The market for software that enables insight into customer energy consumption is on the verge of rapid growth.

According to GTM Research’s latest report, Customer Analytics at the Grid Edge: Market Landscape, Forecast and Key Trends, the U.S. market for this software will surpass $1 billion by 2018 and $2 billion by 2023.

FIGURE: Projected Utility Spend, Base Case, 2016-2025

Source: Customer Analytics at the Grid Edge

While advanced metering infrastructure (AMI) deployments and other networked devices such as smart thermostats have led spending to date, the growth of distributed energy resources is fueling more improvement in these technologies. Utilities are looking toward advanced analytics solutions to inform the integrated resource planning process.

According to the report, customer analytics projects are increasing in size and moving from pilots and demonstration projects to larger-scale deployments.

“The rapid improvements in the customer experience in other industries is driving the need for utilities to better understand their own customers’ needs and behaviors and offer more relevant and personalized solutions,” said Steve Propper, GTM Research director and lead author of the report. “The next two to four years will see the largest growth in customer analytics solutions, particularly for more advanced applications that have both customer and operational benefits.”

The report breaks down customer analytics software vendors into three groups: emerging solution providers, existing energy management players, and large infrastructure entrants. The report notes that there are opportunities for market consolidation or partnerships with non-traditional players.

FIGURE: Customer Analytics Vendor Landscape

Source: Customer Analytics at the Grid Edge

“Beyond 2018, we expect a true energy marketplace to develop,” said Propper. “Customer analytics software will optimize grid performance, drive new revenue streams for utilities and third parties, and expand customer engagement opportunities across the industry.”


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