The global water meter market is forecast to radically grow in the coming decade as IoT technologies give rise to new smart meter markets in China, Southeast Asia, Europe, the Middle East and Africa. By 2020, IHS Markit expects the total water meter market to have eclipsed $4 billion annually, with roughly $2 million of this coming from the sale of smart metering systems.
For the last decade the smart water meter market has been growing primarily in North America and parts of Western Europe – both regions where existing market drivers like older infrastructure and high labor costs have combined to make investing in smart metering feasible. However, the return-on-investment (ROI) has not typically been favorable in other markets. For example, in regions such as China, Southeast Asia, Eastern Europe, the Middle East and Africa – smart water metering was simply too expensive for the benefits delivered. Governments and water utilities in these regions therefore focused on expanding their coverage and supplying clean, potable water to growing populations.
Looking to the future, the wave of IoT technologies is now expected to change this
In the new Smart Water Meters Report – 2017, IHS Markit forecasts almost 50 million smart water meters will ship globally in 2023, a number which is roughly four times the size of the current market. “There are many utilities worldwide which understand the benefits of investing in smart metering but simply cannot afford it. The new wave of IoT technologies, namely LoRa, Sigfox and NBIoT, are all advertising similar performance specifications to existing solutions but at much lower cost,” adds Michael Markides, Research Director at IHS Markit. “These educated utility customers are currently waiting to see if these new technologies offer the needed reliability, longevity and performance that is expected; and once proven, there will be a global acceleration of smart metering from 2019 onwards.”
Electronic metering adoption continues in the domestic sector
Alongside the conversion of basic metering systems to communicating systems, the next major technology trend for water meters is the adoption of domestic static meters. Static water meters have no moving parts and use electronic measurement (versus traditional mechanical measurement). This technology is more accurate over the lifetime of the meter, especially for low flow situations, which is a concern for utilities that are looking to improve their billing efficiency. Adoption has largely been limited to North America, parts of Europe, and the Middle East to date. Current market volumes have been revised by IHS Markit to be estimated at 3.67 million shipments in 2016, and forecast to almost double in terms of annual shipments by 2023.
The smart water utility in 2018
Improvements in the measurement technology and the general move towards smart metering (versus basic meters) has been the signature of ‘smart water utilities’ to date, based on traditional ROIs such as labor cost saving. However, that picture starts to become more complex through 2018 and beyond as water utilities have to balance smart cities, IoT technology, analytics, cyber security, and many other converging technologies and global trends that will alter how they deliver water to their clients.
Concludes Markides, “Everything is changing for utilities; from weather patterns all the way to customer expectations, water utilities of the 21st century are going to have to adopt new technology and new industry practices to achieve their business goals, of which smart water meters remain the cornerstone and their data becomes the starting point for so much more.”
This insight is from the IHS Markit Smart Utilities team, covering the smart water meter market with data citations from the latest publication on the global water meters market. IHS Markit produces global data for the entire smart metering market in our Smart Utility Meter Intelligence Service.