Indonesia Energy Efficient Construction Market Size, Share, Trends and Forecasts 2031

Key Findings

• The Indonesia Energy Efficient Construction Market is experiencing strong growth driven by rising focus on sustainability and reduced energy consumption in buildings.
• Increasing enforcement of green building codes and energy performance regulations is accelerating market adoption.
• Growing awareness of lifecycle cost savings is encouraging investment in energy-efficient construction practices.
• Advancements in building materials, insulation technologies, and smart systems are improving energy performance.
• Rapid urbanization and infrastructure development are expanding opportunities for energy-efficient buildings.
• Integration of renewable energy systems with efficient building design is gaining traction.
• Government incentives and financing programs are supporting large-scale adoption across residential and commercial sectors.
• Rising demand for low-carbon and climate-resilient buildings is sustaining long-term market growth in Indonesia.

Indonesia Energy Efficient Construction Market Size and Forecast

The Indonesia Energy Efficient Construction Market is projected to grow from USD 412.8 billion in 2025 to USD 768.5 billion by 2031, registering a CAGR of 10.8% during the forecast period. Market growth is driven by increasing demand for sustainable buildings and rising energy costs. Developers are prioritizing energy-efficient designs to reduce operational expenses and meet regulatory requirements. Adoption of advanced insulation, high-performance glazing, and efficient HVAC systems is improving building energy performance. Smart building technologies are further optimizing energy consumption. As sustainability becomes a core construction priority, Indonesia continues to witness strong momentum in energy-efficient construction activities.

Introduction

Energy efficient construction focuses on designing and building structures that minimize energy consumption while maintaining comfort and performance. This approach incorporates efficient building materials, optimized architectural design, and advanced mechanical systems. In Indonesia, energy efficient construction is applied across residential, commercial, and industrial buildings. These buildings reduce energy demand for heating, cooling, lighting, and operations. Improved efficiency lowers greenhouse gas emissions and operating costs. As environmental concerns and energy security gain importance, energy efficient construction is becoming central to modern building practices.

Future Outlook

By 2031, the Indonesia Energy Efficient Construction Market is expected to advance toward net-zero and low-carbon building standards. Wider adoption of smart energy management systems will enable real-time optimization of building performance. Integration of renewable energy sources such as solar and geothermal will become standard practice. Use of advanced materials and prefabrication techniques will improve efficiency and construction speed. Governments will continue strengthening energy codes and sustainability mandates. As climate goals intensify, energy efficient construction will remain a cornerstone of future urban development in Indonesia.

Indonesia Energy Efficient Construction Market Trends

• Rising Adoption of Green Building Standards and Certifications
  Green building certifications are increasingly shaping construction practices in Indonesia. Developers are adopting standards that emphasize energy efficiency and sustainability. Certification improves building value and marketability. Compliance ensures optimized energy performance and reduced environmental impact. Growing demand from tenants and investors supports adoption. This trend is driving widespread implementation of energy-efficient construction practices.

• Integration of Smart Building and Energy Management Systems
  Smart technologies are becoming integral to energy-efficient buildings in Indonesia. Building management systems monitor and control energy usage in real time. Automation improves HVAC, lighting, and power efficiency. Data-driven insights support continuous optimization. Smart integration enhances occupant comfort and operational savings. This trend is transforming building energy management.

• Use of Advanced Insulation and High-Performance Building Materials
  Advanced insulation materials are improving thermal efficiency in modern buildings. In Indonesia, high-performance glazing and reflective materials reduce heat loss and gain. Improved envelopes lower heating and cooling demand. Durable materials enhance long-term performance. Material innovation supports compliance with strict energy codes. This trend is strengthening overall building efficiency.

• Expansion of Renewable Energy Integration in Building Design
  Energy-efficient construction increasingly incorporates on-site renewable energy systems. In Indonesia, solar panels and energy storage solutions are integrated into building designs. Renewable integration reduces grid dependency. Combined efficiency and renewables enhance sustainability outcomes. Building-integrated energy systems improve resilience. This trend is expanding across residential and commercial projects.

• Growth of Prefabrication and Modular Construction Techniques
  Prefabricated and modular construction methods are gaining popularity in Indonesia. Controlled manufacturing environments improve material efficiency and reduce waste. Modular designs support consistent energy performance. Faster construction timelines lower costs. Precision manufacturing enhances insulation and sealing quality. This trend supports scalable energy-efficient construction.

Market Growth Drivers

• Rising Energy Costs and Focus on Operational Savings
  Increasing energy prices are pushing developers and owners toward efficient buildings. In Indonesia, energy-efficient construction reduces long-term operating costs. Lower utility expenses improve return on investment. Cost predictability supports adoption. Operational savings drive market demand. This factor is a key growth driver.

• Stringent Energy Efficiency Regulations and Building Codes
  Governments are enforcing stricter energy performance standards. In Indonesia, new building codes mandate higher efficiency levels. Compliance drives adoption of efficient materials and systems. Regulations encourage retrofit and upgrade projects. Policy enforcement accelerates market growth. Regulatory pressure remains a strong driver.

• Growing Awareness of Environmental and Climate Impact
  Environmental concerns are influencing construction decisions in Indonesia. Energy-efficient buildings reduce carbon emissions. Sustainability goals align with corporate ESG strategies. Public awareness increases demand for green buildings. Environmental responsibility enhances brand value. Climate awareness strongly supports market expansion.

• Urbanization and Infrastructure Development
  Rapid urban growth is increasing construction activity. In Indonesia, new residential and commercial developments prioritize efficiency. Energy-efficient design supports sustainable urbanization. Infrastructure expansion creates long-term demand. Efficient buildings reduce strain on energy systems. Urbanization drives market growth.

• Government Incentives and Green Financing Programs
  Financial incentives support energy-efficient construction projects. In Indonesia, subsidies and tax benefits reduce upfront costs. Green financing improves project feasibility. Public-private initiatives encourage adoption. Incentive programs accelerate market penetration. Government support is a significant driver.

Challenges in the Market

• High Initial Construction and Technology Costs
  Energy-efficient construction often requires higher upfront investment. In Indonesia, advanced materials and systems increase capital costs. Cost sensitivity affects smaller developers. Payback periods may be longer. Financing availability varies. Managing initial costs remains a challenge.

• Limited Awareness and Skilled Workforce Availability
  Lack of awareness can slow adoption of efficient practices. In Indonesia, skilled professionals in energy-efficient design are limited. Training requirements increase project complexity. Knowledge gaps affect performance outcomes. Workforce development takes time. Skill shortages pose challenges.

• Complexity of Retrofitting Existing Buildings
  Upgrading existing buildings to high efficiency standards is complex. In Indonesia, structural constraints limit retrofit options. Retrofit costs can be high. Disruption to occupants affects feasibility. Technical challenges slow adoption. Retrofitting remains difficult.

• Variability in Regulations and Standards Across Regions
  Energy efficiency regulations vary across regions in Indonesia. Lack of uniform standards creates uncertainty. Compliance complexity increases project risk. Developers face planning challenges. Harmonization is needed. Regulatory variability is a persistent issue.

• Performance Gaps Between Design and Operation
  Actual building performance may differ from design expectations. In Indonesia, improper operation affects efficiency outcomes. User behavior influences energy consumption. Monitoring and maintenance are required. Performance gaps reduce confidence. Ensuring operational efficiency remains challenging.

Indonesia Energy Efficient Construction Market Segmentation

By Building Type

• Residential Buildings

• Commercial Buildings

• Industrial Buildings

By Technology

• Energy-Efficient HVAC Systems

• High-Performance Insulation

• Smart Lighting and Controls

• Building Energy Management Systems

By Material

• Green Concrete

• Insulated Panels

• High-Performance Glass

• Sustainable Roofing Materials

By End-User

• Residential Developers

• Commercial Real Estate Owners

• Industrial Facility Operators

• Government and Public Sector

Leading Key Players

• Skanska AB

• Saint-Gobain

• Siemens AG

• Schneider Electric SE

• Johnson Controls International plc

• Honeywell International Inc.

• LafargeHolcim

• Kingspan Group

• Daikin Industries, Ltd.

• ABB Ltd.

Recent Developments

• Saint-Gobain expanded its portfolio of high-performance insulation materials in Indonesia to support green construction projects.

• Schneider Electric SE deployed smart building energy management solutions in Indonesia for large commercial developments.

• Johnson Controls International plc advanced energy-efficient HVAC technologies in Indonesia to reduce building energy consumption.

• Skanska AB increased investment in sustainable construction projects in Indonesia aligned with net-zero goals.

• Honeywell International Inc. introduced intelligent building control systems in Indonesia to optimize energy performance.

This Market Report Will Answer the Following Questions

1. What is the projected market size and growth rate of the Indonesia Energy Efficient Construction Market by 2031?

2. Which technologies and building types are driving adoption in Indonesia?

3. How are smart systems and advanced materials improving building energy efficiency?

4. What challenges affect cost, workforce availability, and retrofit implementation?

5. Who are the leading players shaping the Indonesia Energy Efficient Construction Market?