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ACEEE Study Finds “Smart Meters” Not Smart Enough to Slash Residential Power Use and Significantly Reduce Consumer Electric Bills

ACEEE Study Finds “Smart Meters” Not Smart Enough to Slash Residential Power Use and Significantly Reduce Consumer Electric Bills


June 28, 2010

Media Contact(s):

Patrick Mitchell, 703-276-3266, Hastings Group

Washington, D.C.Consumers could cut their household electricity use as much as 12 percent and save $35 billion or more over the next 20 years if U.S. utilities go beyond simple “smart meter” initiatives to include a wide range of energy-use feedback tools that get consumers more involved in the process of using less energy, according to a major new report from the nonprofit American Council for an Energy-Efficient Economy (ACEEE).

ACEEE based its findings on a review of 57 different residential sector feedback programs between 1974 and 2010.  The new report concludes:  “Advanced metering initiatives alone are neither necessary nor sufficient for providing households with the feedback that they need to achieve energy saving; however, they do offer important opportunities. To realize potential feedback-induced savings, advanced meters must be used in conjunction with in-home (or on-line) displays and well-designed programs that successfully inform, engage, empower, and motivate people.”

ACEEE found that three of the most promising approaches in the short- to medium-term include enhanced billing, daily/weekly feedback, and “off line” and Web-based real-time feedback.  However, far-reaching programs that go beyond “smart meters” are few and far between.  According to ACEEE, no U.S. utilities are currently providing the full range of needed services.

John A. “Skip” Laitner, director, Economic and Social Analysis, American Council for an Energy-Efficient Economy, said:   “The bottom line here is very simple:  Smart meters in and of themselves are just not ‘smart’ enough to get the job done for consumers and our economy.    While advanced metering provides a useful tool, to save energy, cut consumer electric bills and reduce greenhouse gas emissions from power plants, utilities need to use these advanced meters to provide consumers with information on their consumption in ways that grab consumers attention and encourage them to take action.”

Lead report author Karen Ehrhardt-Martinez, formerly with ACEEE and now a senior research associate, University of Colorado’s Renewable and Sustainable Energy Institute, Boulder, CO., said:  “Rather than simply presenting consumers with information about the amount of energy consumed during the past month, enhanced billing programs in the short-term can provide a context in which consumers can evaluate their consumption levels and give expert recommendations about the best approaches for reducing energy consumption. People may be unhappy to get an electricity bill for $200, but it’s even worse to find out that your neighbors’ energy bills are half what you’re paying even though their homes are the same size.  Through enhanced billing consumers can better evaluate their energy consumption practices, determine how energy is being wasted, and take action.”

Steven Nadel, executive director, American Council for an Energy-Efficient Economy, said:  “We now know promising approaches for using feedback in ways that motivate consumers to reduce energy use, but we also know that the best approaches are not in widespread use.  While the benefits of feedback are substantial, few households have yet to benefit.  Instead of receiving useful feedback, most of today’s households simply receive the standard monthly energy bill.  Making the potential energy savings a reality at both the household and national levels will require action on the part of utilities, policymakers, and individual consumers.  In short, utilities must be made aware of the importance of sharing this information and sharing it in ways that are meaningful to energy consumers.”

Beyond a short-term move to enhanced billing programs, households could see even greater levels of savings through the application of more sophisticated programs that integrate utility-based advanced metering initiatives with on-line or in-home energy displays and tailored guidance regarding the highest-impact means of reducing energy waste.  Utilities across the country are investing in new electricity meters that provide two-way communications between the meter and the utility, and that monitor and collect household energy use data on an hourly basis (or even more frequently).

When paired with an on-line program, households can increase their knowledge about how they are using energy.  When combined with an in-home display, electricity consumers can witness the amount of energy that they are consuming in real-time, calculate the month-end impact of their current consumption patterns, and assess the impact of adopting new practices and more energy-efficient technologies. The average electricity savings associated with online services providing daily/weekly feedback (the Google PowerMeter is one example) is about 8 percent while real-time feedback has witnessed an average savings about 9 percent per participating household. 

 

Study Highlights

Key findings of the ACEEE report are as follows:

  • Energy-use feedback can help households gain control over their energy use practices, reduce the amount of wasted energy, and reduce electricity consumption by 4 to 12 percent.
  • Depending on how feedback programs are implemented by all of the nation’s electric utilities, consumers might enjoy a cumulative net savings of $2 to $35 billion or more over the next 20 years. 
  • Advanced (or “smart”) metering initiatives alone are neither necessary nor sufficient for providing households with the feedback that they need to achieve energy savings, however they do offer important opportunities. To realize potential feedback-induced savings, advanced meters must be used in conjunction with in-home (or on-line) displays and well-designed programs that successfully inform, engage, empower, and motivate people.
  • Utilities and policymakers should act now to ensure that U.S. households receive needed feedback by providing all households with: enhanced billing in the short term and real-time feedback (in conjunction with smart meter deployment) in the medium term.
  • Providing households with persistent feedback has resulted in sustained savings over time.
  • Since 1995, feedback-induced savings have been higher in Europe than in the United States suggesting important differences in European policies and culture.

To view the full report, click here.