Ready or not, here comes smart metering

Jan 1, 2010 12:00 PM,

Roger Allan Contributing Editor

The semiconductor industry is gearing up for the grand plans of an advanced metering infrastructure.

That's a lot of smart meters!

In the U.S., 18 million households, representing about 13% of the total, will get smart meters within the next 3 years as part of the U.S. Government's grants to upgrade the nation's electric grid.

Smart meters aren't just a U.S. phenomenon. China is implementing a $596 billion stimulus program for smart grid applications that is expected to make use of 170 million smart grid meters within the next few years. Italy and Sweden have already implemented smart electric-grid meters. France, Spain, Germany and the U.K. are expected to complete AMI roll-outs using smart electric meters within the next 10 years.

Analysts at Pike Research are forecasting a $19.5 billion market for smart meters as they're deployed worldwide by 2015, which works out to a compound annual growth rate (CAGR) of 19%. One reason is that over 45% of the North American and European installed base of traditional meters is up for replacement, breaking the traditional 15-to 20-year meter replacement cycle.

Market research firm ON World says that 100 million new smart meters are planned to be installed worldwide within the next five years. Nearly half of these will have a home-area network (HAN) gateway for in-home energy management and program services. ON World says some $21 billion will be spent on the smart metering infrastructure over this time span.

ABI Research is equally bullish on the smart meter market. It is predicting that 212 million smart meters will ship worldwide by 2014, with the market taking off in the next two years. One reason is that the EU recently enacted a “Third Energy Package” which aims to make every European electricity meter smart by 2022. There are also tantalizing hints of a massive 300 million electricity meter upgrade over the next five or so years in China.

Any way these figures get sliced, they point to mushrooming sales of smart meter chips. According to TI microcontroller products director of ultra-low power systems Mark Buccini, if all the 500 million electric meters worldwide were to be replaced by smart meters over the next 10 years, the semiconductor IC industry would realize sales of $7.5 billion. TI believes that only 6% of electricity meters worldwide are presently automated.