US utility meter market growing 3%/year
Despite price and performance barriers, the US utility meter market is projected to grow at about 3%/year, new research shows. But emerging energy management services, aggregators, and energy service marketers expect low prices and are demonstrating strong resistance to buying yesterdays' technology, says Frost & Sullivan.
Despite price and performance barriers, the US utility meter market is projected to grow at about 3%/year, new research shows.
�In the past, vendors have had the luxury of modeling themselves around captive utilities, says Frost & Sullivan analyst Patrick Hodges. "With the guaranteed rate of return disappearing, the traditional price model is also disappearing."
He says research shows innovative vendors are likely to win market share with such devices as communication-enabled, low-priced meters to offset the dwindling price-performance ratio of single-phase residential meters.
Frost & Sullivan estimates the electricity, gas, and water meter segments of the meter market are expected to generate $1.03 billion in revenues in 2006, up from $864.8 million this year. The industry is projected to ship about 11.2 million meters this year, up from 11 million in 1999.
Up to now US firms have led a relatively protected life. But the research suggests globalization of world economies is about to pick up the pace and translate into intense competitive challenges within the US market.
Hodges says players may be required to reassess their marketing strategies, including lowering prices and more creative marketing, to counter the impact of new metering technologies. Emerging energy management services, aggregators, and energy service marketers expect low prices and are demonstrating "strong resistance" to buying yesterdays' technology, the research showed.
Automated meter reading technology increased the scale of data-collection efficiency several times over and spawned a new class of equipment and service providers that would come to change the technologically obsolete distribution infrastructure, says Frost & Sullivan, a Mountain View, Calif.-based consulting firm. But incumbent meter vendors have been slow to recognize changes in the market and integrate original communication into their meters.
Hodges suggests partnership ventures with field service companies, electrical contracting firms, and heating and air conditioning companies could provide new growth areas to meter manufacturers. Opportunities are also likely to emerge for players that develop inroads into net-metering, prepayment metering, and distributed generation
Because the meter market is not subject to wide shifts in demand, loss of market share will be caused by bad decisions and missed opportunities, Hodges concludes.