We’ve got a lot more clarity into the different ways one could go about answering that question, with the launch of the GTM Scott AMI Market Tracker. The smart grid market service takes a deep dive into the raw numbers of North American smart meter communications deployments, starting with Monday’s launch of collected figures through the first quarter of 2012.
So, who’s winning? The answer to that question, according to the latest and greatest numbers, is 'It depends.'
Let’s take the category that most smart grid industry watchers are talking about when they use the term “smart meter.” That’s an electric meter that’s capable of full two-way communications, rather than the older, one-way communicating digital meters known as AMR (automated meter reading).
As for the two-way communicating electric meters, known under the term AMI (advanced metering infrastructure), the current leader in North American deployments is not one of the legacy metering companies, but startup Silver Spring Networks. As of the first quarter of 2012, the Redwood City, Calif.-based company held a 23 percent market share, leading North American metering heavyweights Itron, at 20 percent, and Sensus, at 19 percent, respectively.
That’s quite a feat for the 10-year-old company, which builds networking technology that goes into meters built by other vendors and has landed major deployments with big utilities like Pacific Gas & Electric, Florida Power & Light, Pepco, Oklahoma Gas & Electric, Commonwealth Edison and Progress Energy. Right now it is connecting 22 million meters deployed or under contract, putting it far ahead of other companies that provide similar third-party communications services, such as Trilliant and SmartSynch.
The question for Silver Spring is whether it can turn that market share into a profitable and growing business. The company has continued to report growing revenues and shrinking losses in the 11 months since it filed plans for an IPO, but it still hasn’t pulled the trigger on those plans.
In the meantime, we’ve got a very different set of North American market leaders when it comes to networking both AMI and AMR electric meters. According to Monday’s report, the leader in that category is Itron, the Liberty Lake, Wash.-based metering giant, with more than 46.6 million units in the field as of the first quarter of 2012.
That’s nearly twice the deployments of Landis+Gyr, with 23.4 million units, and far ahead of third-place Aclara, a subsidiary of Esco Technologies that’s an important contender in North America. Silver Spring’s 11.9 million meter chipsets puts it in fourth place in these terms.
Of course, measuring total installed base isn’t a good measure of who’s been installing the most smart meters lately. In those terms, Itron, which fell behind Silver Spring in annual deployments in 2009, has seen its share pick up in recent years, and retained its lead in the first quarter of 2012.
In second place for the quarter, and among the top three contenders for the past few years, is Sensus, the Raleigh, N.C.-based metering company with a point-to-multipoint networking topology that differs from the mesh-based networking that Silver Spring and most of its North American competitors rely on. Sensus may be for sale, according to anonymous reports from October. The company has declined to comment on the report, which set an $800 million to $1 billion price tag for the privately held company.
Another big meter maker that's definitely for sale is Elster, the publicly traded German electric, gas and water metering company, which is seeking $2.3 billion for a sale of its assets from majority owner CVC Capital to Melrose PLC, a British buyout firm. Speculation that a massive grid company like Siemens or ABB may be in the market for one or another metering giant has been rampant since last year's $2.3 billion acquisition of Landis+Gyr by Toshiba, with Itron and San Jose, Calif.-based Echelon names as some more potential targets.
It’s important to note that these new deployments are on a downward trend. Monday’s report projects that 13.2 million smart meters will be shipped by the end of 2012, compared to 13.5 million in 2011 and 15.7 million in 2010. That’s not surprising, considering that the billions of dollars in stimulus funding for smart grid projects, which helped boost investment to record levels in the past few years, has largely been spent. Even so, there's room for growth. Monday's report estimated that 62 million of the 145 million electric meters in the United States will be "smart" by the end of 2012, leaving more than half of the country awaiting upgrade eventually.
At the same time, water and natural gas utilities need smarter meters as well, and annual deployment figures have been growing, not shrinking, over the past several years. Neptune and Badger, two smart water meter vendors, are among the report’s top-ten vendors, alongside AMI/AMR meter providers like Itron, Elster and Sensus. These companies also network gas meters, along with Landis+Gyr and Aclara.
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