Category Archives: smart meters

July 29, 2011 · 5:12 pm

Consumers’ Changing Views of Electric Power

From http://www.inquisitr.com

I was in front of a number of utilities this week presenting my recent research on consumer attitudes about the smart grid. I can’t share the specifics of the research yet except to say that I’m starting to see signs that consumers’ attitudes toward energy in general and electricity in particular may be changing.

With smart meters on the road to near ubiquity, consumers are going to get used to having current information about their energy consumption and its cost. The Internet and mobile computing have habituated us to having all kinds of detailed information at our finger tips. There are some signs that we consumers expect to have rich information on hand to help us choose among the proliferating choices that are offered us. This will extend to the choices that will increasingly be offered to consumers in the electricity sector, ranging from time of use pricing and load shifting to demand response program participation.

I used to think that consumers could not be bothered to maintain awareness of the cost of electricity,much less how it might vary by time of day. But I think consumers will adapt. Smart meters, in-home energy displays, dynamic Web sites operated by their utilities, mobile-phone home energy apps–over time these things will become familiar to consumers. We will start to internalize and act on the pricing signals we are given. And utilities are starting to get savvier in their approach to understanding and marketing to consumers.

Everyone who drives a lot seems keenly aware of the current price of gasoline. There is ample evidence that swings in the price of gas have an impact on driving behavior. I can see the day when the same thing is true for the price of electricity. We consumers seem to want information to help us make informed decisions. The smart grid is going to make this information more readily available. And it’s going to begin to affect our behavior. For the good.

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February 21, 2011 · 9:08 pm

Consumers Say Smart Meters Produce Modest Behavior Changes

Here’s a factoid about the impact of smart meters on consumer behavior.

There is ample evidence that consumers who have clear and current information about their energy usage tend to use energy more efficiently. But behavior changes tend to be modest, according to a recent survey we conducted of smart meter consumers (those with smart meters installed at their homes).

Question: How has your behavior as it relates to power usage changed since your smart meter was installed? (Please select all that apply.) Source: Green Research/e-Rewards Consumer Survey (8/10), n=1007 (US only)

In the survey, a majority said their behavior hadn’t changed much since their smart meter had been installed, while about a quarter cited some efforts to conserve energy more and to monitor their usage more frequently. About a quarter of respondents had had their smart meter for less than three months and another quarter had it installed between three and 6 months earlier. The survey data shows some increased tendency to engage in these behaviors among those who have had their smart meters longer, so there is a possibility that these conservation behaviors will tend to become more prevalent over time.

Have any related data to share? Please leave a comment.

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January 21, 2011 · 11:19 pm

What Excites Consumers Most about Smart Meters?

Consumers with smart meters in their homes show significant enthusiasm for many of the benefits those meters can provide, including saving money and helping the environment. In a recent Green Research survey of such consumers, about half find the potential to save money with time-of-use pricing plans very or extremely valuable, for example. They even seem to find compelling the claim that smart meters could increase their privacy by eliminating the need for meter readers to come to their property: some 43 percent find that very or extremely valuable.

Hypothetical Smart Meter Benefits Consumers Find Very/Extremely Valuable | Source: Green Research/e-Rewards Consumer Survey (8/10), n=1007 (US only)

If there is one theme that underlies the appeal of smart meters to consumers, it is the empowerment that comes from better information. You can see this in the fact that, of a list of hypothetical benefits presented to consumers, the most popular, above even saving money or saving the environment, is that smart meters will result in electric bills that reflect actual usage, not estimates. Nearly two-thirds of smart meter consumers consider this highly valuable. That this benefit rates so highly with consumers and comes virtually “out of the box” with smart meter deployments, suggests that utilities should be sure to emphasize it to their customers.

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November 8, 2010 · 3:45 am

How Well Do Utilities Talk About the Smart Grid?

As background for a large Green Research study of consumer attitudes about smart meters and the smart grid, I looked at utility Web sites to see how utilities were talking to their customers about the smart grid.

There are nearly as many benefits of smart meters as there are utility companies, according to my survey. Across 25 utility company Web sites, some 20 or so distinct benefits were listed, from improved meter accuracy to saving money.

It was interesting to see how utility claims aligned with consumer attitudes, and where they didn’t.

The most popular claim from the utilities I looked at, by 14 of the 25 utilities, was that smart meters would enable consumers to manage their own electricy use better. Some examples:

Southern California Edition – “…you can better manage your electricity use through new tools, programs and services”

Georgia Power – “You’ll be able to better manage your energy usage and control your energy bill.”

American Electric Power -  ”It is designed to give customers greater control over their energy usage and ultimately their bills…”

Duke Energy – “…provide customers with additional information that may help them use energy more efficiently…”

My research suggests that these utilities are right to promote the ability of smart meters to help consumers better manage their energy use by giving them better information. Consumers in the focus groups we conducted responded very favorably to the idea that better information would give them greater control over their energy use. And nearly two-thirds of consumers nationally who already have smart meters in their homes say they find the benefit of receiving actual rather than estimated bills “extremely valuable ” or “very valuable.”

The ability of smart meters to enable new rate plans was the second-most common benefit touted on utility Web sites. Eleven utilities made that claim, including these:

Alliant Energy – “New and improved rate options and programs”

Dominion – “In the future, Dominion may offer dynamic rates which will help you save on your monthly bill if you conserve power during high-demand periods.”

Alabama Power – “Once the program is installed, we’ll be able to offer innovative rate options that meet your lifestyle.”

Consumers are keen on saving money, and if they believe they can do so with time of use plans, they will be interested. About half the smart meter consumers in our study said they found the prospect very or extremely valuable. On the other hand, the most widespread concern consumers have about smart meters is that they may lead to higher bills. And a quarter of the respondents to our survey who cited such concerns said their concerns would be allayed if they were not forced to switch to a a time of use plan. Utilities need to proceed with caution when they speak about time of use plans.

Despite well publicized concerns about privacy risks associated with smart meters and consumer data, utilities deploying smart meters often make the claim that smart meters can actually improve consumer privacy, by making it unncessary to send workers to consumers’ property to read their meters. Nine of 25 utilities looked at made this claim. Apparently, the claim is plausable to consumers. Over 40 percent of smart meter consumers say they find such a benefit very or extremely valuable.

San Diego Gas & Electric – “More Privacy: Because smart meters send information electronically to SDG&E daily, SDG&E’s meter readers will no longer have to enter your property.”

DTE Energy – “…less intrusive for you. Once installation is complete, DTE Energy will not enter your yard, home or business on a regular basis.”

Oncor – “Eliminates a person coming to read meter at your property”

Our research discovered that consumers want to understand not only how they might benefit from smart meters but why utilities are backing smart meter deployments. Utilities would do well to emphasize that the smart grid can help them operate more efficiently and respond faster to power outages. Only 6 of the utilities we looked at emphasized faster outage response time as a benefit.

If you’d like to know more, or are interested in tailored program to improve your understanding your own customers’ attitudes, please don’t hesitate to drop us a line.

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September 17, 2010 · 6:07 am

Fears of Higher Bills with Smart Meters Are Overblown

The vast majority of households with smart meters report no increase in electric bills following the installation of their smart meter, according to a new study we just completed. Eighty percent of U.S. smart meter consumers said their bills had either decreased or stayed the same or that they had not noticed any change post installation. Just 8 percent of consumer said their electric bills had increased a lot after a smart meter was installed in their home.

Utilities with smart meter deployment programs need to make hay of this finding, especially after the bruising that PG&E got over reports (eventually disproved) that their smart meters were ripping off customers .

Consumers’ number one concern about smart meters is that they may lead to higher bills. Utilities need to do a better job explaining how they work and how they will affect consumers bills over time.

Have you seen any examples of excellent utility communication? I’d like to hear about them for a study of utility messaging.

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September 16, 2010 · 11:01 am

Just Completed a Major Smart Grid Consumer Study

This was a fun summer at Green Research. We just delivered a major consumer research study that focused on the smart grid and smart meters. We learned  a lot about consumer attitudes and developed some insights that will be very useful to utilities seeking to develop support among their customers for smart meter programs. I hope to share a few findings over the coming weeks.

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December 2, 2009 · 2:33 am

Marketing Home Energy Management Without Utilities

After completing a study of the home energy management market I spoke last week with a strategy guy at large consumer electronics manufacturer. The company is looking at the home energy management market and evaluating various product and market entry strategies.

Many of the vendors of in-home energy displays are focused on working with utilities. Utilities have the customer relationships. In many cases utilities now have money to spend on in-home displays (a million of them in the U.S. according to the recent federal Smart Grid awards). And many have powerful motives to promote the adoption of energy information displays, ranging from fostering energy conservation, greasing the wheels for demand response programs, and dressing up smart grid investments with something the rate payer can see and touch.

Is there a path to market that bypasses the utilities and speaks directly to consumers? This is one of the questions my new strategist friend is looking at. It’s an interesting one, and one that Google raised when it announced that, along with trying to sign up utilities to share customer consumption data through its PowerMeter application, it is partnering with device makers like Energy, Inc. to capture and report on home energy use without the involvement of the utilities at all.

Perhaps consumers don’t trust utilities to help them manager their energy consumption. It is noteworthy that, according to a Pike Research report earlier this year (subscription required), some 30% of U.S. consumers were uninterested in demand response programs because of the “‘big brother’ aspect” and another 12% “don’t trust the electric company.”

Still, I think utilities are the key to the development of the market for energy information displays over the next 3 to 5 years (even though longer term I believe a consumer market for the devices will develop). And I suspect, based on the data I have, that the segment of consumers that would be motivated by distrust of their utility to buy an energy information device to be relatively small.

According to the Pike study, for instance, of those interested in energy information displays, over 80 percent said they would consider using their electric utility as a provider of energy management services that included one. An IBM study last year of consumer attitudes about energy consumption suggested that nearly 70 percent of consumers would be interested in a “participatory network” in which they share responsibility for energy management with utilities.

Utilities have an opportunity and an imperative over the next few years. They must convey to their customers the benefits of getting more engaged in their own energy managaement. And they must develop a more dynamic relationship with their customers. But utilities have their work cut out for them. Both the IBM study and a Gartner study released over the summer suggested that utilities have room for improvement in how they market new energy programs such as those relating to energy efficiency or green power: awareness and uptake of existing programs remain low in many cases.

So my sense is that this consumer electronics company may well be able to out-market the utilities, but would have little success building a market based on of distrust of them. A promising path forward might include a co-marketing arrangement, which could give the utilities a needed boost in their communication skills.

What are your thoughts?

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October 28, 2009 · 10:36 pm

Smart Grid Grants Favor Meters and Energy Displays

Yesterday President Obama announced $3.4 billion in grant awards for smart grid investments under the American Recovery and Reinvestment Act (ARRA), the stimulus law passed earlier this year.

Among the goals of this spending are infrastructure improvements to make it easier to integrate renewable energy sources into the power grid; improve grid reliability and reduce outages, which the President said cost Americans over $150 billion per year; and eventually reduce consumers’ energy bills. (The cost of power outages is something I cited as support for grid investments in an earlier post on the smart grid.)

Smart Meters a Favored Technology

The president’s talk of reduced energy bills is a reference to the strong support for smart meters reflected in the grant awards. Most of the projects the government is supporting with these grants involve the installation of smart meters.  As the president said,

Smart meters will allow you to actually monitor how much energy your family is using by the month, by the week, by the day, or even by the hour. So coupled with other technologies, this is going to help you manage your electricity use and your budget at the same time, allowing you to conserve electricity during times when prices are highest, like hot summer days.

The “other technologies” he mentioned include in-home energy displays, the focus of a market research study I am currently wrapping up and which should be published in the fourth quarter of this year.

One Million In-Home Energy Displays

According to an administration summary of the grants, the funded projects, when fully implemented, “install more than 1 million in-home displays, 170,000 smart thermostats, and 175,000 other load control devices to enable consumers to reduce their energy use.”

These grants are a boon for the winning utilities and the vendors they have selected as suppliers and implementers. And, assuming these projects largely deliver on the hope-for benefits, these projects will prime the pump for large-scale deployments over the next 5-8 years in the U.S. and, over a longer time period, globally.

Stimulus Temporarily Stalled the Smart Grid Market

Over the last couple of months, I’ve spoken to many technology vendors in this space, as well as utilities that had submitted smart grid proposals. The general consensus among this group about the impact of the stimulus was that it had the comically ironic effect of putting the smart grid market in a state of suspended animation.  With billions of dollars of grants in the balance, any utility that had been contemplating making an investment in smart grid technologies had every reason to put it on hold until it learned whether the government was going to foot part of the bill.

So the vendors watched and waited (after helping their prospective customers with their grant applications).

Some Utilities Will Proceed Even Without Grant Money

I spoke to one utility today who had ambitious plans for smart meter and in-home deployments in its service area. The utility, a cooperative, did not receive a hope-for grant to fund half of the over all expense. They are disappointed but say the intend to press forward with their plans, albeit on a slower deployment schedule. And they hope to submit a revised grant proposal for a second phase of awards.

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