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Smart meter installations to decline in U.S. over next 2 years

Smart meters eventually will be ubiquitous globally over the next few decades, but, interestingly enough, installations of smart meters in the U.S. will actually sharply decline over the next two years, before they pick back up, according to Pike Research. Smart meter shipments in the U.S. will drop by a whopping 42 percent between 2011 and 2013, and after 2014 will start to gradually rise again.

One reason for the drop is because utilities in California — one of the leading states to install smart meters in the U.S. — will have finished many of the smart meter installation projects that they started a few years ago. PG&E installed close to 9 million meters by the end of 2011, and will finish its deployments by the middle of 2012. Southern California Edison has installed 4.3 million smart meters to date (close to its end goal) and likewise plans to complete all of its installations in 2012.

Another reason for the decline is that the Department of Energy gave smart meters a temporary injection a couple years ago. In late 2009, the DOE released billions of dollars for utilities’ smart grid programs, many of which included smart meter installations — 18 million meters were supposed to be installed with these funds. Many of these projects have gotten underway and either have already been completed or will be completed in the short term.

Pike Research vice president Bob Gohn writes that smart meter shipments over the next two years are facing “very dynamic and even volatile regional market characteristics, with dramatic shifts over the forecast period and very different communications technologies and standards. These swings make the market both enticing and challenging for smart meter and communications vendors.”

While this short term decline in U.S. smart meter shipments might cause hiccups for smart meter vendors and smart meter network makers, globally smart meter markets look just fine. While less than 4 percent of the world’s 1.5 billion electricity meters were smart in 2008, that figure grew to over 18 percent by 2012, and is expected to jump to 55 percent by 2020, according to Pike Research.

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