The report, The Smartest Opportunities in the $16 Billion Smart Grid, breaks the smart grid down into three segments – measurement and communication, analysis and services, and local management.
Using the Lux Innovation Grid framework, it ranks 25 smart grid companies according to how they score in technical value, business execution, and maturity.
“Rather than focusing on the environmental benefits the smart grid will reap, our report analyses which companies are best positioned today to capture value from smart grid opportunities,” says Jacob E. Grose, a Senior Analyst at Lux Research, and the report’s lead author. “It answers the question: ‘Who should I be partnering with today?’”
Based on interviews with 25 smart grid , the key observations of the smart grid report are:
- The measurement and communication segment has the early momentum. Expected to top US$5bn by 2015, smart meters and supporting networking infrastructure technologies are seeing the earliest growth, as governments and utilities recognise that better management of electrons first requires better management of information across the grid;
- The analysis and services segment is poised for explosive growth. Led by demand response applications, analysis and services revenues could make up the largest piece of the smart grid pie by 2015. Currently below US$1.4b, smart grid companies in this sector will likely see revenues grow at a 30% CAGR, leading to revenue totalling over US$6.7bn by 2015;
- Smart grid corporations that mobilise quickly will dominate via economies of scale. Few smart grid companies are differentiated by the technologies they’re fielding. Thus, one of the few remaining competitive advantages open to market participants is how well their technology scales. Competitors unable to establish early commercial relationships with utilities will likely get squeezed out of the smart grid market before long.
“The smart grid offers huge opportunities for investors, companies and utilities. But many of those opportunities are fast-moving targets,” says Grose. “The most successful players will be those who can navigate a shifting landscape of market segments, and partner with companies able to capitalise on opportunities before their competition.”
Lux Research provides strategic advice and on-going intelligence for emerging technologies.