Over 100 million smart meters with HAN gateways to drive HEMS market past US$9bn in five years

IMS Research, a leading analyst firm recently acquired by IHS Inc. (NYSE:IHS), forecasts that more than 100 million smart meters will be deployed with integrated HAN (‘home area network’) gateways in the next five years.

An integrated HAN gateway enables communication between the smart meter and devices within a home energy management system (HEMS), such as an in-home display or smart appliance (once these are more widely available), generally using a communications solution which is discrete to the WAN/NAN solution.

For example, in the United States, where integrated HAN gateways have become commonplace (despite many not being activated/enabled by the utility company), most smart meters are deployed with a fixed RF mesh solution for the backhaul network (e.g. smart meter to concentrator) and often ZigBee (a standardised RF mesh technology based on IEEE 802.15.4) for the HAN solution.

Like the approach to the deployments of smart meters themselves, the inclusion of a HAN gateway is typically very country-specific and legislation-driven. Even where there is a common framework, actual deployment strategies vary. For example, EU regulations require the deployment of smart meters to most consumers within the next eight years (EU regulation 2007/72/EC). However, it is up to EU Member States to determine their own implementation strategies. As a result, approaches vary widely.

Lisa Arrowsmith, senior analyst with IMS Research, explains, “At one extreme, there are countries such as Italy, the first in Europe to start to deploy smart meters full-scale. Here, there’s been a penetration rate of more than 90 percent of households for a number of years. However, the main focus at this stage was not on developing HAN solutions, and the smart meters were deployed without integrated HAN gateways. As a result, the [email protected] Initiative (formed by Electrolux, Enel, Indesit and Telecom Italia) is working to develop a common system which can ‘retrofit’ these smart meters with HAN gateways, most likely via a powerline-ZigBee gateway, to give home energy management systems access to consumption data and other information available via the AMI network. This is an example of a very commercially-driven approach to deploying HAN solutions and home energy devices.”

Conversely, in countries such as the United Kingdom, the Government has not only required that smart meters be deployed with integrated HAN gateways, but also compatible in-home displays (IHDs) are set to be deployed concurrently. Similarly, the other side of the world, the Victorian Government in Australia has mandated the inclusion of integrated HAN gateways, and is set to offer subsidized IHDs to smart meter customers.

Arrowsmith continues, “As a result of legislation such as this, a recent study from IMS Research (The World Market for Smart Home Energy Management Systems – 2012 Edition) projects that annual global shipments of IHDs will grow from around two million units last year, to more than 13.5 million units in 2015. However, where there isn’t legislation, IHDs are set to face competition from ‘soft’ displays, where electricity consumption information is instead displayed on existing screens, such as tablet PCs, cellular handsets, and even TVs.”

Elsewhere in Europe there are different approaches to integrated HAN gateways. France is an interesting example, where the smart meters (or ‘Linky’ meters, as they are termed in France) are deployed without an integrated HAN gateway, but with a common port to enable the retrofit of a communications module.

Arrowsmith concludes, “There is growing momentum behind not only deploying smart meters with integrated HAN gateways, but also towards retrofitting existing smart meter installed bases with the functionality to participate in energy management systems. Yet there are still a number of barriers stopping the widespread uptake of home energy management systems to communicate with these HAN gateways. These include the lack of widespread incentives, such as dynamic pricing tariffs, the immaturity of utility plans for demand-response programs, and the fact that many utility companies – particularly in the United States – have not enabled HAN gateways, even where they are installed in the field. Despite this, a range of factors, including the growing availability of dynamic pricing, as well as the involvement of a range of commercial organisations, such as telecommunications companies, consumer goods providers and even security providers, are set to drive the market for home energy management systems to over US$9 billion over the next five years.”

Information within this press release was taken from a recently published report from IMS Research, entitled “The World Market for Smart Home Energy Management Systems – 2012 Edition”. This 700+ report includes over 300 data tables, projecting the size of the market for a range of smart home energy management devices – including smart thermostats, IHDs, smart meters (with and without HAN gateways), smart plugs, smart appliances, E.V. chargers, connected P.V. systems, and other load control devices. Full analysis of smart meter deployment, the availability of ToU & dynamic pricing, key legislation, and a full set of country-specific device forecasts is provided for 26 separate countries/sub-regions. This includes full analysis of the network architecture projected to be predominant in each country, along with the connectivity technologies used, and the various routes-to-market.


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