Editor’s note: this guest article highlights findings about Zpryme’s new study on the AMI market. Zpryme will be co-presenting with conference Chair and ICP Strategies founder, Jon Arnold (News - Alert) at the Summit Grid Summit regarding their current research on renewable energy.

As the U.S. looks to reduce its energy consumption, it appears that consumer knowledge of their energy use is key for reaching that goal. A recent study published in Proceedings in the National Academy of Sciences suggests that consumers often underestimate their energy usage, and consumers having a more accurate knowledge of their energy consumption tend to use less energy. Advance Metering Infrastructure, or AMI, helps bridge the gap between perceived and actual energy use by enabling improved communication between the utility company and the customer. 

AMI is a component of the Smart Grid network that refers to the measurement and collection system that keeps track of utility consumption and output, using communication technology, such as broadband, fixed radio frequencies, and landlines. AMI is often synonymous with, and encompasses “smart meters,” which provides real time data to both consumers and utility companies allowing for individuals to better manage energy consumption.

Policy makers agree that AMI is a crucial tool in decreasing America’s energy consumption and costs, as evident in the $818 million of stimulus money given to 31 AMI projects in 2009. Support for AMI has continued in 2010 as Central Maine Power Company (CMP), Accenture (News - Alert) in collaboration with Oracle, and Landis+Gyr have collectively signed substantial contracts to install AMI networks in Maine, Maryland, and Texas, respectively. 

Updating the grid is expected to be largely beneficial to consumers by increasing their knowledge of energy demand and prices. According to Kenneth W. DeFontes, president and CEO of Baltimore Gas and Electric (BGE recently teamed up with Accenture and Oracle (News - Alert) for smart meter implementation throughout Central Maryland), updating to AMI is expected to save their 1.2 million customers $2.5 billion over the lifespan of their flagship Smart Grid initiative.

With the support of national and local governments, there are many emerging and established companies trying to get a piece of the AMI market. Leading the way in AMI technology is Itron and Silver Spring Networks. Itron has paired with utility companies since 1977 to increase meter efficiency and has secured many AMI contracts. Recently, Itron has collaborated with Cisco (News - Alert) to provide a faster communication for AMI systems by utilizing Internet Protocol (IP) technology. Silver Spring Networks has also taken advantage of IP technology since its inception in 2002. Currently many AMI systems use radio frequencies, which do not relay information as quickly and efficiently as IP. 

Although AMI is an emerging market, and it is still unclear as to which company and what technology will dominate the field, a recent Tantalus Systems-sponsored Smart Grid Insights report developed by Zpryme gives the clean tech sector and consumers insight into the future of AMI. According to the report, AMI is projected to grow from its current $2.54 billion to $5.82 billion in 2015, with an 18% compounded annual growth rate (CAGR). The prevalence of “smart meters” in the AMI market is expected to subside in the next five years from 47% to 39% in 2015. Data management and communication systems are expected to gain importance, with an expected increase to $707.4 million from $270.8 million for customer data management and $934.1 million from $334.8 million for communication systems over the next five year period. 

The study in Proceedings in the National Academy of Sciences indicates that an informed consumer is a smart consumer. AMI is about empowering the consumer: regulating energy consumption while seeing a savings in the day-to-day bottom line. During these unpredictable economic times, consumer awareness of energy prices coupled with the guidance of companies in the AMI space could be the best tool in curtailing energy consumption. 

For more information, please contact us at smart.grid@zpryme.com, subject-line: “Smart Grid Insights.”

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Edited by Erin Monda