Five years ago came the promise: A great new way of saving money on your energy bills was on its way. An impressive new device called a “smart meter” — a key component of the much touted “smart grid” — would let consumers actually see how much power they’re using in their homes, thus empowering them to change their habits and slash their bills.

According to Nat Treadway of Distributed Energy Financial Group, which studies prepay arrangements, consumers typically use around 10 percent less electricity …

… True, the meters are everywhere — utilities have installed 50 million at homes across the U.S., reaching 43 percent of homes overall, according to the Edison Foundation’s Institute for Electric Innovation. But that doesn’t mean consumers are easily accessing the available data or using it to change their energy use.

Smart meters aren’t waking Americans up and making them conscious of their energy use — because they aren’t being paired with what behavioral research shows us is needed for that to happen.

… Smart meters are a nifty new technology that can record your electricity usage on at least an hourly basis (and sometimes much more frequently). But behavioral research suggests that technologies alone don’t necessarily change what we do, how we act, the habits we form. In the case of smart meters, what still seems missing in most cases are user interfaces that relay information from the meter in real time, and translate it into dollars and cents. Consumers also need much more access to an innovation called “smart pricing” — in other words, electricity prices that vary based on supply and demand — a key change the Smart Grid was designed to enable, and one that might make it a lot more worthwhile to pay attention to your energy behavior.

The upshot: Right now, smart meters aren’t waking Americans up and making them conscious of their energy use — because they aren’t being paired with what behavioral research shows us is needed for that to happen.

The situation couldn’t be more different from another energy transaction we’re all familiar with —  going to the gas station. Here, as you pump, you see gallons bought and cost incurred in real time. This transparency is precisely why everybody has been so focused on plunging gas prices lately.

… In prepay, buying electricity is much like recharging a phone calling card. You simply open an electricity account, pay in advance for a certain amount of power, and sign up for regular messages — by text, e-mail, or phone — about your account status. The cost of your power use is subtracted from your balance daily, and you receive regular updates about usage and how much money is left in your account.

It may sound like a hassle, but it definitely leads to rational attentiveness: Fail to replenish your account and you can have your power shut off. Prepay also saves energy and money. It is prevalent in Texas’s deregulated electricity market, and according to Nat Treadway of Distributed Energy Financial Group, which studies prepay arrangements, consumers typically use around 10 percent less electricity in these programs — because they have to regularly monitor their power use.

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Filed Under: Prepaid, Smart Grid