn by 2035, according to a new report from Pike Research.
Research analyst Eric Bloom said: "Following the surge in LEED and other green building certifications worldwide over the last few years, zero energy construction has emerged as the ‘holy grail’ in green building design."
"Technically, zero energy building design is feasible for many building types in many regions, but concerns about the upfront cost continue to impede it in the market," Bloom said.
Most of the growth is expected in Europe as the European Union’s Energy Performance of Buildings Directive (EPBD), which governs EU building energy codes comes into force.
EPBD requires nearly zero energy construction in public buildings by 2019 and in all new construction by 2021.
A number of other countries and regions have already set long-term targets and formulated regulations requiring zero energy building construction that will come into effect over the coming years, some as soon as 2016, the report revealed.
These regulations will accelerate the adoption of practices for designing zero energy buildings, or buildings that produce as much energy as they consume through on-site and renewable energy systems.
Similar regulations have come into effect or are being considered in the US and Japan.
Technologies like efficient lighting and HVAC systems, improved insulation, solar photovoltaic and other systems will increase in efficiency and come down in cost in the future due to technological and efficiency advances, according to Pike Research.