Heat Meters Market Size, Share, Industry, Forecast and outlook (2024-2031)

Heat Meters Market is segmented By Type (Ultrasonic Heat Meters, Mechanical Heat Meters, Others), By Communication (M-Bus (Wired), Pulses, Radio, Others), By Application (Residential, Commercial, Industrial, Others), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2024-2031

Heat Meters Market Overview

The Heat Meters Market is expected to grow at a CAGR of 7% during the forecast period (2024-2031).

A heat meter is a device employed to measure thermal energy delivered by a source, by measuring the flow rate of the heat transfer fluid and changing temperature between its outflow and return leg. A heat meter has three key parts: a flow sensor, a calculator, and a pair of temperature sensors. The device is designed to operate at a nominal flow rate and, for a majority of times, it can be operated at or just below this flow rate. Mandatory legislative requirements to install heat meters has become the major driver for the growth of the global heat meter market. Additionally, governments around the globe are developing policies to encourage the use of heat conservation, due to energy import that is taking place in many developing economies. According to International Energy Efficiency, low-carbon district heating providing greater flexibility can decarbonize heating in buildings by deploying heat meters.

The global heat meters market is valued at USD XX million in 2023 and is forecasted to reach USD XX million by 2031, growing at a CAGR of XX% during the forecast period (2024-2031)

Heat Meters Market Scope

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Heat Meters Market Dynamics

The adoption of communication technologies is driving the market for heat meters

The adoption of communication technologies is driving the market for heat meters globally. The global heat meter market is expected to experience significant growth in the upcoming years, owing to the rising amount of digitalization of power utilities, increasing adoption of district heating systems, growing demand for accurate and reliable heat metering systems, and rapid development of commercial as well as residential applications. In 2019, there are more than 6 million heat meters units shipped across Europe, Middle East & Africa, and the Asia-Pacific with a particular focus on communicating meters. Just over 70% of heat meters shipped in EMEA and the Asia Pacific during 2019 were communicating meters. The shift to communicating meters remains steady, by 2025 it is forecasted that only one in five heat meters will be basic. This push for IoT solutions has been bolstered by legislation with Europe and China’s dominating influence on the Asia Pacific. Within Europe, the amendment to the Energy Efficiency Directive 2012 stated that from October 2020, all newly installed heat meters and heat cost allocators are to be remotely readable.

However, unregulated policy framework and privacy concerns are the major hindering factors of the global heat meters market. Heat networks in the UK are largely unregulated, but there is support for heat networks via various policy instruments. The hi-tech heat meters that are installed in the residential sector threaten to become a major privacy issue, according to the European watchdog in charge of protecting personal data.

Heat Meters Market Segmentation Analysis

The residential segment is predicted to hold a prominent share in the global market of heat meters

The global heat meters market has been segmented by application into residential, commercial and industrial. The residential segment is expected to hold the highest market share in the year 2020. The residential sector is set to grow owing to stringent regulatory mandates coupled with the accelerating adoption of district heating and cooling systems across the apartments. In addition, the increasing demand for an individualized billing system for measuring the energy consumption of a single unit across multi-occupancy buildings will encourage product penetration. As per the provisions of Heat Network Metering and Billing Regulation, the domestic buildings must deploy the sub-meters and more than one end consumer must be charged for the heat supplied. In the UK, the consumption of energy in the residential sector has increased from 35,689 ktoe in 2014 to 37,991.0 ktoe in 2018. This is expected to drive the heat meters market in the UK as residents reduce costs through reduced consumption, and stop subsidizing their neighbour's high usage. In 2019, around 4.26 million smart meters were deployed by large electricity and gas suppliers to residential buildings in Great Britain. Of these, smart heat meters were in the majority.

Global Heat Meters Market Geographical Share

North America is the largest market for heat meters with a share of nearly XX% in 2020

By geography, North America is expected to dominate the global heat meters market in the year 2020, growing with a CAGR of xx% during the forecast period. U.S. dominated the NorthAmerica heat meters market and was valued at USD XX million in the year 2020. The U.S. accounted for the highest market revenue share of XX% in the year 2020. The U.S. heat meters market size is set to exceed installation of 510 thousand units by 2024. Ongoing regulatory mandates toward the development of policies for energy metering along with a rising focus toward energy efficiency and cost-saving will accelerate the business growth. For instance, the U.S. Department of Energy has established policies and guidelines for utilities for metering the energy consumption in their federal buildings.

In addition, accelerating investments toward the development of the service sector will further boost industry growth in Europe. According to EU regulation EED 2012, The member states are mandated to issue policies pertaining to the installation of energy measuring equipment for individual apartment billing. For instance, in 2019, heat meter manufacturers and providers in the UK rolled out the next generation heat meters for residential, commercial, as well as industrial applications that follow the guidelines mandated by the Public Health England (PHE). Moreover, Ireland’s government announced a 2.3 million smart electricity and gas meter rollout over a multi-year period to all Irish consumers, in September 2018. Around 250,000 smart meters are set to be installed by 2020, and half a million in each of the four subsequent years.

Heat Meters Market Companies and Competitive Landscape

The global heat meters market is highly fragmented. There is massive competition with the presence of various small players in the market. Key players in the market include Kamstrup, Diehl, Danfoss, Landis+Gyr, Engelman, Siemens, Techem, Itron, Qundis, Ista, Zenner and Apator among others. Technological innovations and increasing investment toward research and development are the key strategies adopted by leading industry players. Mergers and acquisition with technology providers along with growing expansion across the emerging economies have further strengthened their position in the industry. For instance, in May 2018, The Danfoss team have announced a successful test with the narrowband Internet of Things wireless data communication. In August 2017, Measurement Canada plans to have thermal energy metering regulated similarly to gas and electricity by 2026.

COVID-19 Impact on Heat Meters Market

Negative impact on the heat meters market due to the lockdown in various countries

COVID-19 pandemic has reduced the profitability of businesses across all industries. Although the power sector has not been as negatively affected compared to other sectors, the electricity consumption by industrial and commercial customers is noticeably less. Moreover, the power sector has witnessed a falling demand and price reduction trend across the world. Various regions, including many European countries, are heavily impacted and have recorded all-time low electricity prices in the first quarter of FY’2020. Moreover, due to the severity of the COVID-19 outbreak, many industries are only focusing on essential work. This has resulted in a pause on electric component installations. Manufacturers of hardware devices in the heat meters market are facing several issues related to order closures due to global lockdown.

Utilities across the globe have announced the suspension of disconnection due to non-payment and delayed payment plans of customers impacted by the outbreak, which is resulting in earning downgrades. Lockdowns in most cities are expected to continue to curb the electricity demand, hampering the sales of utilities and other companies operating in the power sector.

Hence, the lockdown measures brought in to tackle COVID-19 has caused the heat meter rollout to deviate, off course, with uncertainty around the future trajectory of the programme. Although installations have begun to pick up as lockdown measures have eased, a return to normal levels is a long way off. The government has extended the date for suppliers to take all reasonable steps (ARS) to install heat meters to domestic and micro-business properties by six months to 30 June 2021. This is intended to allow a return to installing heat meters at volume as COVID-19 restrictions ease and help to address the short-term uncertainty for energy suppliers during the pandemic.