Home energy management feeding frenzy continues with IBEC's Grid 2020 acquisition

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By Matthew Feinstein

In light of the host of recent energy management acquisitions by Siemens, Constellation Energy, Cisco, and Honeywell, International Broadband Electric Communications (IBEC) announced its acquisition of energy management, control, and communications firm Grid2020 (formerly known as WattShifters).

IBEC provides broadband over power line (BPL) products, while Grid2020 provides "virtual power plant" demand response capabilities, as well as wireless monitoring and control for grid operators and homeowners alike. IBEC expects the deal to enhance its current BPL system, which enables AMI, AMR and demand response.

The larger players listed above are vying for position in a market poised to pay dividends upon public adoption and implementation of favorable regulatory policies (the 2009 U.S. stimulus package committed $4.5 billion to the smart grid) – while showing that the cost of an acquisition is well worth the price of competing in the space.

Further, though it's clear that the consolidation of building energy management firms is an ongoing trend that will allow larger players with deep pockets to compete, what could mean more is that the positive return on investment from IPOs and acquisitions alike could push investors to continue feeding the smart grid.

We expect to see more acquisitions like this in the near future – as well as a spike in investment amidst favorable returns – as firms gear up for a home energy management market set to explode at a 56% CAGR from $36 million today to $520 million by 2015.

Matthew Feinstein is a research associate for Lux Research, which provides strategic advice and on-going intelligence for emerging technologies. For more information, visit the Lux Research site.

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