MarketsandMarkets has released a new report indicating that the Internet of Things (IoT) in the utility market is expected to be worth US$11.73 billion by 2020.
The market research report segments the market into analytics, security, smart grid management, predictive asset maintenance and CIS & billing systems.The value of IoT in the utility market currently sits at US$4.63 billion and is forecast to grow to at a Compound Annual Growth Rate (CAGR) of 20.4% (2015- 2020).
The need for IoT in utilities
According to the report, the increase in demand for Internet of Things solutions in the utility sector can be largely attributed to the increase in operational efficiency with less infrastructure investment, as well as integration of existing technology solution and hardware over a common platform.
IoT can increase visibility of grid performance, visibility of where the energy losses are and where savings can be made. It also allows energy to be managed in real time based on immediate data rather than historic patterns of energy use and it can open the door to energy services and payment tariffs that could dramatically reduce business energy costs and boost their sustainability credentials. [The Evolving Role of IoT For Energy Applications.]
The declining cost of IoT components and regional government initiatives for smart grid rollouts are some of the driving factors boosting IoT in the utility market. IoT is also eliminating barriers and allowing the utilities to target large audiences and enabling new business opportunities and delivery models.
Our recent webinar Internet of Things-Why Bother? highlights relevant IoT case studies and advanced thinking around the impact and utilisation of the IoT with a view to discerning the point of IoT on the grid.
IoT segmentation and regional growth
MarketsandMarkets points out that the IoT in the utility market is segmented into analytics, security, operations, smart grid management, predictive asset management, customer information system (CIS) and billing systems.
Trends in mobile, cloud and smart services, together with predictive analytics for business, conducive platforms for analytics and end-to-end automation are contributing toward accelerated growth in the market.
The report also segments the IoT in the utility market by region, including North America, Europe, APAC, Latin America and Middle East and Africa (MEA). In terms of regional growth, North America is expected to witness the highest market growth between 2015 and 2020.
Drivers in the North American market are smaller cooperative utilities allocating funds for IoT deployment, and a regional government initiative to offer low interest federal loan for large water infrastructure projects to utilities.
The Asia-Pacific region (APAC) is the fastest growing region after North America, as a result of public and private partnership models developed for infrastructure re-development in the major parts of the region.
APAC is expected to experience extensive growth opportunities in the next few years.
Marketsand Markets- Internet of Things (IoT) in Utility Market by Software (Analytics, Security, Smart Grid Management, Predictive Asset Maintenance, and CIS & Billing System), Platform, Service, Application, and by Region - Global Forecast to 2020