One of the main drivers of M2M technology is its ability to reduce energy costs. An ABI Research report titled 'Home Automation and Monitoring' (August, 2011) revealed that approximately 1.8 million home automation systems were shipped globally in 2011, and that number is expected to increase to over 12 million by 2012. This highlights a growing consumer need to decrease energy expenditure.

With climate change high on the agenda, particularly in countries like Australia where the federal government's new carbon tax is expected to result in an average 16 per cent increase in electricity bills from July 1, 2012 – a massive push towards the deployment of large-scale smart metering is underway.

According to a new report from Pike Research (January 5, 2012), global smart meter shipments reached 19.2 million in the third quarter of 2011, representing a 5.3% increase over 2Q 2011. Key vendors have been selected to provide utilities with meters, communications modules and meter data management services for extensive smart meter and smart grid deployments. As a result, annual global spending on smart grid technologies, including smart meter implementations, as well as upgrades to transmission and distribution infrastructure, is expected to reach $65 billion by 2017 (M2M Magazine. May 7, 2012).

A smart grid study recently released by ABI Research demonstrates the need for significant upgrades to effectively deal with today's antiquated, and highly inefficient, electricity infrastructure. It says most of the electric utility infrastructure deployed in the industrialized world was built between sixty and eighty years ago; and was designed to provide customers with as much energy as they could consume. With the demand for power increasing each year, the grid cannot safely and reliably manage current and future loads without substantial improvements.

Municipalities and governments across the globe are fostering projects that will eventually lead to the substitution of traditional meters with smart meters which allow efficient remote consumption reading and billing. The United Kingdom's government, for example, is planning a mass-scale smart meter rollout for 2014 that is expected to deliver 7 billion pounds in benefits, while also giving consumers more control over the use of energy at home and at work (M2M Daily. June 17, 2012).

Much of the momentum in this area is coming from the utilities industry itself with the implementation of solutions such as remote meter readings offering: reduced manual meter reading costs, improved customer care, precise readings to assist with bill enquiries and reduced energy costs for customers.

IMS Research, a leading analyst firm, forecasts that more than 100 million smart meters will be deployed with HAN (Home Area Network) gateways in the next five years. An integrated HAN gateway enables communication between the smart meter and the devices within a home energy management system, such as an in-home display or smart appliance. The Victorian Government in Australia has mandated the inclusion of integrated HAN gateways, and is set to offer subsidized IDHs to smart meter customers. In France, smart meters (or 'Linky' meters, as they are referred to in France) are deployed without an integrated HAN gateway, but with a common port to enable the retrofit of a communications module. In a press release issued on June 7, 2012, Lisa Arrowsmith, senior analyst with IMS Research, concludes "There is growing momentum behind not only deploying smart meters with integrated HAN gateways, but also towards retrofitting existing smart meter installed bases with the functionality to participate in energy management systems."