Smart meters are used in order to measure the energy consumption in a residential, industrial or commercial setting. They have evolved from traditional analog meters to digital electronic devices that are capable of tracking and recording the customer’s electric use, as well as communicating with the electricity supplier. For the purposes of this study, smart meters have been defined as smart or solid-state electricity meters equipped with two-way communication capabilities. The global market was estimated to be 59.6 million units in 2012, and was valued at USD 8.92 billion in the same year. Advanced Metering Infrastructure (AMI) provides benefits of improved security, time-based rates, as well as remote programming capabilities. Metering devices are connected to the consumer and Electronic Data Management (EDM) system via a communication infrastructure. This is achieved through power line communication (PLC) or using technologies such as ZigBee and M-Bus among others. The market value chain comprises electricity meter manufacturers who interact with power generation, and transmission & distribution (T&D) operators.
Significant benefits of smart meter installations across the value chain are expected to be the key driving force for the industry on a global scale. Smart meters ensure faster power outage detection and restoration by utilities; in addition, customers obtain greater control over their electricity usage. Time-based rates and dynamic pricing allow customers to lower electricity demand during peak hours, and potentially cut down costs. Since electricity consumption information is relayed to the utility, manual meter reading and on-site visits can be eliminated, and the system can be monitored more quickly. Regulatory initiatives to drive energy efficiency are expected to fuel industry growth over the next few years. Since smart meters are capable of lowering peak electricity demand, they ensure enhanced resource usage and optimization. Low power generation may result in reduced energy availability. However, smart meters are capable of efficiently handling intermittent supply, and can compensate for energy loss by controlling electricity consumption of various devices. Smart grids are being established, which aim to modernize utility electricity delivery systems using automation and remote control. On account of benefits such as energy efficiency on the electricity grid, they are beginning to be used from power plants to end-use areas. This is expected to be a considerable opportunity for market participants, since smart meters are an integral part of the grid, and the focal point of full-scale grid establishments.
Key application segments analyzed and reported in this study include residential, commercial and industrial. Growing population, particularly in BRIC nations, has led to an increase in the demand for residential structures. Smart metering records and evaluates consumers’ energy consumption; usage data can also be shown on in-home displays through a direct data link or web page. With the help of feedback on consumption and associated costs, consumers can be better equipped to make energy savings. Time-of-use tariffs and load-variable tariffs help easy management of energy consumption in the residential space. Smart metering also aids in the facilitation of home energy management systems (HEMS), which is expected to positively impact global demand. While the residential segment accounted for majority of the overall shipments, it accounted for considerably lower market share of 27.2% in terms of revenue in 2012. This is primarily due to high power requirements from commercial and industrial sectors. These application segments require meters with higher level of robustness, flexibility and reliability. Monetary losses may be incurred during power fluctuations or outages, which prove to be extremely detrimental to a company’s operations. Growing urbanization has given rise to numerous industries and production activities, further driving the need for energy efficiency and smart meter installations.
Global Smart Meters Volume, by Application, 2012
Over the past few years, utilities in North America have focused on smart grid schemes, which involve the establishment of AMI and smart meters. Utility groups including American Electric Power (AEP), Pacific Gas and Electric Company (PG&E), Southern Company and Southern California Edison have aimed at full-scale rollouts. The U.S. market benefitted from the American Recovery and Reinvestment Act (ARRA) of 2009, which involved initiatives including the Smart Grid Investment Grant (SGIG) program and the Smart Grid Demonstration Program (SGDP). The market in Europe is also expected to be driven by regulatory initiatives, mainly targeted at achieving high degree of energy efficiency. This includes the EU’s 20/20/20 Plan for the year 2020 which aims to achieve 20% increase in energy efficiency among other goals. The European Commission’s Joint Research Centre in 2012 identified 281 smart grid projects across 30 countries, accounting for an investment of Euro 1.8 billion. Asia Pacific is expected to be the largest and fastest growing market in terms of installations through the forecast period; it accounted for nearly 48% of the overall volume share in 2012. China’s spending on smart grids has been increasing substantially, which primarily constitute smart meter installations. These are controlled by the State Grid and Southern Grid, which own 80% and 20% of the grid system respectively. Growing urbanization of the Chinese population constitutes a significant opportunity for the rollout of smart grids and demand for electric vehicles. Power generation equipment manufacturing in China is more cost-effective; therefore, the cost per meter is significant lower in China in comparison with the U.S. or Europe. Need for reducing greenhouse gas emissions and harnessing renewable energy has been fueling smart grid rollouts.
The global market comprises a large number of participants including Itron, Elster, Landis+Gyr, etc. Industry players have focused on merger and acquisition activities along with vertical integration in order to succeed in the market. Energy efficiency awareness programs and demand from Asia Pacific and RoW regions have considerably contributed to product penetration. Furthermore, companies are also benefitted by growing consumer preference towards Electric Vehicles (EV). This is primarily because smart grids provide visibility and control to protect the distribution network’s components from being overloaded by EVs. Key players provide smart meters and wireless communications, in addition to meter data management software. Other companies operating in the market include Sensus, Jiangsu Linyang, Holley Metering, and Echelon among others.
Key questions answered by the report
- What was the size of the smart meters market in 2013; what are the expected growth trends and market forecast for 2014 to 2020
- Which companies were the leaders in 2012, what are their current products and what are the strategic initiatives taken by them
- What opportunities are available to these and other contenders in this space
- What are the barriers and opportunities in the smart meters market
- Which were the top-performing application segments in 2013? How will these segments perform in 2020
- Which were the top-performing regional markets in 2013? How will these markets perform in 2020