Via GreenTech Media’s Green Light blog, a somewhat sobering report on the outlook for publicly-traded smart meter companies. As the article notes:
“…Tuesday’s smart grid news includes a report casting a dim light on publicly traded smart meter makers’ prospects for the rest of 2009, as well as a win for smart grid networking startup Silver Spring Networks in landing a renowned economist as a board member.
First, the bad news. According to a Tuesday research note from Pacific Crest Securities analyst Ben Schuman, publicly traded smart meter makers Itron (NSDQ: ITRI), Echelon (NSDQ: ELON) and ESCO Technologies (NYSE: ESE) will have a rough rest of 2009.
The main reason is the global economic downturn, which is likely to slow the rollout of smart meter deployments in North America and Europe through the rest of the year, Schuman said. That could outweigh the deployments those companies already have in hand, he said (see 8.3M Smart Meters and Counting in U.S.).
But ironically enough, the $3.9 billion in smart grid stimulus grants the Department of Energy has promised is also playing a role in the slowdown, he said. That’s because utilities are holding off on signing contracts as they wait to see if they can get a 50-percent matching grant from the government (see DOE Issues Rules for $3.9B in Smart Grid Stimulus Grants).
So far, DOE has announced $47 million in grants for smaller scale demonstration projects (see DOE Hands Out $47M For Smart Grid Demos). But out of a pool of $3.375 billion for larger commercial-scale projects such as smart meter deployments, the first awards aren’t expected until late this year, and some may not come until next year.
And there’s bound to be plenty of competition for them. Of the utilities that have made public their hopes for smart meter stimulus grants, Texas utility Oncor has asked for $317 million, Baltimore Gas & Electric is seeking $200 million and Maryland-based Pepco Holdings is seeking $254 million (see Oncor Makes $317M Smart Grid Pitch and news reports here and here).
Those requests add up to $771 million, or about one quarter of the $3.375 billion available – and they’re only a handful of the stimulus grant applications no doubt being prepared by utilities around the country. And of that total, Schuman estimated that no more than half will go to smart meter deployments, with the rest going to other smart grid projects.
At the same time, privately held companies like Silver Spring Networks, Landis+Gyr and Sensus have been signing contracts and, in Schuman’s opinion, taking market share from their publicly traded counterparts.
Landis+Gyr and Sensus make smart meters, while Silver Spring makes wireless mesh communications networking technology that is inserted into smart meters made by others.
Redwood City, Calif.-based Silver Spring has been one of the more successful smart grid startups, with about $160 million raised to date and projects with utilities including Pacific Gas & Electric Co., Florida Power & Light, Pepco Holdings, Commonwealth Edison Co., Sacramento Municipal Utility District and Australian utilities Jemena Electricity Networks and United Energy Distribution (see Green Light post).
On Tuesday, Silver Spring announced that renowned economist Laura D’Andrea Tyson had joined its board of directors. Tyson was former President Bill Clinton’s national economic adviser and is a board member of Morgan Stanley, AT&T Inc. and Eastman Kodak.
Last month, Silver Spring enticed Judy Lin to leave her job as senior vice president of Cisco’s Ethernet Switching Technology Group to join the startup.
That hire was one in a series of moves by smart grid startups to bring on board executives from related industries, many of them former utility bigwigs.”
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