Utilities increasingly plan to roll out the next wave of advanced metering infrastructure (AMI).

Many of the more than 115 million “smart” electricity meters deployed at US customer sites since 2000 are beginning to show their age, and utilities are increasingly developing replacement plans.⁴ AMI 2.0 features faster processors, more memory, modular communication capabilities, and longer-lasting batteries.⁵ Residential meters are becoming edge computing devices that can better understand how electricity is being used or generated behind the meter. And that could be increasingly important as consumers add solar panels, electric vehicles, or battery storage and seek to interact with the grid.

Environmental, social, and governance (ESG) reporting continues to gain momentum

Enhanced ESG reporting and decarbonization commitments will likely progress further in 2023, as companies see a growing need to identify rapidly changing environmental and societal disrupters and address them. Currently, US company disclosures and metrics aren’t uniform, and third-party review or assurance is not widespread. But that could begin to change in 2023, as the SEC proposed a new rule in March 2022 that would require public companies to annually disclose certain climate-related financial statement metrics, information related to climate-related risks, and greenhouse gas (GHG) emissions in public disclosure filings.⁶

Battery storage deployments set to accelerate despite supply chain snags

US battery storage is poised for faster growth in 2023, as renewables’ share of generation rises, extreme weather events become more frequent, and new legislation continues to improve its value proposition. Battery storage costs are expected to continue rising in 2023, though that trend could reverse longer term and is unlikely to dampen demand. Supply chain kinks could continue into 2023, largely due to the paucity of battery and critical mineral suppliers and concern about unethical labor practices, especially in cobalt mining.⁷ But alternate battery technologies could scale up for the electric vehicle (EV) market, helping reduce the demand for lithium-ion batteries.⁸

Power and utility companies see opportunities to reap value from clean hydrogen

There has been a frenzy of activity in green hydrogen, and it’s likely to accelerate in 2023 and beyond, partly due to new incentives in the Inflation Reduction Act (IRA).⁹ “Clean” hydrogen prices will likely become competitive with conventional hydrogen in many US regions,¹⁰ though its use may still be infeasible for applications that require new transportation, storage, and other infrastructure. Power companies are evaluating hydrogen options with an eye to those most immediately economically feasible. Producing clean hydrogen using excess renewable or nuclear generation is often an attractive option.

Utilities likely to sharpen focus on preparing for electric vehicle growth

Utilities will likely accelerate their EV planning and programs in 2023, as US EV market share exceeded 6% of new car sales in H1 2022, the IRA offered new EV tax credits, and federal and state governments set ambitious goals for EV penetration.¹¹ Some of the thorniest challenges to meeting these goals could be for the auto and battery industries to produce enough EVs and batteries, given supply chain constraints and IRA tax credit eligibility requirements for EVs.¹²