One of the biggest critiques of smart meters is that while
they are informative to the user, they do not actively save the user money.
This is partly true: currently, to see
any savings on a smart meter investment, the user must actively adjust their
habits based on the readings. Studies have been inconclusive on the value
of smart meters in terms of reducing consumer energy expenditure, and with good
reason. A fancy screen on the wall is
still a fancy screen on the wall unless the user does something with the
information.
The smart meters
previously studied require valuable resources. They require time,
dedication, and behavioral change at the household level to earn savings. In
today’s hectic world that includes any combination of long commutes, hard work
days, familial obligations, and much sought after personal time, there is
little time left for the consumer to spend micromanaging their energy
consumption. Current passive methods involve the whole-home integration of
energy-saving, “smart” electronics that either consume less energy or work with
the smart meter to periodically turn off at points where the rate rises too
high, but these options aren’t cheap.
The question remains: Is it possible, or fair, to expect a
smart meter to save us money without adopting a behavioral change or buying
brand new appliances and electronics?
The answer is yes! While it may take time to see the
savings, the UK smart meter rollout is
intended to ultimately help energy consumers and producers alike, and I’d
like to speculate on three ways that the smart meter rollout could ultimately
help consumers save money without having to adjust habits:
1. Smart meters open the door to short
switching periods, allowing for more competitive pricing.
For those without a smart meter, the
billing process involves a “meter reader” employee of the energy provider
physically coming to the customer’s building and taking the measurement. It
takes time—usually weeks—to schedule an appointment, take the measurement, send
the final bill, and finish the paperwork to allow a customer to switch. With a
smart meter, the reading can be queried instantly, drastically reducing the
processing time. With customers able to
change their provider in as little as a day, energy producers will need to
ensure that their rates remain competitive. Predictive models (such as
those being created at Cambridge Energy Data Lab) also increase in accuracy
with a known number of consumers, so, in addition to other planning benefits, it is in the producer’s interest to
incentivize customers to make a long term commitment to an energy plan. One
method of achieving both of these would be in the form of reduced prices on
their fixed rate, long-term plans.
2. More accurate, up-to-date energy readings
will help energy producers waste less.
With smart meters, companies can gather
data on customer energy expenditure habits not only on a monthly basis, but as
often as every half-hour. Developing predictive models allows them to more
accurately predict the energy they need to generate in a given time period. This allows for less fuel to be wasted and
cost savings to be realized, a savings which could theoretically be passed down
to the consumer and fuel (pun intended) more competitive rates.
3. Your data is valuable!
Predictive modeling allows for energy
providers to minimize costs and provide efficient service. Smart meters
(supposedly) encourage consumers to use less energy, which helps to forward the
government’s current goals of emissions reduction. Both the energy companies and the government need your data. The
widespread, smart meter rollout is recognition of the value of this data in
achieving each party’s goals. Both energy providers and the government are
literally saying, “We want to know how and when you use energy so badly that we
are willing to give you a free smart meter to find out!” Because the use of new
smart meters are in the best interests of all parties involved, these meters
will be widely available to consumers and will pass these savings unto the
user.
Rather empowering, isn’t it? Once the
energy providers realize these savings and the government starts to see
measurable progress toward emissions reductions, the value of your data goes up over time.
If your data becomes integral to the
operation of your energy provider, why give away your data for free? We hope to develop
the tools to realize a future scenario where the consumer can be compensated for using a smart meter in the form of
significantly reduced energy bills.
4. As an added bonus, customer service will
improve.
Most customers who have tried switching
providers themselves have been met with lengthy phone calls, paperwork, and
frustration. The scenario probably went something like this: You probably had
to track down your last bill and the energy provider’s number, call and wait
for a representative, wait a few weeks for someone to come read the meter, wait
a few more weeks for your final bill to come, and finally get confirmation over
a month later that you were taken off the plan, in addition to setting up your next plan with the new energy provider.
Of course, a sizeable portion of customers have also reported being double
billed for months after because their original supplier did not correctly take
them off their supply list, resulting in additional hassle as the consumers
fought to correct the issue. Smart
meters should help to reduce these errors, or at least reduce the time taken to
correct them. As they say, time is money!
