Smart Meters Market Overview
The global smart meters market is expected to grow at a CAGR of 10.6% during 2015 – 2020, to reach $20.7 billion by 2020. Smart meters refers to electronic devices, which is used for recording the consumption level of electricity, water and gas at intervals of an hour or less, and provides such information to the utility for billing and monitoring. Smart meters also facilitate two-way communication between the central system and the meter.
The smart gas meters segment is expected to witness the fastest growth in the smart meters market, driven by reducing operational cost for utilities and increasing demand of energy conservation. During the forecast period, smart meters market is expected to witness highest growth in Asia-Pacific, in value terms, due to supportive government initiatives towards the implementation of smart meters across several developing countries.
GLOBAL SMART METERS MARKET SIZE BY TYPE, $M (2011 - 2020)
The end users of smart meters include residential, commercial and industrial. The residential segment includes suburban/urban apartments and standalone autonomous bungalows. With the increasing installation of smart meters in the residential application, the demand for extra energy supply at peak time by switching on fossil fuel plants is reducing, and the consumer’s inclination for peak time energy saving is increasing. The commercial segment includes aligned infrastructures and all commercial buildings, such as small to large shopping complexes, residential lodges, hotels, and offices. The industrial segment includes incorporation of smart meters in processing plants and product manufacturing facilities. Smart meters are gaining significance in industrial sector as it offers increased visibility of electric network by indicating areas of overloads and underloads.
Based on type of smart meters, smart gas meters are anticipated to witness the fastest growth, during the forecast period. Smart gas meters provide timely information on gas withdrawals of each consumer from the network enabling supplier to fulfill the growing demand during peak hours.
Smart Meters Market Dynamics
The smart meters market is driven by the government policies towards installation of smart meters in residential, commercial and industrial areas. In addition, growing inclination towards energy efficiency and reduction in distribution and transmission loss will fuel the growth of smart meters market. Another major factor driving the demand is energy conservation due to smart meters.
Government policies supporting the installation of water meters coupled with growing inclination towards energy efficiency is anticipated to drive demand for smart meters during the forecast period. As a part of broader clean energy initiative, the government of various countries have rolled out legislations, which mandate the adoption of smart meters. In 2013, the U.K. government mandated the utilities for the deployment of approximately 50 million smart gas and electric meters in business centers and residences by 2020.
The increase in energy efficiency and reduction in distribution and transmission loss with the use of smart meters is resulting in increased deployment of smart grid, globally. Governments of several countries play a significant role in rolling out regulations and mandates, and commercialization of smart grid. The development in smart grid deployment is being made in various fields, such as programmable communicating thermostats, advanced metering infrastructure, and integration of communication, sensing and control technologies with field devices in distribution systems. The deployment of high-speed communication networks and advanced sensors on transmission systems is improving the ability to control and monitor operations across the transmission grid at high-voltage substations.
Major appliances in homes, such as washing machines, can be automated with the help of smart meters, which allows appliances to make use of time-of-use tariff advantage. With the two-way communication facilitated by smart meters, between intelligent household appliances and meters, consumers can keep a track of consumption.
With the rising adoption of consumer electronic products, grid operators are managing the power demand through smart meters. As the demand of electricity is increasing sharply, the power reserve is expected to be phased out in the coming years. In the smart grid infrastructure, problems of congestion occur during peak electricity demand periods. The distribution system operators follow demand side management (DSM) for balancing the demand and supply of power. This is done through smart meters, which can decrease the risk of blackouts and manage the demand side during peak load crisis. Smart meters also allow distribution system operators for switching loads in the consumer’s prioritized areas, to eliminate the need of emergency service providers and critical customer service providers, for switching. This is done because switching multiple smart meters within a short span of time negatively impacts the power quality (PQ) of the grid.
The advancements in smart meters will allow consumers to make more accurate decisions about energy consumption, by adjusting the quantity and timing of the electricity used by them. Smart meters offer cost-efficiency for households and cost reductions for commercial customers.
Smart Meters Market Competitive Landscape
The intensity of rivalry in the smart meters market is moderate. Most of the major vendors in the industry is actively focusing on research & development to enhance quality of existing and upcoming digital meters. They are also focusing on product launch and partnerships to enhance product features and expand their consumer base across the globe. Companies such as Siemens AG, General Electric, Schneider Electric and Osaka Electric Co. Ltd are adding new products to their existing portfolio to cater to growing demand of smart meters across the globe. Elster Group GmbH and Itron Inc. have also won contracts from many government agencies to provide latest technology solutions related to meters for energy and billing efficiency.
Key competitors are specifically focusing on the Asia-Pacific and the North American smart meters market, as these regions exhibit strong purchase intention owing to the rising concern of individuals towards accuracy of billing, coupled with additional benefits offered in case of electrical utilities. Some of the key players operating in the smart meters market are Itron Inc, Iskraemeco d.d, Landis+Gyr Ag, Osaka Electric Co. Ltd, Elster Group GmbH, Siemens AG, General Electric Company, ICSA(India) Limited, Schneider Electric Sa, and Holley Metering Ltd.
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