Market Insight

Smart metering is a growing large-scale IoT solution for global utilities companies

January 28, 2019

Susanne Cumberland Susanne Cumberland Senior Research Analyst, Power and Energy Technology, IHS Markit
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Highlights

  • Approximately 352 million electricity, gas, and water meters shipped in 2018; 44 percent of those meters were communicating meters. Around 700 million smart meters are currently installed worldwide.
     
  • In total, 1 million meters – both basic and communicating – will be shipped globally every day in 2019.
     
  • Nearly $9 billion was spent in 2018 on managed services for electric and water Advanced Metering Infrastructure (AMI), which will rise to $13 billion in 2023.

Analysis

On a global basis, smart metering rollouts are expected to peak in 2020, due in large part to government legislation and initiatives. For example, China’s 13th Five Year Plan focuses on electric power development, and most of the country’s meter installations are expected to be completed by 2020.

Growth in smart metering is based on billing and labor savings from not having to physically take meter readings. The initial investment in meter-to-cash technology already delivers additional benefits to the utilities and their customers. For example, once a smart meter is installed, average energy consumption is estimated to drop by 10 percent per customer. Many utilities companies also highlight the improved customer service benefits, but typically as a justification for their spending to governments or customers, rather than an actual return on investment for the utility.

AMI and IoT

AMI has slowly grown over the years, but it is arguably the most successful example of a large-scale IoT solution in use by utilities today at over 700 million installed endpoints worldwide. One hindrance to adoption has historically centered on the choice of communication technology. It was initially believed that one solution would  win the market. However, the focus on the outcomes and applications has allowed utilities to choose solutions that best fits their needs, which means no single connectivity solution will dominate the market.

By understanding applications beyond meter-to-cash, investment for IoT in utilities will now be pushed forward. For 2019 and beyond, the conversation for AMI and IoT will be centered on the total cost of ownership of the solution and increasing the potential for further applications of the same communication networks.

IoT in Utilities Report – 2019

This report explores how IoT fits into the smart metering market and introduces the Total Cost of Ownership (TCoO). AMI illustrates the growing strength of IoT adoption in utilities, despite initial concern over which connectivity technology would win the market.

 

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Research by Market
Power & Energy Technology
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