The global research and advisory firm Cleantech Group has released its 2010 US Smart Grid Vendor Ecosystem Report, which explores the key market dynamics shaping the emerging smart grid landscape.
Commissioned and funded by the Department of Energy, the study highlights $2.75 billion in annual product sales in three key smart grid categories: advanced metering infrastructure (AMI), demand response, and distribution grid management.
“Smart grid” refers to the use of digital technology, sensors and smart meters to update both the distribution and transmission systems of an electrical grid that has changed little since the time of Thomas Edison. It will use electricity more efficiently, partly by giving consumers more information and control over their energy use.
As well as 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.
For instance, it reveals that $1.7 billion 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, however, the report finds that the broader smart grid vendor landscape comprises companies both new and old, large and small, domestic and international.
In reviewing over 170 smart grid companies, the report finds that 70 percent of companies involved in the sector were founded prior to 2000 with 25 percent 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 the 50 states are home to the headquarters of at least one smart grid company.
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 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 download at the following link:
