Smart meters foolish mistakes

Smart meters are pretty cool applications that allow the consumer better choices when it comes to utilities usage. Consumer can choose to use power at times when it is cheaper, such as powering the laundry machine later at night.

However, the reception was not all that warm and this is what the article is addressing. It seems that utility companies have neglected basics of engaging consumers and educating them about potentially very useful applications. This created a backlash in adoption rates and spurred some suspicions about the real motives behind smart meters.

Amplify’d from blogs.hbr.org

The Smart Meter Backslide

First, smart meters are only a part of the smart grid — the entire smart grid is a vast array of technologies stretching across the whole of the industry that will be deployed in stages over the next several decades. Smart meters are the source of some of the smart grid's many benefits and costs, but not all of them.

Substantial smart meter benefits stem from their ability to provide dynamic pricing, or rates that vary throughout the day to reflect fluctuations in the cost to produce power. These prices provide incentives for customers to use power at times when it is cheapest. When power use is spread more evenly throughout the day, prices decline, reliability increases, and fewer plants are needed. Smart meters will modestly improve reliability and reduce outage times but also enable customers to have more control over their power use and utilities to adopt far superior business and pricing models.

The lesson here for the utility industry is straight out of Business School 101. If you are changing your relations with customers and spending their money, engage them first! Let customers validate the new benefits themselves. Make them your partners, not your guinea pigs. As the energy industry continues through an era of many product, service, and business model transformations, this rule should remain front and center. Meanwhile, the Smart Meter Backslide of 2010 will make for a great future case study at Harvard Business School.Read more at blogs.hbr.org

 

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