What will drive investment in the next 60 million smart meters?
The largest investor-owned utilities in the United States tend to receive the most media coverage when it comes to deploying advanced metering infrastructure. Whether it’s due to missteps during deployment or exciting applications taking advantage of technology, it’s easy to focus on the big guys as they ink contracts millions of yards away.
But it’s actually cooperative utilities that have the highest smart meter penetration as a percentage of customers, according to GTM Research’s analysis of new data from the US Energy Information Administration.
When it comes to volume, investor-owned utilities are still responsible for the greatest number of meters deployed. But recent contracts are mostly small with cities or cooperatives, a trend that will likely continue until unidirectional AMR technologies have reached the end of their lifespan.
There are nearly 60 million smart meters in the United States. Many of them were installed using stimulus grants. Last year, only 5 million meters were deployed, the lowest level since before the stimulus dollars started to be used. This year is also shaping up to be a relatively slow year for the installation of smart meters.
The meter picture in the United States is mixed in terms of technology and regional deployment. States with meter mandates that apply to investor-owned utilities, such as California and Texas, have some of the highest penetration rates.
Still, about half of all U.S. states are only about a fifth of the deployment process, GTM Research found when reviewing EIA data. Four states are responsible for more than half of all smart meters in the United States
For many utilities, this is because they have invested in unidirectional smart meters, also known as automatic meter reading (AMR) technology. Since AMR has already reduced the need for meter readings, it can be difficult for utilities to justify the use of two-way communicating thermostats if manual meter readings are not part of the cost-benefit analysis. Many utilities wait until AMR technology reaches the end of its useful life before investing in the latest technology.
However, the business case could change for some utilities as granular data is increasingly leveraged in a utility’s operations. As regulators and customers demand more from their energy suppliers, the MAI can be a tool to help provide more personalized services. For co-ops in particular, these business advantages may be easier to justify.
To take full advantage of the Reforming the Energy Vision initiative currently underway in the state, New York utilities are finding they will need smart meters for more granular data collection. Con Edison, for example, will launch a 4.7 million meter deployment next year. It will be the first US utility to collect and deliver near real-time data to its customers. Other major New York utilities have also filed smart meter pricing cases.
Smart meter installation numbers are expected to start rebounding later this decade, as states like New York and Massachusetts pass regulatory changes to encourage adoption of the technology. Some other large deployments, like at Ameren Illinois, Commonwealth Edison, DTE Energy and FirstEnergy Utilities in Pennsylvania will also complete major smart meter deployments by the end of the decade.
By then, many AMR systems could reach the end of their useful life and the case for smart metering systems could grow, particularly if regulators allow utilities to operate them beyond their model of electricity. traditional service.