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Smart Meters

US demand to rise more than 11% annually through 2015
Smart meter product and service demand in the US is projected to increase more than eleven percent annually to $4.4 billion in 2016. Advances will be driven by the rising penetration of smart meters, particularly advanced metering infrastructure (AMI) products. In addition, the rising share of smart meters in use over the decade supports demand for related parts and services as well as for replacement of older models.

Increasing penetration rates to drive growth
A critical issue when examining the market for smart meters is the penetration rates for these products (i.e., the share of the entire installed base of meters which is accounted for by AMI or AMR products). In 2011, there were approximately 325 million electric, gas and water meters installed in the US. Of these meters, more than 145 million -- or 45 percent -- were smart meters. Through 2016, the penetration rate for smart meters is expected to continue to increase rapidly, rising to 63 percent of all meters installed.

After 2016, the penetration rate for smart meters is expected to continue to increase at a healthy, albeit at a slower pace, as several segments of the market begin to mature. Still the penetration rate for smart meters will continue to rise and by 2021 there will be approximately 285 million smart meters in use, representing more than 75 percent of all meters installed. The highest penetration rate is expected in electric meters, with smart meters representing more than 90 percent of all meters in use by 2021.

Electric market to outpace natural gas, water segments
The penetration rates between the different segments of the market are expected to rise at different paces, with the electric market seeing the fastest increases, rising eight percent annually to 75 percent of all electric meters installed by 2016. In addition, the electric market will see the fastest increases in AMI penetration, with AMI meters expected to be more than half of all smart meters installed in the electric segment by 2016.

Reflecting the rapid increases in meter penetration, demand for smart meters will also increase most rapidly in the electric market, with gains of twelve percent annually through 2016. While not rising as fast as in the electric market, demand in both the natural gas and water segments will also increase rapidly, approaching ten percent annually in each of those markets.

Northeast, Midwest regions to be fastest growing markets
Through 2016, demand for smart meters will rise most rapidly in the Northeast and Midwest regions, primarily because these regions have been slower to roll out large scale smart meter installations, particularly installations of AMI meters in the electric market. As utilities in these regions begin to roll out smart meters, demand will rise. In contrast, demand in the West region will decline, primarily reflecting an elevated level of installations, as several large electric meter rollouts were completed in 2011.


PRESS RELEASE

US Demand for Smart Meter Products and Services to Reach $4.4 Billion in 2016

Smart meter product and service demand in the US is projected to increase more than eleven percent annually to $4.4 billion in 2016. Advances will be driven by the rising penetration of smart meters, particularly advanced metering infrastructure (AMI) products. In addition, the rising share of smart meters in use means that there are a greater number of meters to service, which will support demand for parts and services. The rising number of AMI meters will also generate demand for related products such as meter data management software to better capture and utilize the large amount of data generated by these meters. Furthermore, as some older smart meters, particularly early generations of advanced meter reading (AMR) products, reach the end of their service lives, utilities will begin to replace these products. These and other trends are presented in Smart Meters, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

A critical issue when examining the market for smart meters is the penetration rates for these products -- the share of the entire installed base of meters that is accounted for by AMI or AMR products. In 2011, there were approximately 325 million electric, water and natural gas meters installed in the US, and 45 percent were smart meters. Through 2016, the penetration rate for smart meters is expected to continue to increase rapidly, rising to 63 percent of all meters installed. By 2021, there will be approximately 285 million smart meters in use, approaching 80 percent of all meters installed. The highest penetration rate is expected in electric meters, with smart meters representing more than 90 percent of all electric meters in use by 2021.

Demand for smart meters will increase more than twelve percent annually to $3 billion in 2016. Gains will be driven by the increasing penetration of AMI meters, particularly in the electric segment. Growth will be supported by continued efforts by electric utilities to increase the intelligence of the electric grid. Both the gas and water segments are also expected to see rapid growth in the use of AMI meters, albeit from a much smaller base than the electric segment. In these markets, the added capabilities of AMI vis-à-vis AMR meters are less valuable to utilities. Still, the increased visibility provided by AMI meters and the declining cost difference between AMR and AMI products is supporting growth in the gas and water segments.

  • INTRODUCTION
  • EXECUTIVE SUMMARY
    • Table SMART METER PRODUCT & SERVICE DEMAND (million dollars)
  • MARKET ENVIRONMENT
    • General
    • Economic Environment
      • Table MACROECONOMIC INDICATORS (billion 2005 dollars)
    • Fixed Investment
      • Table NONRESIDENTIAL FIXED INVESTMENT (billion dollars)
    • Construction Outlook
      • Table CONSTRUCTION EXPENDITURES (billion dollars)
    • Electricity Generation
      • Table ELECTRICITY GENERATION BY GENERATOR & FUEL TYPE (billion kilowatt hours)
    • Electric Generating Capacity
      • Table ELECTRIC GENERATING CAPACITY (net summer capacity million kilowatts)
    • Electricity Consumption
      • Table ELECTRICITY DEMAND BY END USER (billion kilowatt hours)
    • Natural Gas Outlook
      • Table NATURAL GAS OUTLOOK (trillion cubic feet)
    • Water Distribution Outlook
      • Table WATER WITHDRAWAL & USE (trillion gallons)
    • Water & Sewer Spending
      • Table WATER & SEWER CONSTRUCTION EXPENDITURES
    • World Outlook
  • REGULATIONS & TECHNOLOGY
    • Regulations & Standards
      • Electric
        • Table OVERVIEW OF STATE RENEWABLE ENERGY PORTFOLIO STANDARDS
      • Natural Gas
      • Water
      • Other
        • Table OVERVIEW OF STATE ENERGY EFFICIENCY RESOURCE STANDARDS FOR ELECTRICITY
        • Table OVERVIEW OF STATE ENERGY EFFICIENCY RESOURCE STANDARDS FOR NATURAL GAS
    • Technology
      • Smart Grid
      • Communications & Grid Integration
      • Meter Data Management
      • Smart Meter Security
  • PRODUCTS
    • General
      • Table SMART METER PRODUCT & SERVICE DEMAND (million dollars)
    • Meters
      • Demand
        • Table SMART METER DEMAND BY TYPE
      • Smart Meter Penetration
        • Table SMART METERS IN USE BY TYPE (million units)
      • Advanced Metering Infrastructure (AMI) Meters
        • Table AMI METER DEMAND BY TYPE
      • Automatic Meter Reading (AMR) Meters
        • Table AMR METER DEMAND BY TYPE
      • Leading Meter Suppliers
    • Parts & Accessories
      • Table SMART METER PART & ACCESSORY DEMAND (million dollars)
      • Meter & Control Software
      • Communications Modules & Controls
      • Other
    • System Installation & Integration Services
      • Table SMART METER SYSTEM INSTALLATION & INTEGRATION DEMAND (million dollars)
  • MARKETS
    • General
      • Table SMART METER PRODUCT & SERVICE DEMAND BY MARKET & APPLICATION (million dollars)
    • Electric Utilities
      • Electric Utility Outlook
        • Table ELECTRIC UTILITY INDICATORS (billion dollars)
      • Smart Meter Penetration
        • Table SMART ELECTRIC METER PENETRATION
      • Smart Meter Demand
        • Table ELECTRIC UTILITY DEMAND FOR SMART METERS (million dollars)
    • Water Utilities
      • Water Utility Outlook
        • Table WATER UTILITY INDICATORS
      • Smart Meter Penetration
        • Table SMART WATER METER PENETRATION
      • Smart Meter Demand
        • Table WATER UTILITY DEMAND FOR SMART METERS (million dollars)
    • Natural Gas Utilities
      • Gas Utility Outlook
        • Table NATURAL GAS UTILITY INDICATORS
      • Smart Meter Penetration
        • Table SMART NATURAL GAS METER PENETRATION
      • Smart Meter Demand
        • Table NATURAL GAS UTILITY DEMAND FOR SMART METERS (million dollars)
  • REGIONAL
    • General
    • Regional Demographic & Economic Trends
      • Population Patterns
        • Table POPULATION BY REGION (million persons)
      • Economic Outlook
        • Table GROSS DOMESTIC PRODUCT BY REGION (billion dollars)
      • Construction Outlook
        • Table CONSTRUCTION EXPENDITURES BY REGION (billion dollars)
    • Smart Meter Demand
      • Table US SMART METER PRODUCT & SERVICE DEMAND BY REGION (million dollars)
      • Northeast
        • Table NORTHEAST SMART METER PRODUCT & SERVICE DEMAND (million dollars)
      • Midwest
        • Table MIDWEST SMART METER PRODUCT & SERVICE DEMAND (million dollars)
      • South
        • Table SOUTH SMART METER PRODUCT & SERVICE DEMAND (million dollars)
      • West
        • Table WEST SMART METER PRODUCT & SERVICE DEMAND (million dollars)
  • INDUSTRY STRUCTURE
    • General
    • Industry Composition
      • Table US SMART METER PRODUCT & SERVICE SALES BY COMPANY, 2011 (million dollars)
    • Market Share
    • Product Development
    • Manufacturing
    • Marketing
    • Cooperative Agreements
      • Table SELECTED COOPERATIVE AGREEMENTS
    • Mergers & Acquisitions
      • Table SELECTED ACQUISITIONS & DIVESTITURES
    • Company Profiles
      • Arad Group
      • Badger Meter Incorporated
      • Capstone Metering LLC
      • Cooper Industries plc
      • Datamatic Limited
      • Echelon Corporation
      • Elster Group SE
      • ESCO Technologies Incorporated
      • General Electric Company
      • Holley Metering Limited
      • Honeywell International Incorporated
      • International Business Machines Corporation
      • Itron Incorporated
      • Mueller Water Products Incorporated
      • Oracle Corporation
      • OSIsoft LLC
      • Roper Industries Incorporated
      • Schneider Electric SA
      • Sensus USA Incorporated
      • Siemens AG
      • Silver Spring Networks Incorporated
      • SmartSynch Incorporated
      • Tantalus Systems Corporation
      • Toshiba Corporation
    • Other Smart Meter Companies

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