Smart Grid
Consumer Perspectives
Top Ten Things Consumers Want
from the Grid
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Data
Guidance
Reliability
Control
Comfort
Convenience – and ease of communication with
utilities
Cost Savings – return on investment
Environmental Preservation
National Preparedness
Thoughtful Roll Out
Findings from Focus Groups on Grid
• Smart Grid Awareness is low
• Consumers have a favorable impression of
Smart Grid
Source: Consumer Voices: Summary of Key Findings, May 2012. Smart Grid Consumer Collaborative, http://smartgridcc.org/wp-
content/uploads/2012/05/SGCC-Consumer-Voices-Summary.pdf? Accessed 25 July 2012
Smart Grid Awareness is Low
• Those who had at least heard the term associated smart
grid with the development of new technologies to improve
reliability, efficiency, billing accuracy, and energy
management.
• Those who had not heard the term were asked to speculate
on what a “smart” grid might mean. Their assumptions
focused on improved efficiency, providing more
information to consumers, environmental enhancements,
billing accuracy, and reliability.
• No one brought up concerns about privacy, health issues,
higher bills, etc.
Consumers have a Favorable
Impression of Smart Grid
• With a little prompting on smart grid, participants in focus
groups generally described their overall feelings as
favorable or very favorable.
• Some said they needed more information before
expressing an opinion.
• A few raised concerns about the costs of the
improvements.
• Based on the information provided, key value propositions
varied from person to person and segment to segment.
• No one brought up concerns about privacy, health issues,
higher bills, etc.
Willingness to Pay for Benefits Varies
• Most consumers feel the benefits are significant
but are not willing to pay more
• Some consumers were willing to pay $3-4/month*
for benefits of:
– Improved reliability and restoration
– Increased access to renewable energy
– Availability of better usage information and new pricing
options
– Reduced greenhouse gas emissions and reduced need
for new power plants
* The methodology asked if the benefit was not important, important at no cost,
willing to pay $3-4 per month
Negative comments less impactful than
positive: Most compelling arguments are:
• Smart grid will help prevent blackouts and restore
power faster if they do occur
• Existing components in T&D are decades old and
wearing out
• Power demands are continuing to grow. Adding
grid components will allow demand to be met
• Adding distributed grid will allow renewable
sources to be integrated
• Smart meters will allow consumers to see energy
consumption and make better choices
• A smarter grid is necessary to maintain competitive
advantage
Negative comments less impactful than
positive: Less compelling arguments are:
• Grid improvements are necessary to meet
demands from electric vehicles
• Smart grid projects will create tens of
thousands of jobs and bring $12 billion to
economy in next two years
• Improvements can provide information
instantly for dramatic increases in efficiency
Smart Meter-Enabled Programs
Appeal to Most Consumers
• Time of Use Pricing (TOU)and Peak Time Rebates
(PTR) appealed to over half of participants
• Interest in TOU and PTR is driven both by savings
and altruistic motives such as helping the
environment or preventing outages
• Visibility into pricing is important for TOU and
PTR so consumers can make better choices
• Those preferring PTR like the idea of responding
occasionally for a higher level of reward
Smart Meter-Enabled Programs
Appeal to Most Consumers
• Those who didn’t want to participate in TOU
or PTR cited lifestyle or lack or interest in
managing consumption
• None expressed concern about those who
may be negatively impacted by TOU or PTR
• Most say they are participating in normal
energy saving behaviors
• Many have programmable thermostats but
few use them
What Drives Consumer Adoption
Technology Adoption is governed by:
1. Perceived advantage
2. Risk factors
3. Ease of use
4. Timing of benefits
5. Observability
6. Trialability
7. Price
8. Fit with practices
Challenges with Consumer Adoption
Perceived Advantage
• In the focus groups most were not willing to pay
more, some would pay $3-4/month
• There is an expectation that there would be
feedback on usage allow them to save money
• This raises the questions on to pay the system
including HAN components
• It is difficult to gain support for investment in
systems which work rather well now. Utilities
have done very well in managing the systems so
any problems are somewhat transparent
Challenges for Consumer Adoption
Ease of Use
• Most consumers in the focus groups have
programmable thermostats, yet many do not
use them
• This represents an inconsistency with
consumers saying the want to save money, but
they will not invest time to program the
thermostat
Challenges for Consumer Adoption
Timing of Benefits
• Many of the benefits to investment of the grid
accrue in the future
• It’s difficult to get consumers to invest in
problems they are not currently experiencing
– When gas prices rise, fuel efficiency becomes a
problem. We know we need to reduce our
consumption of fossil fuels, yet investment to
move this direction has been slow
Challenges for Consumer Adoption
Observability
• Benefits to the smart grid are largely
transparent
– If my power went out every week, I would happily
pay to fix it
Challenges for Consumer Adoption
Trialability
• The ability to alter consumers behavior to
reduce energy consumption is something we
can’t try before we invest in Grid
• This represents a smaller issue and can
probably be overcome through
communication and demonstrations
Challenges for Consumer Adoption
Price
• Regulators are pushing utilities to show consumer
benefit for investments passed through to consumer
• Meta analysis of pilot studies show that average savings
is 3.8%.
• Simple awareness of consumption may alter some
lifestyle choices – we might use the delay setting on the
washer
• The HAN will probably emerge over a decade or more
– Only if the premium for Grid enabled is small
– Marginal benefit (payback) of enabling appliance is low
– Appliances last 7-14 years
Challenges for Consumer Adoption
Fit with Current Practices
• On a daily basis we do not think about our
power consumption so we are not used to
managing the process
• It may take a while before people do their
laundry overnight
– The capability to do this already exists