Smart Meter Devices and the Effect of Feedback on Residential Electricity Consumption: Evidence from a Natural Experiment in Northern Ireland

50 Pages Posted: 15 Jun 2011

See all articles by Will Gans

Will Gans

Anna Alberini

University of Maryland - Department of Agricultural & Resource Economics

Alberto Longo

Queen's University Belfast - Institute of Agri-food and Land-Use School of Biological Sciences

Date Written: June 15, 2011

Abstract

Using a unique set of data and exploiting a large-scale natural experiment, we estimate the effect of real-time usage information on residential electricity consumption in Northern Ireland. Starting in April 2002, the utility replaced prepayment meters with “smart” meters that allow the consumer to track usage in real-time. We rely on this event, account for the endogeneity of price and plan with consumption through a plan selection correction term, and find that the provision of information is associated with a decline in electricity consumption of up to 20%. We find that the reduction is robust to different specifications, selection-bias correction methods and subsamples of the original data. At £15-17 per tonne of CO2e (2009£), the smart meter program delivers cost-effective reductions in carbon dioxide emissions.

Keywords: residential energy, electricity demand, feedback, smart meter, information

JEL Classification: Q40, Q41, D8

Suggested Citation

Gans, Will and Alberini, Anna and Longo, Alberto, Smart Meter Devices and the Effect of Feedback on Residential Electricity Consumption: Evidence from a Natural Experiment in Northern Ireland (June 15, 2011). FEEM Working Paper No. 36.2011, Available at SSRN: https://ssrn.com/abstract=1865171 or http://dx.doi.org/10.2139/ssrn.1865171

Anna Alberini (Contact Author)

University of Maryland - Department of Agricultural & Resource Economics ( email )

Symmons Hall, Rm 2200
University of Maryland
College Park, MD 20742-5535
United States
301-405-1267 (Phone)
301-314-9091 (Fax)

Alberto Longo

Queen's University Belfast - Institute of Agri-food and Land-Use School of Biological Sciences ( email )

25 University Square
Belfast, BT7 1NN
Ireland

No contact information is available for Will Gans

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