IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v41y2012icp790-797.html
   My bibliography  Save this article

Preparing for smart grid technologies: A behavioral decision research approach to understanding consumer expectations about smart meters

Author

Listed:
  • Krishnamurti, Tamar
  • Schwartz, Daniel
  • Davis, Alexander
  • Fischhoff, Baruch
  • de Bruin, Wändi Bruine
  • Lave, Lester
  • Wang, Jack

Abstract

With the enactment of the 2009 American Recovery and Reinvestment Act, U.S. President Obama made a public commitment to a new approach to energy production and transmission in the United States. It features installing smart meters and related technologies in residential homes, as part of transforming the current electrical grid into a “smart grid.” Realizing this transformation requires consumers to accept these new technologies and take advantage of the opportunities that they create. We use methods from behavioral decision research to understand consumer beliefs about smart meters, including in-depth mental models interviews and a follow-up survey with a sample of potential smart meter customers of a major U.S. mid-Atlantic electricity utility. In both the surveys and the interviews, most respondents reported wanting smart meters. However, these preferences were often based on erroneous beliefs regarding their purpose and function. Respondents confused smart meters with in-home displays and other enabling technologies, while expecting to realize immediate savings. They also perceived risks, including less control over their electricity usage, violations of their privacy, and increased costs. We discuss the policy implications of our results.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:enepol:v:41:y:2012:i:c:p:790-797
    DOI: 10.1016/j.enpol.2011.11.047
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421511009244
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2011.11.047?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. Brophy Haney, A. & Jamasb, T. & Pollitt, M.G., 2009. "Smart Metering and Electricity Demand: Technology, Economics and International Experience," Cambridge Working Papers in Economics 0905, Faculty of Economics, University of Cambridge.
    2. Einhorn, Hj & Hogarth, Rm, 1981. "Behavioral Decision-Theory - Processes Of Judgment And Choice," Journal of Accounting Research, Wiley Blackwell, vol. 19(1), pages 1-31.
    3. Kathleen Spees & Lester Lave, 2008. "Impacts of Responsive Load in PJM: Load Shifting and Real Time Pricing," The Energy Journal, , vol. 29(2), pages 101-122, April.
    4. 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.
    5. Isamu Matsukawa, 2004. "The Effects of Information on Residential Demand for Electricity," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 1-18.
    6. Svenson, Ola & Nilsson, Goran, 1986. "Mental economics: Subjective representations of factors related to expected inflation," Journal of Economic Psychology, Elsevier, vol. 7(3), pages 327-349, September.
    7. Lucas W. Davis, 2011. "Evaluating the Slow Adoption of Energy Efficient Investments: Are Renters Less Likely to Have Energy Efficient Appliances?," NBER Chapters, in: The Design and Implementation of US Climate Policy, pages 301-316, National Bureau of Economic Research, Inc.
    8. Ueno, Tsuyoshi & Inada, Ryo & Saeki, Osamu & Tsuji, Kiichiro, 2006. "Effectiveness of an energy-consumption information system for residential buildings," Applied Energy, Elsevier, vol. 83(8), pages 868-883, August.
    Full references (including those not matched with items on IDEAS)

    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. Rious, Vincent & Perez, Yannick & Roques, Fabien, 2015. "Which electricity market design to encourage the development of demand response?," Economic Analysis and Policy, Elsevier, vol. 48(C), pages 128-138.
    2. Bergaentzlé, Claire & Clastres, Cédric & Khalfallah, Haikel, 2014. "Demand-side management and European environmental and energy goals: An optimal complementary approach," Energy Policy, Elsevier, vol. 67(C), pages 858-869.
    3. Cédric Clastres & Haikel Khalfallah, 2020. "Retailers' strategies facing demand response and markets interactions," Working Papers hal-03167543, HAL.
    4. Claire Bergaentzlé & Cédric Clastres, 2013. "Demand side management in an integrated electricity market: what are the impacts on generation and environmental concerns ?," Post-Print halshs-00839116, HAL.
    5. Strong, Derek Ryan, 2017. "The Early Diffusion of Smart Meters in the US Electric Power Industry," Thesis Commons 7zprk, Center for Open Science.
    6. Xu, Xiaojing & Chen, Chien-fei, 2019. "Energy efficiency and energy justice for U.S. low-income households: An analysis of multifaceted challenges and potential," Energy Policy, Elsevier, vol. 128(C), pages 763-774.
    7. Clastres, Cédric & Khalfallah, Haikel, 2021. "Dynamic pricing efficiency with strategic retailers and consumers: An analytical analysis of short-term market interactions," Energy Economics, Elsevier, vol. 98(C).
    8. 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.
    9. Schleich, Joachim & Klobasa, Marian & Gölz, Sebastian & Brunner, Marc, 2013. "Effects of feedback on residential electricity demand—Findings from a field trial in Austria," Energy Policy, Elsevier, vol. 61(C), pages 1097-1106.
    10. Schleich, Joachim & Faure, Corinne & Klobasa, Marian, 2017. "Persistence of the effects of providing feedback alongside smart metering devices on household electricity demand," Energy Policy, Elsevier, vol. 107(C), pages 225-233.
    11. Cédric Clastres & Haikel Khalfallah, 2021. "Dynamic pricing efficiency with strategic retailers and consumers: An analytical analysis of short-term market interactions," Post-Print hal-03193212, HAL.
    12. Eid, Cherrelle & Codani, Paul & Perez, Yannick & Reneses, Javier & Hakvoort, Rudi, 2016. "Managing electric flexibility from Distributed Energy Resources: A review of incentives for market design," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 237-247.
    13. Mingyue Li & Jingjing Wang & Kai Chen & Lianbei Wu, 2020. "Willingness and Behaviors of Farmers’ Green Disposal of Pesticide Packaging Waste in Henan, China: A Perceived Value Formation Mechanism Perspective," IJERPH, MDPI, vol. 17(11), pages 1-18, May.
    14. Gerd Gigerenzer, 1997. "Bounded Rationality: Models of Fast and Frugal Inference," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 133(II), pages 201-218, June.
    15. Arlan Brucal & Michael Roberts, 2015. "Can Energy Efficiency Standards Reduce Prices and Improve Quality? Evidence from the US Clothes Washer Market," Working Papers 2015-5, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
    16. Abolhosseini, Shahrouz & Heshmati, Almas & Altmann, Jörn, 2014. "A Review of Renewable Energy Supply and Energy Efficiency Technologies," IZA Discussion Papers 8145, Institute of Labor Economics (IZA).
    17. Chorus, Caspar & van Cranenburgh, Sander & Daniel, Aemiro Melkamu & Sandorf, Erlend Dancke & Sobhani, Anae & Szép, Teodóra, 2021. "Obfuscation maximization-based decision-making: Theory, methodology and first empirical evidence," Mathematical Social Sciences, Elsevier, vol. 109(C), pages 28-44.
    18. S. Larsson & G. R. Chesley, 1986. "An analysis of the auditor's uncertainty about probabilities," Contemporary Accounting Research, John Wiley & Sons, vol. 2(2), pages 259-282, March.
    19. Zhou, Yang & Shi, Zhixiong & Shi, Zhengyu & Gao, Qing & Wu, Libo, 2019. "Disaggregating power consumption of commercial buildings based on the finite mixture model," Applied Energy, Elsevier, vol. 243(C), pages 35-46.
    20. Yu‐Lin Hsu & Gavin C. Reid, 2021. "Two‐stage decision‐making within the firm: Analysis and case studies," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(6), pages 1355-1373, September.

    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:enepol:v:41:y:2012:i:c:p:790-797. 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/enpol .

    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.