IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v45y2014icp280-294.html
   My bibliography  Save this article

Valuing smart meters

Author

Listed:
  • Pepermans, Guido

Abstract

This paper assesses to what extent consumers are willing to make use of the features and capabilities offered by smart meters. Via a choice experiment households are offered the choice between a set of smart meters, described by six attributes: impact on the comfort and privacy level, functionality, visibility, cost savings, and investment outlay.

Suggested Citation

  • Pepermans, Guido, 2014. "Valuing smart meters," Energy Economics, Elsevier, vol. 45(C), pages 280-294.
    • Handle: RePEc:eee:eneeco:v:45:y:2014:i:c:p:280-294
    DOI: 10.1016/j.eneco.2014.07.011
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988314001686
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2014.07.011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Scarpa, Riccardo & Willis, Ken, 2010. "Willingness-to-pay for renewable energy: Primary and discretionary choice of British households' for micro-generation technologies," Energy Economics, Elsevier, vol. 32(1), pages 129-136, January.
    2. Newsham, Guy R. & Bowker, Brent G., 2010. "The effect of utility time-varying pricing and load control strategies on residential summer peak electricity use: A review," Energy Policy, Elsevier, vol. 38(7), pages 3289-3296, July.
    3. James Murphy & P. Allen & Thomas Stevens & Darryl Weatherhead, 2005. "A Meta-analysis of Hypothetical Bias in Stated Preference Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 30(3), pages 313-325, March.
    4. Danny Campbell & W. Hutchinson & Riccardo Scarpa, 2008. "Incorporating Discontinuous Preferences into the Analysis of Discrete Choice Experiments," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 41(3), pages 401-417, November.
    5. Carlsson, Fredrik & Martinsson, Peter, 2008. "Does it matter when a power outage occurs? -- A choice experiment study on the willingness to pay to avoid power outages," Energy Economics, Elsevier, vol. 30(3), pages 1232-1245, May.
    6. Faruqui, Ahmad & Harris, Dan & Hledik, Ryan, 2010. "Unlocking the [euro]53 billion savings from smart meters in the EU: How increasing the adoption of dynamic tariffs could make or break the EU's smart grid investment," Energy Policy, Elsevier, vol. 38(10), pages 6222-6231, October.
    7. Pepermans, Guido, 2011. "The value of continuous power supply for Flemish households," Energy Policy, Elsevier, vol. 39(12), pages 7853-7864.
    8. Moore, Rebecca, 2008. "Using Attitudes to Characterize Heterogeneous Preferences," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6488, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Neenan, Bernard & Hemphill, Ross C., 2008. "Societal Benefits of Smart Metering Investments," The Electricity Journal, Elsevier, vol. 21(8), pages 32-45, October.
    10. Bergmann, Ariel & Hanley, Nick & Wright, Robert, 2006. "Valuing the attributes of renewable energy investments," Energy Policy, Elsevier, vol. 34(9), pages 1004-1014, June.
    11. Banfi, Silvia & Farsi, Mehdi & Filippini, Massimo & Jakob, Martin, 2008. "Willingness to pay for energy-saving measures in residential buildings," Energy Economics, Elsevier, vol. 30(2), pages 503-516, March.
    12. Paul L. Joskow, 2012. "Creating a Smarter U.S. Electricity Grid," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 29-48, Winter.
    13. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, October.
    14. Beenstock, Michael & Goldin, Ephraim & Haitovsky, Yoel, 1998. "Response bias in a conjoint analysis of power outages," Energy Economics, Elsevier, vol. 20(2), pages 135-156, April.
    15. David Hensher & William Greene, 2003. "The Mixed Logit model: The state of practice," Transportation, Springer, vol. 30(2), pages 133-176, May.
    16. Peter Boxall & Wiktor Adamowicz, 2002. "Understanding Heterogeneous Preferences in Random Utility Models: A Latent Class Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 23(4), pages 421-446, December.
    17. Riccardo Scarpa & Raffaele Zanoli & Viola Bruschi & Simona Naspetti, 2013. "Inferred and Stated Attribute Non-attendance in Food Choice Experiments," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(1), pages 165-180.
    18. Borchers, Allison M. & Duke, Joshua M. & Parsons, George R., 2007. "Does willingness to pay for green energy differ by source?," Energy Policy, Elsevier, vol. 35(6), pages 3327-3334, June.
    19. Nielsen, Jytte Seested, 2011. "Use of the Internet for willingness-to-pay surveys: A comparison of face-to-face and web-based interviews," Resource and Energy Economics, Elsevier, vol. 33(1), pages 119-129, January.
    20. Danny Campbell & David A. Hensher & Riccardo Scarpa, 2011. "Non-attendance to attributes in environmental choice analysis: a latent class specification," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 54(8), pages 1061-1076, December.
    21. Krishnamurti, Tamar & Schwartz, Daniel & Davis, Alexander & Fischhoff, Baruch & de Bruin, Wändi Bruine & Lave, Lester & Wang, Jack, 2012. "Preparing for smart grid technologies: A behavioral decision research approach to understanding consumer expectations about smart meters," Energy Policy, Elsevier, vol. 41(C), pages 790-797.
    22. Rulleau, Bénédicte & Dachary-Bernard, Jeanne, 2012. "Preferences, rational choices and economic valuation: Some empirical tests," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(2), pages 198-206.
    23. Longo, Alberto & Markandya, Anil & Petrucci, Marta, 2008. "The internalization of externalities in the production of electricity: Willingness to pay for the attributes of a policy for renewable energy," Ecological Economics, Elsevier, vol. 67(1), pages 140-152, August.
    24. David Revelt & Kenneth Train, 1998. "Mixed Logit With Repeated Choices: Households' Choices Of Appliance Efficiency Level," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 647-657, November.
    25. Emily Lancsar & Jordan Louviere, 2006. "Deleting ‘irrational’ responses from discrete choice experiments: a case of investigating or imposing preferences?," Health Economics, John Wiley & Sons, Ltd., vol. 15(8), pages 797-811, August.
    26. AfDB AfDB, . "Annual Report 2012," Annual Report, African Development Bank, number 461.
    27. Edward Morey & Kathleen Greer Rossmann, 2003. "Using Stated-Preference Questions to Investigate Variations in Willingness to Pay for Preserving Marble Monuments: Classic Heterogeneity, Random Parameters, and Mixture Models," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 27(3), pages 215-229, November.
    28. Edward Morey & Jennifer Thacher & William Breffle, 2006. "Using Angler Characteristics and Attitudinal Data to Identify Environmental Preference Classes: A Latent-Class Model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 34(1), pages 91-115, May.
    29. John Loomis, 2011. "What'S To Know About Hypothetical Bias In Stated Preference Valuation Studies?," Journal of Economic Surveys, Wiley Blackwell, vol. 25(2), pages 363-370, April.
    30. Mandy Ryan & Angela Bate, 2001. "Testing the assumptions of rationality, continuity and symmetry when applying discrete choice experiments in health care," Applied Economics Letters, Taylor & Francis Journals, vol. 8(1), pages 59-63.
    31. Ian J. Bateman & Richard T. Carson & Brett Day & Michael Hanemann & Nick Hanley & Tannis Hett & Michael Jones-Lee & Graham Loomes, 2002. "Economic Valuation with Stated Preference Techniques," Books, Edward Elgar Publishing, number 2639.
    32. Ahmad Faruqui & Sanem Sergici, 2010. "Household response to dynamic pricing of electricity: a survey of 15 experiments," Journal of Regulatory Economics, Springer, vol. 38(2), pages 193-225, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tsvetanov, Tsvetan, 2022. "The deterring effect of monetary costs on smart meter adoption," Applied Energy, Elsevier, vol. 318(C).
    2. Janicke, Lauren & Nock, Destenie & Surana, Kavita & Jordaan, Sarah M., 2023. "Air pollution co-benefits from strengthening electric transmission and distribution systems," Energy, Elsevier, vol. 269(C).
    3. Hye-Jeong Lee & Beom Jin Chung & Sung-Yoon Huh, 2023. "Consumer Preferences for Smart Energy Services Based on AMI Data in the Power Sector," Energies, MDPI, vol. 16(9), pages 1-20, May.
    4. Srivastava, Aman & Van Passel, Steven & Kessels, Roselinde & Valkering, Pieter & Laes, Erik, 2020. "Reducing winter peaks in electricity consumption: A choice experiment to structure demand response programs," Energy Policy, Elsevier, vol. 137(C).
    5. Knoefel, Jan & Sagebiel, Julian & Yildiz, Özgür & Müller, Jakob R. & Rommel, Jens, 2018. "A consumer perspective on corporate governance in the energy transition: Evidence from a Discrete Choice Experiment in Germany," Energy Economics, Elsevier, vol. 75(C), pages 440-448.
    6. Ruokamo, Enni, 2016. "Household preferences of hybrid home heating systems – A choice experiment application," Energy Policy, Elsevier, vol. 95(C), pages 224-237.
    7. Nakai, Miwa & von Loessl, Victor & Wetzel, Heike, 2024. "Preferences for dynamic electricity tariffs: A comparison of households in Germany and Japan," Ecological Economics, Elsevier, vol. 223(C).
    8. Dato, Prudence & Durmaz, Tunç & Pommeret, Aude, 2020. "Smart grids and renewable electricity generation by households," Energy Economics, Elsevier, vol. 86(C).
    9. Coelho, Vitor N. & Weiss Cohen, Miri & Coelho, Igor M. & Liu, Nian & Guimarães, Frederico Gadelha, 2017. "Multi-agent systems applied for energy systems integration: State-of-the-art applications and trends in microgrids," Applied Energy, Elsevier, vol. 187(C), pages 820-832.
    10. Buckley, Penelope, 2020. "Prices, information and nudges for residential electricity conservation: A meta-analysis," Ecological Economics, Elsevier, vol. 172(C).
    11. Tu, Gengyang & Faure, Corinne & Schleich, Joachim & Guetlein, Marie-Charlotte, 2021. "The heat is off! The role of technology attributes and individual attitudes in the diffusion of Smart thermostats – findings from a multi-country survey," Technological Forecasting and Social Change, Elsevier, vol. 163(C).
    12. Ladenburg, Jacob & Jensen, Kirsten Lund & Lodahl, Christa & Keles, Dogan, 2022. "Testing for non-linear willingness to accept compensation for controlled electricity switch-offs using choice experiments," Energy, Elsevier, vol. 238(PB).
    13. Srivastava, A. & Van Passel, S. & Valkering, P. & Laes, E.J.W., 2021. "Power outages and bill savings: A choice experiment on residential demand response acceptability in Delhi," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).
    14. Wong, Jason Chun Yu & Blankenship, Brian & Urpelainen, Johannes & Balani, Kanika & Ganesan, Karthik & Bharadwaj, Kapardhi, 2022. "Understanding electricity billing preferences in rural and urban India: Evidence from a conjoint experiment," Energy Economics, Elsevier, vol. 106(C).
    15. Dongnyok Shim & Seung Wan Kim & Jörn Altmann, 2018. "Strategic management of residential electric services in the competitive market: Demand-oriented perspective," Energy & Environment, , vol. 29(1), pages 49-66, February.
    16. Le Ray, G. & Pinson, P., 2020. "The ethical smart grid: Enabling a fruitful and long-lasting relationship between utilities and customers," Energy Policy, Elsevier, vol. 140(C).
    17. Bansal, Prateek & Kumar, Rajeev Ranjan & Raj, Alok & Dubey, Subodh & Graham, Daniel J., 2021. "Willingness to pay and attitudinal preferences of Indian consumers for electric vehicles," Energy Economics, Elsevier, vol. 100(C).
    18. Strong, Derek Ryan, 2017. "The Early Diffusion of Smart Meters in the US Electric Power Industry," Thesis Commons 7zprk, Center for Open Science.
    19. Ruokamo, Enni & Kopsakangas-Savolainen, Maria & Meriläinen, Teemu & Svento, Rauli, 2019. "Towards flexible energy demand – Preferences for dynamic contracts, services and emissions reductions," Energy Economics, Elsevier, vol. 84(C).
    20. Gordon Rausser & Wadim Strielkowski & Dalia Å treimikienÄ—, 2018. "Smart meters and household electricity consumption: A case study in Ireland," Energy & Environment, , vol. 29(1), pages 131-146, February.
    21. Bernadeta Gołębiowska, 2020. "Preferences for demand side management—a review of choice experiment studies," Working Papers 2020-05, Faculty of Economic Sciences, University of Warsaw.
    22. Di Foggia, Giacomo, 2018. "Smart metering projects: an interpretive framework for successful implementation," OSF Preprints zcf34, Center for Open Science.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pepermans, Guido, 2011. "The value of continuous power supply for Flemish households," Energy Policy, Elsevier, vol. 39(12), pages 7853-7864.
    2. Soliño, Mario & Farizo, Begoña A. & Vázquez, María X. & Prada, Albino, 2012. "Generating electricity with forest biomass: Consistency and payment timeframe effects in choice experiments," Energy Policy, Elsevier, vol. 41(C), pages 798-806.
    3. Dalia Streimikiene & Tomas Balezentis & Ilona Alisauskaite-Seskiene & Gintare Stankuniene & Zaneta Simanaviciene, 2019. "A Review of Willingness to Pay Studies for Climate Change Mitigation in the Energy Sector," Energies, MDPI, vol. 12(8), pages 1-38, April.
    4. Amador, Francisco Javier & González, Rosa Marina & Ramos-Real, Francisco Javier, 2013. "Supplier choice and WTP for electricity attributes in an emerging market: The role of perceived past experience, environmental concern and energy saving behavior," Energy Economics, Elsevier, vol. 40(C), pages 953-966.
    5. Christian A. Oberst & Reinhard Madlener, 2015. "Prosumer Preferences Regarding the Adoption of Micro†Generation Technologies: Empirical Evidence for German Homeowners," Working Papers 2015.07, International Network for Economic Research - INFER.
    6. Mohammed H. Alemu & Søren B. Olsen, 2017. "Can a Repeated Opt-Out Reminder remove hypothetical bias in discrete choice experiments? An application to consumer valuation of novel food products," IFRO Working Paper 2017/05, University of Copenhagen, Department of Food and Resource Economics.
    7. Gracia, Azucena & Barreiro-Hurlé, Jesús & Pérez y Pérez, Luis, 2012. "Can renewable energy be financed with higher electricity prices? Evidence from a Spanish region," Energy Policy, Elsevier, vol. 50(C), pages 784-794.
    8. Robert J. Johnston & Kevin J. Boyle & Wiktor (Vic) Adamowicz & Jeff Bennett & Roy Brouwer & Trudy Ann Cameron & W. Michael Hanemann & Nick Hanley & Mandy Ryan & Riccardo Scarpa & Roger Tourangeau & Ch, 2017. "Contemporary Guidance for Stated Preference Studies," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(2), pages 319-405.
    9. Broberg, Thomas & Daniel, Aemiro Melkamu & Persson, Lars, 2021. "Household preferences for load restrictions: Is there an effect of pro-environmental framing?," Energy Economics, Elsevier, vol. 97(C).
    10. Buryk, Stephen & Mead, Doug & Mourato, Susana & Torriti, Jacopo, 2015. "Investigating preferences for dynamic electricity tariffs: The effect of environmental and system benefit disclosure," Energy Policy, Elsevier, vol. 80(C), pages 190-195.
    11. Hotaling, Chelsea & Bird, Stephen & Heintzelman, Martin D., 2021. "Willingness to pay for microgrids to enhance community resilience," Energy Policy, Elsevier, vol. 154(C).
    12. Westerberg, Vanja Holmquist & Lifran, Robert & Olsen, Søren Bøye, 2010. "To restore or not? A valuation of social and ecological functions of the Marais des Baux wetland in Southern France," Ecological Economics, Elsevier, vol. 69(12), pages 2383-2393, October.
    13. Heng, Yan & Lu, Chao-Lin & Yu, Luqing & Gao, Zhifeng, 2020. "The heterogeneous preferences for solar energy policies among US households," Energy Policy, Elsevier, vol. 137(C).
    14. Bae, Jeong Hwan & Rishi, Meenakshi, 2018. "Increasing consumer participation rates for green pricing programs: A choice experiment for South Korea," Energy Economics, Elsevier, vol. 74(C), pages 490-502.
    15. Angel Bujosa & Antoni Riera & Robert Hicks, 2010. "Combining Discrete and Continuous Representations of Preference Heterogeneity: A Latent Class Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 47(4), pages 477-493, December.
    16. Sardaro, Ruggiero & Faccilongo, Nicola & Roselli, Luigi, 2019. "Wind farms, farmland occupation and compensation: Evidences from landowners’ preferences through a stated choice survey in Italy," Energy Policy, Elsevier, vol. 133(C).
    17. Yoo, James & Ready, Richard C., 2014. "Preference heterogeneity for renewable energy technology," Energy Economics, Elsevier, vol. 42(C), pages 101-114.
    18. Ndebele, Tom & Marsh, Dan, 2014. "Environmental attitude and the demand for green electricity in the context of supplier choice: A case study of the New Zealand retail electricity market," 2014 Conference, August 28-29, 2014, Nelson, New Zealand 188376, New Zealand Agricultural and Resource Economics Society.
    19. Aravena, Claudia & Martinsson, Peter & Scarpa, Riccardo, 2014. "Does money talk? — The effect of a monetary attribute on the marginal values in a choice experiment," Energy Economics, Elsevier, vol. 44(C), pages 483-491.
    20. Carlsson, Fredrik & Demeke, Eyoual & Martinsson, Peter & Tesemma, Tewodros, 2020. "Cost of power outages for manufacturing firms in Ethiopia: A stated preference study," Energy Economics, Elsevier, vol. 88(C).

    More about this item

    Keywords

    Choice experiment; Smart meter; Conditional logit model; Random parameter logit model; Willingness to pay;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:45:y:2014:i:c:p:280-294. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.