Latin America. A new report presented by Siemens and Latinometrics reveals that the region has only 10 smart buildings per million inhabitants and faces the challenge of tripling its modernization rate to meet decarbonization goals.
The transformation of global infrastructure – energy, industry and the built environment – has put buildings at the heart of the climate strategy. According to data from the UN and the International Energy Agency (IEA), the sector is responsible for about 30% of global energy consumption and around 40% of CO₂ emissions, making it a decisive front to achieve the goals of net zero emissions by 2050.
In this context, Siemens and Latinometrics presented the Infrastructure Transition Monitor 2025 report, which analyzes the progress of smart buildings in Latin America and the structural challenges facing the region.
A structural gap in the region
The study reveals that Latin America registers an average of 10 smart buildings per million inhabitants, a figure that is equivalent to just a tenth of the density observed in the United States (about 100 per million).
However, regional performance is not homogeneous. Costa Rica (55th), Panama (33rd) and Chile (28th) lead the way in adoption, thanks to a combination of robust building standards, access to green financing and international certifications such as LEED and EDGE. In contrast, larger economies such as Brazil and Mexico have lower penetration levels in relative terms.
The report stresses that the lag is not only due to the size of the market, but also to institutional alignment and the ability to translate public policies into concrete implementation.
Insufficient renovation in the face of climate goals
The IEA estimates that about 20% of the global housing stock needs to adapt by 2030 to align with the net-zero emissions trajectory. This would imply reaching an annual deep renewal rate of more than 2% during this decade. However, the current global rate remains below 1%, and in many cases corresponds to superficial interventions that do not achieve effective decarbonization.
In Latin America, moreover, the region is still below the UN's Sustainable Development Goal 7.3, which calls for an annual improvement of 2.6% in energy efficiency. A large part of the built infrastructure continues to operate with analogue systems, poorly optimised and technologically obsolete.
Despite this, the report identifies positive signs: in 2025, the rate of progress of regional energy intensity tripled compared to the annual average recorded between 2010 and 2019, indicating an acceleration in the effort to improve efficiency.
Digitalization and artificial intelligence: the turning point
According to the study, 56% of business leaders in the sector consider digitalization to be the main catalyst for reducing operational costs. The IEA estimates that digital technologies can reduce the energy consumption of buildings by 30% to 40%.
Tools such as advanced data analysis, predictive models and artificial intelligence allow HVAC and lighting systems to be optimised in real time. One example is "demand response," whereby buildings interact with the power grid to modulate their consumption during peak loads, stabilize the system, and avoid cost overruns.
However, enabling these models in emerging markets will require a quadrupling of investment in smart meters by 2030.
Financing: the main obstacle
Initial capital continues to be a relevant barrier. 60% of commercial real estate executives perceive the transition as too costly, and only 33% consider they have adequate access to financing.
The opportunity, however, is significant: it is estimated that potential investment in green buildings in emerging market cities could reach $25 trillion in the coming years.
Against this backdrop, Siemens is promoting schemes such as Energy as a Service (EaaS), which allow financing technological improvements based on the energy savings generated. International cases show that even old infrastructures can achieve substantial reductions in consumption and emissions through data-driven adjustments.
The report notes that 59% of market players consider the benefits of standalone systems to outweigh their costs. Among the advantages identified are:
- 41% reduction in operating costs
- 32% improvement in energy efficiency
- 28% increase in occupant health and well-being
- 30% Physical Security Strengthening
However, concerns related to cybersecurity (34%) and data management remain, reinforcing the need to combine technology with governance, regulation and human oversight.
Beyond technology
The study concludes that the transition to smart buildings does not depend only on technological availability – which already exists – but on the ability to articulate public policies, financing, regulatory compliance and technical capacity building.
In a context where the built environment represents one of the largest sources of emissions, buildings are no longer simply containers of activity and become strategic assets of the energy transition. For Latin America, the challenge will be to accelerate adoption, close regulatory gaps, and capitalize on the available investment window before efficiency stalls again.
