July 23, 2012
Prepayment plans – the option or obligation to pay in advance for a service – are widely used in many industries, including mobile telecommunications and, in many countries, electricity service. Prepaid programs have not been offered by many electric utilities in the United States until recently. This is likely to change in the coming years, with the advent of new metering technology, communications solutions, and pressures for improved customer service. According to a recent report from Pike Research, a part of Navigant’s Energy Practice, the number of prepaid electricity meters shipped worldwide will grow from just over 23 million in 2012 to 33.5 million in 2017. The worldwide prepaid meter device market will reach $1.2 billion in 2012, but will contract over time as utilities shift away from more expensive prepaid meters with a disconnect collar to increasingly rely on less costly smart meters with embedded prepay functionality. By 2017, utilities around the world are expected to spend about $743 million on smart prepaid meters, representing a 38% drop in the overall value of the market.
“A number of market forces are contributing to a growing demand for prepaid electric services across the globe,” says senior research analyst Marianne Hedin. “They include recognition of the significant benefits of prepaid programs to consumers and utilities, improved energy efficiency, and technology advances, particularly the advent of smart grid technology and the rollout of Advanced Metering Infrastructure (AMI) and smart meters. Those advances will lead to significant cost reductions for prepaid meters.”
The economic recession in many parts of the world is actually having a positive impact on the adoption of prepaid systems, Hedin adds, as consumers look for ways to reduce their electricity consumption and thus cost.
Utilities in the United States have been very slow in offering prepaid electric services to their customers. This is particularly true of investor owned utilities (IOUs), largely because of the lack of support from state utility commissions. In many states, the barriers to prepay are coming down as smart meters are being installed and the objections to prepay among consumer advocates and regulators are fading away. Today, 20 to 30 IOUs are in the pilot stage of offering prepaid programs.
The report, “Prepaid Electric Metering”, analyzes the global opportunity for prepaid electric metering, including an in-depth assessment of the hardware, software, and services segments of this market. The study examines the business drivers, challenges, and competitive dynamics that will define the next generation of prepaid electric metering in the smart grid age. Key industry players are profiled, and detailed market forecasts for units and revenue are provided through 2017. An Executive Summary of the report is available for free download on the Pike Research website.
Contact: Richard Martin
* The information contained in this press release concerning the report, “Prepaid Electric Metering”, is a summary and reflects Pike Research’s current expectations based on market data and trend analysis. Market predictions and expectations are inherently uncertain and actual results may differ materially from those contained in this press release or the report. Please refer to the full report for a complete understanding of the assumptions underlying the report’s conclusions and the methodologies used to create the report. Neither Pike Research nor Navigant undertakes any obligation to update any of the information contained in this press release or the report.