London. U.K. — (METERING.COM) — December 10, 2009 – Europe’s smart meter market, including automated meter infrastructure (AMI), IT systems and communication technologies, is expected to reach $11 billion by 2015, according to a new study by Frost & Sullivan.
The study, which underscores smart meters as representing the first step towards energy management, points out that the European smart metering industry is a fledgling industry with sporadic developments seen in certain countries of Europe. The difference between different regions has so far been the extent of involvement by the government in defining the technologies. There are debates on the entire market modeling, on who installs the meters, who owns them and who pays for them. For example, in the Netherlands the government proposed that the distribution companies own the meters and would be responsible for installing them, whereas in the United Kingdom and Germany retailers are leading from the front.
The study identifies the key drivers for smart metering in Europe as the increasing price of electricity encouraging the need to reduce expenses, well defined legislations and directives enabling utilities to adopt smart meters, the imperative of smart meters for implementation of smart grids, and instrumental role of smart meters towards efficient energy management.
However, market restraints include lack of clarity on an appropriate business model, the global economic slump slowing new investments towards smart meter and grid technology, and a lack of standardization in communication protocols leading to problems of interoperability.
As competition in the smart meter market intensifies, product differentiation is important, commented Frost & Sullivan research analyst Vikas Ravindran. Further, smart meter manufacturers need to move from a product-based to a services-based model to achieve a competitive edge.
“Investments in meters alone will not yield higher returns. In order to rapidly gain market share, manufacturers need to customize their entire AMI solution for consumers,” said Ravindran.