The Smart Gas Meter Market was valued at USD 1.84 billion in 2019 and is expected to reach USD 3.17 billion by 2025, at a CAGR of 9.5% over the forecast period 2020 - 2025. Smart meters boost a utility’s ability to precisely and timely bill customers for the quantity of gas used. The remote read-capability allows for smaller intervals between billing reads, better business preparation in understanding future revenue streams or for producing a continuous flow of capital. For instance, smart gas meters take readings every half an hour in a day and send it to the supplier.
Smart meters play a significant role in reducing theft and safeguarding utility revenues, which act as drivers to the market studied. In the case of smart gas meters, loses in most cases, are accounted for theft and leakage. Additional, they can offer readings on gas consumed for every additional hour of usage and the cost associated with it. Smart meters can also reduce labor costs and time as the data provided on smart meters is communicable both ways. These devices also support in-house displays that keep the consumer informed about the energy usage, in real-time. Some smart meters, through mobile app syncing, offer remote access to control and pay bills. The services are also accessible to pay-as-you-use customers who can consume based on prepayment and can recharge without missing the billing dates or overshooting the bills.
A case of Ireland’s Plan for smart meter installation by 2024 estimates that, as customers get the smart meters, billings will increase by about EUR 5.50 a year to help fund the project, which is expected to amount to EUR 1.2 billion. The charge is added to a customer’s network fee each year, for a period of 20 years. However, it is estimated that the potential savings associated with these meters can aid consumers in reducing their energy costs by around EUR 20 a year, which, on a national level, is a significant saving.
Hence, instead of a physical presence to check the reading on the meter, the data from a smart meter is transmitted to the utility department, which can take action based on the gas being consumed by a user and act accordingly. This reduced dependency on labor and time can save certain costs, indirectly affecting the utility revenue. Similarly, simultaneous replacement of electricity and gas meters reduces the cost of both smart meter (gas and electricity) roll-outs. A shared communication infrastructure of gas and electricity meters is expected to be more economical to the consumer and the utility provider.
The most prominent limitation in the smart metering market is the non-availability of capital funding. Smart systems are comparatively more expensive than the regular metering equipment employed by most of the service providers and users. It has additional cost in enabling communication ability and maintaining the regulatory compliance for such obtained products. These systems utilize digital components and connectivity systems that enable them to operate and transmit data. This increases the cost of the metering equipment.
Moreover, different smart meters are designed with various parameters, based on operational requirements and consumer requirements, and in turn, increasing their costs. Furthermore, smart meters are complicated equipment that need skilled labor to handle and install. All these factors increase the overall cost of the systems, making them more expensive than regular metering systems.
Most of the nations around the world have limited budgets allocated for the deployment of smart systems. Therefore, most of the companies are either opting for different systems, or the cost of installing the systems are being passed on to the consumer. Thus, many users are opting out of the employment of smart meters. Additionally, security concerns related to user data is one of the factors contributing to the slow growth of smart metering systems. Many of the users in European nations have been considering opting out of smart metering systems.
Remote access, data protection, and other concerns are resulting in causing concern among users. Security remains the primary issue with users and companies. Recent data breaches and increasing threats from hacking organizations are affecting the employment of these systems. Thus, high costs and security concerns are restraining the growth of this market.
Key Market Trends The Residential Segment is Expected to Register a Significant Growth
The residential end-user segment is a huge segment for smart gas meters, given the number of households that individually have gas meters installed. For instance, according to the US Census Bureau Survey, revised in November 2018, there are more than 127.5 million family households and 44.5 million non-family households in the United States (as of 2018).
Similar is the case for the household size across different countries in the world, making the residential sector a significant segment, especially in urban areas. Such a vast number of customers who are ready to be served presents a massive potential for the application of smart gas meters in the residential segment of the market. To adopt and make use of smart gas meters, the market needs supporting communication infrastructure to be present to make use of smart meter features.
For instance, the United Kingdom has a Data Communication Company (DCC) to provide a national-level communication channel for the smart meters to communicate with the energy suppliers. In India, Tata Communications, through its public Internet of Things (IoT) network, is providing connectivity to Mahanagar Gas Limited’s smart gas meters, which, as of April 2018, plans to set 5,000 gas meters in Mumbai. Tata communications rolled out the LoRaWAN network in 38 cities, which indicates the growth in investment in supporting infrastructure capabilities. It also shows the necessity of the presence of a communication network to enable smart devices adoption.
The United States is a relatively matured market in terms of smart gas meter installations, which was driven majorly because of the smart city initiatives. Prominent vendors like Itron, Honeywell, and GE, among others, are increasing their revenues by collaborating with energy companies across Asian regions.
Currently, around 50% to 60% of the installed gas meter base in the United States are automated reading devices. Approximately, 52% of all the new meters sold in 2016 are AMI or AMR solutions. This share is predicted to increase more during the forecast period.
Advanced metering infrastructure includes meters that record and measure electricity usage at hourly intervals, which provide the data to both the customer and utility department at least once a day. AMI installations vary from the basic hourly interval meters to real-time meters that have been equipped with built-in two-way communication, capable of transmitting and recording instantaneous data.
While the change of pace for utilities is now faster than ever across almost all areas of their business, this acceleration is especially evident in their communication needs increasingly specified to support smart grid operation.
Competitive Landscape The smart gas meters market is highly competitive and consists of several major players. In terms of market share, a few of the major players currently dominate the market. These major players with prominent shares in the market are focusing on expanding their customer base across foreign countries. These companies are leveraging on strategic collaborative initiatives to increase their market share and increase their profitability. The companies operating in the market are also acquiring start-ups working on smart gas meters market technologies to strengthen their product capabilities. In March 2018, Sensus (the Xylem brand) was selected by Nicor Gas, the largest natural gas distribution company in Illinois, as the technology provider for its meter modernization program. The program is one of several investments that Nicor Gas made, in order to modernize and improve its natural gas infrastructure.
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168 pages •
By Global Industry Analysts
• Jul 2020
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