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Reducing household electricity demand through smart metering: The role of improved information about energy saving

James Carroll, Sean Lyons () and Eleanor Denny ()

Energy Economics, 2014, vol. 45, issue C, 234-243

Abstract: The international roll out of residential smart meters has increased considerably in recent years. The improved consumption feedback provided, and in particular, the installation of in-house displays, has been shown to significantly reduce residential electricity demand in some international trials. This paper attempts to uncover the underlying drivers of such information-led reductions by exploring two research questions. First, does feedback improve a household's stock of information about potential energy reducing behaviours? And second, do improvements in such information help explain the demand reductions associated with the introduction of smart metering and time-of-use tariffs? Data is from a randomised controlled smart metering trial (Ireland) which also collected extensive information on household attitudes towards energy conservation and self-reported stocks of information related to energy saving. As with previous results in Ireland, we find that participation in a smart metering programme with time-of-use tariffs significantly reduces demand. Although treated households also increased their self-reported energy-reducing information, such improvements are not correlated with demand reductions in the short-run. Given this result, it is possible that feedback and other information provided in the context of smart metering are mainly effective in reducing and shifting demand because they act as a reminder and motivator.

Keywords: Residential electricity demand; Smart meters; Consumption feedback; Household knowledge; Conservation motivations (search for similar items in EconPapers)
JEL-codes: D04 D10 D12 Q41 Q48 Q49 (search for similar items in EconPapers)
Date: 2014
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