We are Cambridge Energy Data Lab, a smart energy startup based in Cambridge, UK.
This blog, named "Cambridge Energy Data Analysis", aims to incrementally unveil our big data analysis and technologies to the world. We are a group of young geeks: computer scientists, data scientists, and serial entrepreneurs, having a passion for smart energy and sustainable world.

Wednesday 19 March 2014

3 Ways Smart Meters Could Save You Money

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!

Have something to say about these decidedly (if not overly) optimistic speculations? Leave a comment below! For more information on the smart meter rollout, here is the UK government page on the consultations and policies in place/being developed:

No comments:

Post a Comment