SOURCE: Lux Research

Lux Research

February 02, 2010 08:00 ET

Smart Grid Opportunities Set to Explode

Market to Reach $15.8 Billion, but Only a Few Select Firms Will Take Full Advantage

BOSTON, MA--(Marketwire - February 2, 2010) - Countries around the globe plan to add intelligence to their power grids, as investors, corporations and policymakers enthusiastically agree about the benefits of smart grid technologies. Indeed, a new report from Lux Research projects that the smart grid market will grow from today's $4.5 billion to $15.8 billion by 2015. Still few can predict how it will evolve, so Lux Research maps current and future opportunities in this fast-growing field, and identifies how individual companies are positioned to capitalize on them.

Titled "The Smartest Opportunities in the $16 Billion Smart Grid," the report breaks the smart grid down into three segments -- measurement and communication, analysis and services, and local management. Then, 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 analyzes which companies are best positioned today to capture value from smart grid opportunities," said 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?'"

After defining the smart grid's main categories and eleven subsegments the report forecasts the market size for each using a rigorous bottom-up analysis -- based on interviews with 25 leading smart grid companies -- and a top-down approach, which includes external factors such as governmental grants. Among its key observations:

--  The measurement and communication segment has the early momentum.
    Expected to top $5 billion by 2015, smart meters and supporting
    networking infrastructure technologies are seeing the earliest growth,
    as governments and utilities recognize that better management of
    electrons first requires better management of information across the

--  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 $1.4 billion today, companies in this sector will likely see
    revenues grow at a 30% CAGR, leading to revenue totaling over
    $6.7 billion by 2015.

--  Corporations that mobilize 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 market before long.

"The smart grid offers huge opportunities for investors, companies and utilities. But many of those opportunities are fast-moving targets," said Grose. "The most successful players will be those who can navigate a shifting landscape of market segments, and partner with companies able to capitalize on opportunities before their competition."

"The Smartest Opportunities in the $16 Billion Smart Grid" is part of the Lux Alternative Power and Energy Storage Intelligence service. Clients subscribing to this service receive ongoing research on market and technology trends, continuous technology scouting reports and proprietary data points in the weekly Lux Research Power Journal, and on-demand inquiry with Lux Research analysts.

About Lux Research

Lux Research provides strategic advice and on-going intelligence for emerging technologies. Leaders in business, finance and government rely on us to help them make informed strategic decisions. Through our unique research approach focused on primary research and our extensive global network, we deliver insight, connections and competitive advantage to our clients. Visit for more information.

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