The global advanced metering infrastructure market size was valued at USD 11.8 billion in 2021. It is estimated to reach an expected value of USD 34 billion by 2030, growing at a CAGR of 14.1% during the forecast period (2022–2030). Smart meters, communications networks, and data management systems are all part of the advanced metering infrastructure (AMI), which enables two-way communication between utilities and customers. The system makes it possible to do several crucial tasks that were either impossible or required manual labor in the past, including monitoring voltage, connecting and disconnecting services, detecting tampering, and automatically and remotely measuring electricity use. Advanced metering infrastructure also helps save energy sources and other utility stations, lower their carbon footprint by supporting energy-saving initiatives, and improve outage management services, thus favoring the overall market scenario.
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Shift Toward Energy Efficient/Saving Alternatives to Favor Market Growth
Many developed and developing nations are facing problems with energy efficiency. In a global survey by the American Council for an energy-efficient economy, 16 countries, which account for more than 71% of the global energy consumption, were ranked lower than 70. These countries also contribute the majority share of carbon emissions. Thus, nations worldwide focus on decreasing their emissions by focusing on renewable energy sources and increasing the existing network's efficiency by deploying smart metering systems and other technologies.
Adopting smart grids and smart metering systems offers ways to reduce industry-wide energy waste. Energy providers may track how much electricity is being used in real-time by implementing smart metering devices at various grid points. Smart meters are expected to grow significantly during the forecast period, fueled by the UN climate target and related energy efficiency measures. Thus, the demand to improve operational efficiency and decrease power losses is expected to create market opportunities.
Favorable Governmental Initiatives to Bolster Market Growth
Favorable government initiatives across the world are driving the market's growth positively. The American Recovery and Reinvestment Act of 2009 includes funding for the Smart Grid Investment Grant (SGIG) program. More than 50% of the USD 8 billion in the SGIG was designated for AMI. The five large smart meter manufacturers in the United States, namely, Elster, Landis+Gyr, Sensus Energy, and Itron, received at least USD 30 million each in ARRA funds or matching funds. Furthermore, metering is the crucial component of various Indian government programs in distribution, including the Smart Metering National Programmer (SMNP), the integrated Power Development Scheme (IPDS), and the UjwalDiscom Assurance Yojana (UDAY), and the National Smart Grid Mission (NSGM). These schemes promote smart metering to enhance discom's billing and collection efficiency. Hence, such initiatives fuel the market demand.
High Initial Costs to Restrict Market Growth
Despite its widespread benefits, deploying ASR presents significant challenges, including high upfront investment costs, integration with other grid systems, and standardization. Unlike conventional meters, smart meters use digital components and connectivity systems that enable them to operate and transmit data. This increases the cost of smart metering equipment. Furthermore, different smart meters are designed with other parameters based on the operational requirements and consumer requirements, thus, increasing their prices.
Managing budgets or finding financing elsewhere is a challenge while investing in new technology, and the return on investment needs to be precise. Most nations around the world have limited budgets allocated for the deployment of smart systems. Therefore, most companies are either opting for different systems, or the cost of installing the systems is being passed on to the consumer. Such factors hamper the market growth.
Need for Utility Operations to Spur Market Opportunities
Utility companies are facing growing competition, and smart decision-making is becoming crucial. Therefore, the advanced metering infrastructure (AMI) market will likely grow over the forecast period. It helps utilities adapt to changing customer demand, including widespread distributed energy and increased adoption of electric vehicles.
Furthermore, the next generation of utility networks, including AMI, powered by Edge computing, over 5G networks with scalable, elastic IoT cloud capabilities, is expected to enable advanced streaming analytics to digest and process usage data and millions of messages to assess grid conditions in real-time. These advances in data analytics, AI, and communications help accelerate grid modernization to create new value areas for utility operations and transform the customer experience.
The global advanced metering infrastructure market is segmented by type, end-user, and region.
By type, the global advanced metering infrastructure market is segmented into Smart Metering Devices (Electricity, Water, Gas), Solutions (Meter Communication Infrastructure), Software (Meter Data Management, Meter Data Analytics, Others), Services (Professional-Program Management, Deployment and Consulting and Managed).
Smart Metering Devices account for the largest market share and are estimated to grow at a CAGR of 12.6% over the forecast period. Meters or modules with communication capabilities (either unidirectional or bidirectional) incorporated within the meter or attached to the meter are included in smart metering solutions. Smart meter adoption on a big scale is a massive step towards technologies that are prepared for the future. Smart meters offer two-way real-time communication between DISCOMs and consumers through GPRS technology, paving the path for the distribution and smart grid. This has led to various active projects developing smart meters to effectively manage and utilize gas, water, and electrical resources. Smart meters, which allow two-way communication between the meter and the central system used by the utilities, have seen an increase in use due to the significant worry of rising energy consumption.
Services are the fastest-growing segment. Distribution and retail utilities benefit from end-to-end smart meter deployment, operations, data collecting, analytics, consumer engagement, and more. A dependable, secure, and affordable cloud-based alternative to a conventional on-premise smart metering solution is provided to customers by Siemens Managed Applications and Services. Customers who use the tested platform can take advantage of various apps, such as MDM, Analytics, and Prepay. Moreover, companies such as Capgemini in the market offer Smart Meter Network Operation (SMNO) Managed Business Service. The company has directly managed the mass deployment and installation of over 23 million smart meters and related infrastructure worldwide. It provides SMNO services to over 6 million meters in the project and ongoing operational support settings. In line with such development, service-oriented smart metering solutions have become an area of interest for companies, including end-to-end managed services and standalone software subscriptions.
By end-user, the global advanced metering infrastructure market is segmented into Residential, Commercial, and Industrial.
The Residential segment accounts for the largest market share and is estimated to grow at a CAGR of 14.37% over the forecast period. Advanced Metering Infrastructure (AMI) deployment, such as smart meters, significantly benefits the residential sector by eliminating the hassle of monthly or quarterly meter readings. For significant years, meters have been placed outside the buildings to make it easy for utility personnel to take readings. Smart meters can, however, be placed anywhere inside the household. Multiple countries are witnessing developmental activities regarding installing advanced metering infrastructure in the residential sector. For instance, in June 2020, Tata Power Delhi Distribution Limited (TPDDL), India, announced that it installed 200,000 smart meters, including its residential segments in India. It supplies electricity to a population of almost seven million in North Delhi, with 1.7 million registered consumers. Such instances drive the segment growth.
The Industrial segment is the fastest growing. The industrial segment uses advanced metering systems in all industrial spaces. Deployment of advanced metering systems provides solutions to curb energy wastage in industrial applications and enables enterprises to monitor electricity usage at multiple points in the grid continuously. Over the past few years, there has been a growing focus on energy efficiency across various industries for industrial applications. Legislations, for example, the EU 2020 Energy strategy, that mandate an increase of 20% in energy efficiency by 2020, are driving the need for the deployment of advanced metering infrastructure. The industrial sector has also witnessed an increasing demand for reducing operational costs in various industries, including mining, oil and gas, chemical, shipbuilding, and machinery manufacturing, thus driving the adoption of smart industrial meters for heavy industries. With the sectors slowly transitioning toward industry 4.0 and IIoT, the ASR market is expected to have a positive growth over the forecast period.
By region, the global advanced metering infrastructure market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.
The Predominance of Asia-Pacific in the Global Market
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Asia-Pacific accounts for the largest market share and is estimated to grow at a CAGR of 14.5% over the forecast period. India will likely emerge as a significant player in the Asian market, owing to the latest introduction of a centralized ASR procurement and financing process. As a result, the country is expected to surpass Japan as the second-largest ASR market in Asia by 2023. Smart grids that can provide consumers with affordability and other advantages are also being made possible by the Indian government. Implementing Advanced Metering Infrastructure is the first step in realizing Smart Grids (AMI). The ASR involves smart meters, communication networks, meter data acquisition systems, and meter data management systems. Furthermore, the country is also improving its smart grid infrastructure to help tackle an out-of-control electricity theft problem and enhance reliability. Such factors contribute to market growth.
Europe is the second-largest region and is estimated to reach USD 6.4 billion by 2030, growing at a CAGR of 13.7%. The world's most significant working population resides in Europe, necessitating a sustainable infrastructure. Government agencies in Europe are enforcing legal and regulatory requirements for the deployment of smart meters and the construction of smart grids. Furthermore, the regional market players are capturing several growth opportunities the country provides to expand its market presence by forming strategic partnerships or collaborations. For instance, Itron, Inc. collaborated with EDSR Limited, a global smart metering solutions provider, to develop and launch a SMETS2-compliant gas meter for the United Kingdom. Such factors contribute to market growth.
The North American market is expanding due to favorable government initiatives and rising spending on installing smart meters. The American Recovery and Reinvestment Act (ARRA), which included money for the Smart Grid Investment Grant (SGIG) program, has been the biggest driver of the smart meter market and the implementation of smart meter infrastructure in the United States, which is the dominant player in the region. After the government mandate was adopted more than five years ago with the primary goal of reducing peak-time demands, Canada has also seen the widespread adoption of smart electricity meters. Therefore, rising demand and strict rules encourage end-user adoption of smart meters.
The market growth is also increasing due to the growing population and rise in the number of water applications in the United States and Canada. Several features offered by smart water meters, like time bases, synchronized meter readings, and system monitoring and control, are expected to extend the market. Also, targeted programs to the end-users will likely benefit from leveraging smart electric meters for energy efficiency. For instance, Pacific Gas & Electric in the United States reported ASR targeting a home retrofit program delivered 3.5 times more energy savings in the targeted homes. Additionally, the integration of smart electric meters with technologies such as data analytics is expected to further fuel the market's growth in the region.
Key players in the global advanced metering infrastructure market are