New technology adoption, changing regulatory environment drive record global heat meter market
A recent study released by IMS Research, recently acquired by IHS Inc., shows that global billing heat meter market revenues surged in 2011 to roughly $730 million, a growth of almost 15% over 2010 levels. Key market drivers are new technology adoption and a continually maturing regulatory environment which promotes end-use measurement for the accurate billing of energy.
While ultrasonic and electromagnetic (static) metering technology has been seen for some time in the market for larger heat meters, adoption is now occurring for smaller heat allocation meters. Heat service companies in Germany, Europe’s largest market, started to install ultrasonic metering into billing and allocation metering systems in 2010 and 2011. This is a notable occurrence given this region’s history of using cheaper and less accurate mechanical meters, which must be removed/recalibrated every five years due to existent regulation.
Research director Michael Markides commented, “With such strong regulation in place in Germany, service companies could never justify paying for more expensive metering systems. Cheaper mechanical types were installed every five years, thus eliminating any incentive to pay more for increased meter lifetime, durability or accuracy. Having a service company invest in more expensive static metering technology shows labor costs, energy costs and added accuracy benefits reaching a justifiable convergence point for static meter investment.”
While further adoption of static technology is driving revenue growth, new legislation and other government initiatives worldwide have been significantly growing shipments for heat meters (as well as heat cost allocators). Recent market development has mainly centered on China, where meter shipments have grown by more than 100% per year from 2007 onwards. In 2011, shipments plateaued to just over 2 million units. New construction and the government’s focus on replacing coal as a source of residential heating are primarily responsible for this market surge. However, with new construction slowing in China, IMS Research has a tempered forecast from 2012 through 2017.
Markides added, “The growth in China alone over the past four or five years has essentially doubled the global heat meter market, however, regulatory change in other countries is now taking effect. For example, in Russia all large buildings on the district heating line must have a hub (district) meter installed. This has grown the market in Russia by more than 50% in 2011 over 2010, with continued growth forecast until 2017. Surpassing Russia, Turkey is forecast to be the world’s fastest growing heat meter market. Here, legislation is in place which promotes both the installation of heat meters and heat cost allocators, while new construction and increasing geothermal heating investment are also poised to drive market growth.”
Data for this analysis is drawn from IMS Research’s latest analysis of the global heat meter market, The World Market for Heat Meters – 2012, which published in May of 2012.