Vendors of smart grid products will see combined revenue of $2.75 billion in 2010, according to a new market analysis commissioned and funded by the U.S. Department of Energy.
Cleantech Group, LLC, produced the 2010 U.S. Smart Grid Vendor Ecosystem Report, which highlights annual product sales in three key smart grid categories: Advanced Metering Infrastructure (AMI), Demand Response, and Distribution Grid Management.
The report was featured by Department of Energy Secretary Steven Chu at this week’s GridWise Global Forum where he unveiled a portion of the research findings as part of his keynote presentation to the conference.
In addition to providing insight into spending patterns and market share in the sector, the report draws attention to a number of emerging industry dynamics shaping the future of the smart grid ecosystem.
Amongst the key findings explored in the report is that the increasing data and communications sophistication of smart grid applications is driving dependence on integration and successful partnerships amongst a growing web of companies sharing the market. AMI vendors are at the forefront of this trend.
To illustrate these relationships, the Cleantech Group constructed an interactive, relationship mapping model of the smart grid vendor ecosystem. “We began by constructing a database of hundreds of relationships between smart grid vendors and then leveraged data visualization tools to explore patterns,” said Cleantech Group Vice President, and report Co-Author, Greg Neichin. “What we find are intricate webs surrounding metering and communication vendors while suppliers of traditional power systems, as well as home and building energy management equipment, are still working to weave themselves deeply into the fabric of the smart grid.”
$1.7B in venture capital has been invested into smart grid companies between 2007-2010 with the majority flowing into suppliers of AMI and home and building energy management products. These new entrants have had a profound impact on market dynamics and have driven both competition and cooperation between product specialists with point solutions and established vendors with more integrated product lines.
While venture-backed innovators have played an important role in the market, the report finds that the broader smart grid vendor landscape is comprised of companies both new and old, large and small, as well as domestic and international. In reviewing over 170 top smart grid companies, the report finds that 70% of companies involved in the sector were founded prior to 2000 with 25% of this entire list of leaders founded prior to 1980.
In addition, while the geographic concentration of startup companies involved in the market mirrors typical patterns for venture capital–with California, Massachusetts, and New York home to the vast majority of young companies–30 of 50 states are home to the headquarters of at least one of the companies on the broader list of leaders.
The smart grid market is drawing the attention of global leaders across a range of commercial sectors. Suppliers of power systems, energy services, IT, communications, building equipment, and consumer goods are all converging and positioning themselves in this competitive landscape. Many of these companies are using acquisitions to enter the market and the report finds the pace of consolidation increasing in 2010 with 30 smart grid M&A transactions occurring this year to date.
The complete report is available for free download at the link below.
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