Smart Meter solution providers look to grow in changing market

IMS Research forecasts the U.S. market for smart metering backhaul infrastructure to sustain annual revenues near $200 million, even as smart electricity meter shipments decline. Smart metering solution providers will achieve this ongoing revenue by offering utilities added functionality on their data backhaul networks, supporting grid automation.

Early smart meter rollouts in North America were marked by rapid adoption of new technologies, affordable extension of communications to as many endpoints as possible, and little integration of metering data into real-time grid automation schemes. As federal stimulus funding supporting smart electricity metering begins to wane, the remaining utility operators who have not yet adopted smart metering have been slower to widely install the technology.

This, together with weak housing construction in the U.S. leaves smart metering solution providers considering alternate ways to add value and encourage continued investment in Advanced Metering Infrastructure (AMI) systems.

In the figure above, the summed revenues for AMI mesh radio data concentrators with and without Distribution Automation (DA) functionality are combined with revenues for high-powered radio base stations, which may be installed to support either or both smart meter and feeder automation tasks.

Smart meter data backhaul equipment revenues have persisted even as smart meter shipments have peaked and begun to decline. This is due to the ongoing work to extend permanent networks to what were initially drive-by Advanced Meter Read (AMR) installations, as well as utility efforts to ensure sufficient coverage to existing meter stock, especially “islanded” commercial and industrial meters installed before the major smart meter rollouts of the late 2000s.

Senior market analyst Donald Henschel comments,

“It is projected that as smart meter shipments bottom out in 2015, the emergence of next-generation meter data backhaul devices designed to integrate smart meter data for better grid automation will bring a return to growth for this market.”

The added functionality offered by these devices may enable utilities to use their installed smart meter stock to drive more effective smart grid applications such as conservation voltage reduction or more sustainable electric vehicle charging.

Henschel continues, “Smart grid automation/smart metering convergence has been a topic of interest for years, but utilities have not been adequately convinced of the benefit of merging these tasks and systems. By offering concentrators with onboard intelligence and local connectivity to serial and Ethernet DA control devices, AMI solution providers are allowing application developers and automation equipment manufacturers to take advantage of real-time endpoint meter data. It will be exciting to see what solutions are on offer this time next year.”

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