Silver Spring Networks has landed its first contract outside the United States – a deal to enable an eventual 1 million smart meters in Australia with its networking technology.

The Redwood City, Calif.-based startup announced the deal with Australian utilities Jemena Electricity Networks and United Energy Distribution on Wednesday. The utilities hope to have 1 million Silver Spring-enabled smart meters from U.K.-based meter maker PRI installed by 2013.

The news adds an international contract to the many Silver Spring has landed with U.S. utilities – Pacific Gas & Electric Co., Florida Power & Light and American Electric Power among them – to enable two-way communication between utilities and customers, thus making the meters "smart."

It's a booming business in the United States, which has an estimated 140 million traditional power meters that could be upgraded, though so far the number of smart meters installed is in the low millions, according to recent estimates (see Smart Meter Installations Grow Nearly Fivefold). Canada has another estimated 10 million endpoints.

But North America is far from the only market. In fact, Europe likely holds the current lead, with at least 27 million smart meters installed by Italian utility Enel and millions more in other nations, according to a March report from ABI Research (see Notes From a National Smart Grid Experiment).

Australia, with a population of about 21 million and an estimated 14 million "end-points," or homes and businesses served by power meters, isn't such a large market by comparison, noted Ben Schuman, an analyst with Pacific Crest Securities.

Still, landing the contract "validates that their solution can be applied to markets outside North America, which opens up a huge incremental opportunity for them," he said.

Specifically, he noted that the Australian deal indicates that the nation is a good candidate for Silver Spring's radio frequency mesh technology.

Silver Spring equips meters with radios that mesh together in a 900-megahertz frequency range and send data to central collectors for "backhaul" over utility wide-area networks -- a typical means of smart meter communications in the United States (see Smart Grid: A Matter of Standards).

In contrast, European utilities have mostly opted for power-line carrier technologies that send data over existing power lines, Schuman said. Italy's Enel, which uses technology from Echelon Corp., is one example, he said. French utility EDF plans to use its own power-line carrier technology to link an eventual 35 million endpoints in a massive smart meter project, he said.

Power-line carrier is more cost-effective in Europe because utilities there tend to serve more homes per transformer than in the United States, he said. Because those transformers interfere with power-line carrier signals, they must be bypassed with repeater devices, at costs that tend to be too high in U.S. markets, he said (see Will Smart Grid See a Push for Power-Line Networking?).

Silver Spring's Australian presence could grow, said Eric Dresselhuys, vice president of markets. The Australian state of Victoria, which the utilities serve, has mandated that 2.5 million smart meters be installed within its borders, he said.

 "There is now a national plan for smart meters in Australia," he added. "We suspect that all of the large utilities throughout the country are going to work to be in compliance with those requirements."

Other Australian utilities are trying different smart meter technologies. San Francisco-based Grid Net, which has developed technology for installing WiMax Internet routers in smart meters from partner General Electric, is testing them with SP AusNet and Energy Australia (see GE Offers WiMax Smart Meter Solution).

The utilities are also considering power-line carrier and cellular networks for their smart meter deployments, according to ZDNet Australia.

Silver Spring has raised about $160 million since 2007, including $90 million since October (see Silver Spring Grabs $75M and Green Light posts here and here).

The company expects to see about 2 million meters with its technology deployed by the end of 2009 (see Green Light post). PG&E, its biggest customer, had installed about 150,000 Silver Spring-enabled electric smart meters as of February, and plans to have 5.3 million electric meters installed by 2011, most of them using Silver Spring technology. 

As for PRI, the U.K.-based smart meter maker is involved in projects in Europe, the Middle East and New Zealand as well as Australia, and also makes home energy monitoring devices.