With manifold challenges in the U.S. energy industry – including concerns about the environment, rising costs of energy, depreciating infrastructure components, and economic pressures – state and federal governments are pursuing smart metering technology as a possible solution.

The American Recovery and Reinvestment Act of 2009, also referred to as the “Stimulus Bill,” allocated $11 billion in federal funding for smart grid initiatives – $6.5 billion to upgrade transmission lines and $4.5 billion for smart grid research and development projects on a 50/50 cost-share basis.

Smart grid technologies, via two-way communications, open the home to a variety of new service opportunities, ranging from in-home monitoring services to home networking infrastructure and smart appliances. As expected, these changes in the energy industry are bringing new players into this market and expanding the roles of its traditional companies. Many different types of firms have entered this area, hoping to capitalize on this growing market.

In the report Residential Energy Management – Company, Alliance & Technology Profiles, Parks Associates segments these firms into several categories, which together form the ecosystem of the market for residential products and services related to Smart Grid applications.

Utilities, profiled separately in the report AMI Fact Book and including investor-owned utilities (IOUs), municipal-owned utilities (Munis), and electric utility cooperatives (Co-ops), are naturally at the core of this ecosystem. They are deploying the Advanced Metering Infrastructures (AMI) necessary to enable these opportunities.

From there, the market is highly fragmented, which makes categorization a challenge. Categories can be fluid, but this effort helps identify opportunities and show the areas open for cooperation and competition.

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Communication Service Providers: These companies are currently focused on offering backhaul communication solutions, which enable utilities to collect information from meters for billing, monitoring, and management applications. However, many communication service providers are preparing to offer energy monitoring and management services directly to consumers, often as part of a bundle that includes broadband, video, voice, or other services.

Examples: Verizon, AT&T, T-Mobile

HAN Solutions and Component Providers: These companies are developing a wide range of systems, software, and devices for monitoring and controlling electricity consumption in the home. This category represents a variety of solutions and many different companies, whose numbers continue to grow.

For example, this category includes firms such as Control4 and HAI that traditionally have sold high-end home control systems but are now offering energy management solutions targeted at a much broader cross-section of the consumer market. Other firms focus on specific devices such as programmable communicating thermostats (PCTs) and electricity consumption monitors.

Examples: Control4, HAI, Cisco Systems, Google, iControl, Microsoft, Exceptional Innovation, Intamac, OpenPeak

This category also includes companies looking to offer end-to-end solutions from the utility through the meter, or other gateway, to all systems on the HAN. The ultimate market vision of the HAN encompasses all systems and devices in the home. Ideally, anything connected to a power outlet could be part of the HAN, capable of two-way communication via an end-to-end networking solution that runs through all systems in the home. Several firms and alliances, representing different technologies, are competing to form the foundation of the HAN.

Examples: HomePlug, INSTEON, ZigBee, Z-Wave, Watteco, HomeGrid

Metering Solutions Providers: These companies manufacture smart meters and the associated systems required by utilities to monitor, manage, and bill for electricity. They sell their systems to utilities, but their reach may extend into the home with solutions to control selected electrical appliances and systems.

Examples: Echelon, Elster Group, GE, Itron, Landis+Gyr, Sensus

Smart Grid Enablers: These companies develop systems and software solutions for utilities to manage and monitor their electricity distribution networks more efficiently. Their solutions essentially open the door for energy management opportunities within the home by providing utilities with more control over the grid.

Examples: Consert, GridPoint, Silver Spring Networks, Trilliant