When eMeter’s Chris King sent a note estimating current and future installations (see box), I realized smart meters have been progressing much faster than most think. When I ask utility pros how fast and far smart meters will penetrate in the U.S., most guess 20 to 25% by 2020. In fact, we’ll hit 25% in a couple of years according to Chris’s estimates. Many authorities cite 25% as the tipping point when a technology reaches critical mass. Implications: Good news for companies selling things that build on or add on to smart meter infrastructure : Distribution automation - Home energy management - Meter data management - Outage management
But then comes the pause
Today’s rapid growth is a once-in-a-lifetime “elephant swallowed by a snake.” Stimulus funding caused a bulge in orders that can’t be sustained. We will inevitably see a plateau or even a dip in shipments. Smart meters will still be shipping at a great rate… but that rate will look puny in comparison to the bulge. Implications: Investors who had previously bid up the stocks of metering companies will now bid them down. (Why do so many investors extrapolate only in a straight line? We first learned this lesson in the 1600s during the Dutch tulip bulb bubble. Five hundred years later and they still haven’t gotten the memo ?) The experts at Pike Research predict the slowdown will hit in 2013. And several financial analysts have already downgraded Itron and other meter makers, stating they expect a slowdown in 2012. The makers of smart meters and smart grid communications gear will suffer some short-term distress. Even the companies listed above who will benefit when meters hit critical mass could be hurt if they staff up to fast or don’t have the resources to ride through the pause.
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Secretary Chu announces two million smart grid meters installed nationwide
