A new report from Navigant Research examines global smart city business opportunities for utilities, providing market forecasts, segmented by region and smart city technology type, through 2027.
Utilities around the world are becoming increasingly integrated with smart city deployments, driven by the need to generate new revenue opportunities. Smart city applications such as electric vehicle (EV) charging infrastructure and services, smart street lighting, smart buildings, distributed energy resources (DER), and smart city communication networks all offer significant new business opportunities for utilities. According to the report, the annual utility revenue opportunity in smart cities is expected to grow from almost $45 billion in 2018 to over $100 billion by 2027.
“With increasing energy efficiency and utilization of DER cutting into their bottom line, utilities must position themselves as innovators and generate new revenue streams to remain profitable in the 21st century,” says Ryan Citron, senior research analyst with Navigant Research. “Smart cities represent a significant opportunity for utilities to develop new business lines, extend their partner ecosystems, and establish new bonds with local communities.”
While utility interest and involvement in smart city deployments is increasing, several key barriers to greater market participation remain, according to the report. These barriers include regulatory challenges, utility business culture and organizational structure, technical and operational challenges, and the lack of a business case for some smart city applications. The configuration of these challenges is unique to each utility given its history, location, culture, and current asset base. However, there are many lessons to learn from early leaders already establishing their footprint in the smart cities market.