Tough Economy Drives Meter Sales
The most significant challenge facing the market is the timing of long-awaited economic recovery. In general, the market appears to be "holding its breath" moving into the first quarter of FY2011. Clearly now out of the woods yet, discretionary purchases are still being delayed, as are risky or longer ROI-type strategies. Commercial customers are still underfunded and challenged to find financing for major investments, and the commercial new construction market continues to stagnate. Faced with these realities, commercial property managers are turning over every rock to find ways to differentiate their properties and upgrade where they can. Not surprisingly, energy conservation and green investments are at the top of their list.
Metering has become a bigger part of every project. Interfacing meter data to Building Automation Systems (BAS) is one of the fastest-growing segments. The ability to optimize a building control system for HVAC or lighting with energy consumption data, both real-time and historical, offers a quick payback and allows customers to save money today as well as into the future. The old adage that "you can't manage what you don't measure" is becoming even more urgent in today's competitive facility landscape.
Any product that can reduce energy consumption, shift peak demand, shift peak demand, avoid carbon emissions or facilitate compliance with LEED certification, Energy Star, etc. will be well received by customers. These products include energy-efficient lighting, occupancy sensors, variable speed drives, power factor correction equipment and more. Electric submetering already plays a major role in these market drivers, a condition that will only intensify with time.
Meters can be used up front to identify areas of waste or reveal opportunities to conserve energy through base-line analysis, which positions customers to optimize their purchase of these various energy conservation devices to save the most. Once the equipment is installed, the same metering can be used to measure and verify (M & V) the savings, which allows customers to quantify their savings and go back to management for additional funding for more energy conservation equipment. The final part of the metering paradigm is that it allows customers to satisfy their requirement under various green initiatives such as LEED points for M & V, primarily in the Energy & Atmosphere (EA) subcategory.
This condition will continue to play well in the federal as well as commercial sector, where the hottest segments include what we affectionately call the "MUSH" market-Municipalities, Universities, Schools and Hospitals. In addition to being very energy and environmentally conscious, these markets also tend to have funding for projects.
From a geographical perspective, utilities around the country are seeing caps on their electricity rates expire from the date they were first put into place during deregulation. Anticipated rate hikes as high as 25% in Pennsylvania and other states will only increase the need for energy conservation and more metering products to measure and verify compliance with ever-tightening program guidelines.