Smart meters help consumers avoid wasting money on energy efficiency

Analysis of a randomised-controlled trial on a sample of almost 2500 Irish households revealed one surprising result: compared to the control group, households provided with a smart meter, detailed feedback on usage, and time-of-use pricing reduced investment in energy efficiency projects.

While this unexpected development appears treated by the researchers as an embarrassment to be overcome, the result should be celebrated. Despite spending less on energy efficiency projects like insulating blankets on water heaters or extra attic insulation, treatment-group households still reduced power consumption both at peak and overall as compared to control-group households. Or, to put it the other way, control-group households spent more on energy efficiency projects and still consumed relatively more power than consumers provided with smart meters, feedback, and time-of-use pricing.

Or, to sum it up more pointedly, giving consumers better information and better incentives helps consumers avoid wasting money on feel-good energy efficiency projects.

Citation: McCoy, Daire, and Sean Lyons. “Unintended outcomes of electricity smart-metering: trading-off consumption and investment behaviour.” Energy Efficiency (2016): 1-20. http://doi.org/bmtr.

[HT to Alessandro Rubino who discussed the article in Nature Energy.]

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4 thoughts on “Smart meters help consumers avoid wasting money on energy efficiency

  1. Smart meters are merely the nose of the camel under the tent. The camel being the leviathan state that wants to monitor all of our activities in our homes and to regulate them in the most minute detail.

  2. Should we be confortable with cause and effect analysis in a highly interdependent world? Customers have standardized smart meters that they didn’t choose as part of their investment. What’s the risk of early obsolescense of those smart meters? Should the feel good energy efficiency investments give customers value on the customer experience be neglected in the analysis?

    Should customers continue to be deluded or be undeluded in retail markets with the right kind of structure? Please consider the following systemic argument in which cause and effect are not close in either time, nor space. As we approach another aniversary of the 2003 NorthEast Blackout, I have used the Wall Street Journal commentary “Demand, Not Supply,” written by Vernon Smith and Lynne 6 days after the blackout, to write a tweet with an image with the title “Can global soaring inequality be due to the failure to successfully address the California debacle and the 2003 NorthEast Blackout?” that can be seen via the tweet conversation https://twitter.com/gmh_upsa/status/764111905648578560

  3. I love the last two paragraphs Lynne Kiesling posted on April 9, 2004 in A LITTLE PREMATURE?,

    You can tell a lot about the perspective in the report from the heading in Chapter 2: “The North American Power Grid Is One Large, Interconnected Machine”. But this “one large machine” picture produces a misconception, or let’s call it an over simplification, of reality on the grid. This misconception is that reliability on the bulk power grid is an either/or proposition: either it is working, or it isn’t, and we’re all in this together. The implication is usually that we’re all bound together by one gigantic externality problem, and if you believe it then the answer is you need to pay more money to improve supply-side system reliability.

    This mechanistic perspective reveals just how deeply the industry, regulators and policymakers still take a very physical supply-oriented view of the system. They would be more innovative, and come up with better policies for more robust networks, if they treated the power grid as an organic, dynamic system.

    I love it, because she was supporting the emergence of a new civilization that will take market share from the industrial civilization, which we have been calling the systemic civilization. As an example, please consider the post “Can we agree with the Second Curve, while not with Handy? ( http://bit.ly/g726mh ) which at the moment has the following updates:

    First update. As Handy is right on about privatization, Do we need deregulation?

    Second update. If First Curve restructuring increases inequality, Would Second Curve restructuring decrease it?

    Third update. Early harvest 2015 Lima Annual Meetings: Electricity Pact strategy of trajectory.

    Fourth update. Will positive signals on wellbeing and growth come from organization?

    Fifth update. ¿Evitará cosecha temprana en Pacto Electrico que el 1% sea más rico que el 99%? (Will early harvest in Pacto Electrico avoid that the 1% get richer than the 99%?).

    Six update. ¿Cómo podría el Pacto Electrico atraer emprendedores que salten a la Segunda Curva para crear riqueza mundial? (How would the Pacto Electrico attract entrepreneurs that leap to the Second Curve to create world growth?)

    Seventh update. As the UK energy market remains on the 1st Curve, Pacto Eléctrico should leapfrog us to the 2nd Curve.

    Eigth update. Tres reglas de liderázgo para el Pacto Eléctrico cuando cada aspecto de negocio está a punto de cambiar (Three leadership rules for Pacto Electrico when every aspect of business is about to change.)

    Ninth update. Countries must leap into Hagel’s electoral strategy of trajectory on Handy’s curve of systemic civilization.

    Tenth update. Help #GlobalDebout entrepreneurs at the Bottom of the Pyramid ‘Be discovery driven.’

  4. Dear Lynne and Michael,

    Good evening!

    Thanks to your indirect help, on the 13th aniversary of the August 14th 2003 North East Blackout, I posted the “Second update. A solid societal blackout framework change to save GlobalDebout from Smart Grid technical blackouts” to the August 2013 post “An answer to “2003 Blackout: Could Smart Grid Save Us Next Time? ( http://bit.ly/125GMH ),” That is how the world may dissolve blackouts, starting with #RDUPSA and social #DD_SM instead of technical #SmartGrid solution. A rich Twitter conversation is also available in the link:

    Best regards,

    José Antonio

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