In 2022, Transforma Insights’ Forecast Insight report titled ‘Electricity Smart Meters: government sustainability initiatives will drive 2.2 billion connections in 2030’ revealed that across the globe, the total number of Smart Electricity Meter connections will increase to 2.2 billion by 2030. In turn, this will generate USD11.1 billion in terms of recurring IoT revenue.
While the growth trajectory of Smart Meters is impressive, the bigger question that looms large is if this deployment is equitable across the globe. In this blog, we will unravel the realities of the regional imbalance and dominant technologies associated with Smart Electricity Meters, apart from their advantages and risks.
Simply put, Smart Electricity Meters are devices that record the consumption and generation (if relevant) of electricity at a particular location and send this data to electricity providers. They are deployed in both commercial and residential settings. Although the development of these smart devices began in the 1970s, it was only after Italy’s country-wide rollout in the early 2000s, that large-scale adoption of these meters gained momentum.
The biggest advantage of Smart Electricity Meters is that they allow the transmission of readings without having any physical access to meters. This means Smart Electricity Meters are more efficient to monitor than traditional meters. They can also avert high losses to power distribution companies by preventing theft of electricity and negligence such as poor billing.
Smart Meters can also help providers to detect the location of any electricity theft in the grid in real-time. When combined with the ability to remotely control and cut off the electricity supply in case of any emergency or failure to pay bills, this greatly improves grid safety and significantly reduces losses due to theft. At times, these devices can transmit usage data and detailed feedback to the users as well, which may encourage users to adjust their habits to lower their energy bills and encourage them towards more energy-efficient behaviour.
On the flip side, the deployment of smart electricity meters is quite an expensive procedure, right from the stage of planning up to that of the final installation and further maintenance. Several rollouts have also required the update or replacement of different generations of smart electricity meters mid-rollout (such as in the UK) and have incurred substantial expenses in the process. The additional expenses incurred through a smart meter deployment are either paid by the government or by local utilities, ultimately leading to higher taxes and/or energy costs.
At times, owing to the correct measurement of energy consumption, Smart Meters can result in increased electricity bills, which is not favoured by the general populace. For instance, in 2020 India’s EESL (Energy Efficiency Services Limited) reported an average increase of almost 25% in Smart Meter billing compared to conventional meters.
Unlike the traditional market scenario (where developed countries account for a majority of deployments), now developing countries are increasingly adopting these smart devices and represent a significant share of new deployments. In fact, it is now estimated that by next year, Latin American countries will represent a bigger market than North America. Moreover, for the first time, the triad of China, Europe and North America will hold less than half of the market. While several developed countries have finished their rollouts of Smart Meters, ongoing concerns about energy prices and energy security is spurring adoption by those countries that were till now resisting their deployment.
In terms of dominant technologies in specific regions, until now 5G mMTC has been mostly limited to China, but it is now being adopted to support Smart Electricity Metering in other countries as well. In 2021, 83% of 5G mMTC Electricity Smart Meters were deployed in China, but in 2023 this percentage has dipped to 48%. According to forecasts by Transforma Insights, apart from China, Europe and South-East Asia will be the other major destinations for 5G mMTC meters.
In Europe, 2G shipments still remain prominent and held greater market share than 5G mMTC in 2022. Europe has become the last major market for 2G devices and represents an 89% share of new 2G Electricity Smart Meter shipments. However, we estimate that 2G shipments will have completely ceased by 2029.
In conclusion, it can be said that the number of deployed Smart Electricity Meters will continue to steadily rise in the future, and looking at the current trends it can be observed that the adoption of these smart devices is gradually shifting more towards developing countries, although traditional markets will remain significant (particularly due to replacement cycles and the fitting of meters to newly built properties). In terms of dominant cellular technology, 5G mMTC is gradually expanding outside its main market today (China) and it is expected that South-East Asia and Europe will prove to be fertile opportunities for this technology.
If you are interested in the growth of the global IoT market and the opportunity over the next 10 years, join the team from Transforma Insights for our webinar ‘Are We Nearly There Yet?: Annual Update On Transforma Insights’ IoT Market Forecasts’ to hear about which applications and verticals will dominate in future, which technologies will be used, which countries will see the biggest growth and what is the revenue opportunity.