Smart Meter Market Trends

Smart meters are an important technology for the modern electric power industry and are revolutionizing the way customers interface with energy grids. By enabling rapid two-way communications between electric companies and their customers, smart meters provide new and expanded services and enhance energy grid resiliency and operations.

A recent report from The Edison Foundation Institute for Electric Innovation estimates that 75% of US households use smart meters as of the end of 2020. This represents an impressive milestone in the transition to more advanced power technology, and recent trends indicate that the deployment of smart meters is continuing to accelerate over time.

Growing Prevalence

The growing amount of smart meters in the US is illustrative of Americans’ desire to embrace the new technology. Total deployments have increased from 99 million in December 2019 to 107 million in December 2020. By the end of 2021, it is estimated that there will be 115 million smart meter deployments in the US.

According to the report, more than half of US states have achieved a rollout of between 50% and 100%, with particular prevalence across the southern and western portions of the US. Utilities have made great strides in their deployment in recent months, with 58 investor-owned electric companies having fully deployed smart meters.

Leveraging Smart Meter Data

The growing focus on smart meters in recent years comes as no surprise to those familiar with the benefits of the technology. Electric companies are able to leverage smart meter data to monitor the health of the energy grid, restore electric service more quickly when outages occur, integrate distributed energy resources, and deliver energy services and solutions to customers.

Benefits are not limited to the power companies themselves, as customers also see numerous advantages when switching to smart meters. By establishing a digital link to their electric companies, customers can realize expanded services, such as smart home energy management, load control, budget billing, usage alerts, outage notifications, and time-varying pricing. On circuits that have switching devices or automation, faults are isolated and outages can be avoided. In case of outage, a large percentage of customers can be restored within minutes.

Industry Examples

Many US power companies are leading the advance into smart meter technology programs, and those that are quick to develop solutions are seeing immediate advantages.

A prime example of customer-focused data communication can be found at Florida Power and Light (FPL), which has deployed a smart meter-enabled energy dashboard to help residential customers understand how and why their electricity usage changes over time. The dashboard provides personalized solutions to help customers control their energy consumption, accessible via FPL’s website or a standalone app. Data from a customer’s smart meter is synthesized to compare usage over time, project bills for upcoming months, and identify energy consumption by major household appliances. Not only can customers leverage this service themselves, but FPL’s Care Center uses the dashboard to assist customers who call in with bill concerns.

American Electric Power company AEP Ohio is another example of a modern utility embracing smart energy. AEP Ohio has recently completed a massive deployment of smart meter technology by launching phase 2 of its smart grid project in the summer of 2017 following the successful phase 1 project which rolled out 132,000 smart meters in select areas of central Ohio. Phase 2 included a deployment of 900,000 additional meters, which had an estimated rollout period of four years. Due to an impressive organizational effort, advanced metering infrastructure installations were considered operationally complete in October 2020, after only 3 years and 2 months.

Growing Investments

According to a recent study by the Edison Electric Institute (EEI), of the $139.8 billion that energy companies were projected to invest in 2020, more than $41.8 billion was for distribution systems alone. Electric company distribution resource plans increasingly identify and prioritize grid modernization investments to improve visibility into the distribution system, enhance resiliency, manage outages, and provide better customer solutions. These improvements are made via both software and hardware enhancements, and smart meters are found at the intersection of the two.

As the distribution grid continues to grow and to evolve, smart meters remain the fundamental building block. As stated in the Institute for Electric Innovation report:

As electric companies continue to manage, operate, and invest in an increasingly digital energy grid, a critical next step is to continue to utilise the data generated from smart meters as a strategic asset to improve grid operations, use customer resources more efficiently and offer new services to customers.

Lucasys Is Here to Help

As utilities grow their investment into critical infrastructure, Lucasys is here to help navigate the tangle of regulations that makes accounting for new construction difficult. Our knowledgeable team of consultants has the experience to organize and standardize accounting and tax data and systems to adapt for the latest regulatory rulings, and our software makes it simple to address the latest issues facing the utility industry. To learn more about how Lucasys can help, visit https://www.lucasys.com/deferred-tax-solutions.