The upshot? The huge deployment of smart meters in the U.S. will force utilities to change how they operate, specifically how they communicate with consumers. And as more smart meters come online, business opportunities within other parts of the smart grid industry will ramp up as well.
Smart meters are devices that allow a two-way flow of communication, and someday even power, between utilities and consumers. They have received the bulk of the attention from the media and consumers as utilities replace their old analog devices with these more intelligent versions. Which makes sense. We can see it happening and the consumer complaints of deployments in California and Texas has received national media attention.
But the smart grid and the business opportunities within it don't start and end with new meters. We're already seeing the rate of smart meter installation announcements drop off, and they will continue to do so. An unseen piece is the communications and networking technology that supports advanced metering infrastructure (AMI), which Pike Research says is poised for an expanded period of activity. It's here that big established companies like Landis+Gyr and newer ones like Silver Springs Networks are competing. At the moment, Silver Springs is the market share leader with 29 percent of utility vendor selections, beating out Itron, Sensus and Landis+Gyr, according to the Pike Research report.
Another emerging smart grid moneymaker will be distribution automation, technology that aims to improve the distribution of power from the local substation to consumers. Earlier this month, Pike Research projected the global distribution automation market would hit $2.71 billion (money spent by utilities) and grow 111 percent next year to $5.74 billion.
Highlights from the Pike Research smart grid deployment tracker report:
- Second and third quarters of 2010 included advanced metering infrastructure (AMI) smart meter deployment announcements covering 910,500 customers from five different utilities;
- The largest project announced during this period was the Salt River Project AMI expansion in May, which will increase the Arizona utility's deployment by 500,000 meters.
- Landis + Gyr, which surpassed Itron as the market leader in smart meters in the fourth quarter of 2009, has maintained its top spot;
- Itron has lost market share as a smart meter maker every quarter for the past year.