Reducing Electricity Demand through Smart Metering: The Role of Improved Household Knowledge

The international rollout 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 knowledge of energy reducing behaviors? And second, do knowledge improvements explain demand reductions? Data is from a randomized controlled smart metering trial (Ireland) which also collected extensive information on household attitudes towards and knowledge of electricity use. Results show that feedback significantly increases a household’s knowledge but improvements are not correlated with observed demand reductions. Increasing the level of knowledge ceteris paribus is therefore unlikely to bring short-run demand reductions in residential electricity markets. Given this result, it is possible that feedback acts mainly as a reminder and motivator, rather than an educational tool