UTILITY companies are set to spend billions on new billing and customer care software for smart grids, according to a new report by Innovation Observatory – and companies selling telecommunications software can grab a 15 per cent share, according to St Ives-based research organisation Innovation Observatory.

Utilities' legacy billing systems were designed for simple flat-rate tariffs and batch processing of manual meter readings based on quarterly or monthly billing cycles, the firm says.

“These systems cannot handle the massive increase in meter readings that smart meters will produce, and are not suitable for the more complex charging schemes, such as time-of-use (TOU) and dynamic pricing, that the hourly or half-hourly readings from smart meters will enable.”

So suppliers of charging and billing software for the telecoms industry, where sophisticated pricing and charging models have been used for many years, already have mature systems that can cope with many of the challenges that utilities face in introducing smart meter based services.

Their solutions are commercially proven in processing high volumes of transactions in real time, and have the flexibility to handle the types of sophisticated time-, usage-, and event-based tariffs that are envisaged for smart grids.

“Investing in new charging and billing functionality is just one part of the massive smart grid jigsaw, but some important decisions lie ahead for utilities,” said Catherine Viola, author of the report.

“Their choice of billing and customer care software will influence how well prepared they are for the smart grid world and the type of player that they can become.”

The 80-page report, Meeting the Challenges of Smart Grid Charging and Billing, provides in-depth analysis of utilities' smart grid charging and billing needs and identifies their strategic options for installing the new functionality required.

It is available from Innovation Observatory on www.innovationobservatory.com/reports/latesttitles for £1,500 (plus VAT).