Just as smartphones and smart watches have done for other industries, smart meters promise to bring digital technology, and all the possibilities it opens up, to a formerly mundane service: electricity.
By opening up the prospect of two-way communication, such meters could provide the electric utility with precise data about customer use. In return, the utility would offer consumption alternatives to customers, encouraging more ‘off -peak’ use by doling out discounts.
An energy executive at a company based in Europe explained the trade-off on a deeper level: if a utility shared “good, data-rich insights” with customers, then those customers would be more inclined to share even more data. She dubbed the phenomenon to be a “virtuous loop.”
In countries like the UK, where smart meters will be mandatory come 2020, providers and consumers are suspiciously circling one another. Customers see the benefit of having more control over their bills-and possibly doing their part to improve the environment by reducing peak usage and shutting off some environmentally hostile power plants.
For utilities, however, there are numerous advantages. First, the smart meters will cut costs, eliminating the expenses involved in reading meters and resolving billing disputes, as well as improving their reaction time to stolen meters. Second, the dataspewing meters provide a platform for utilities to cross-sell higher-margin services, such as maintenance contracts. And the faster the roll-out, the bigger the lead utilities can get over non-utilities like Google, which has indicated some interest in getting into the business of selling digital meters that would give consumers the power to pick and choose among different providers and their services.
Such scenarios sound remote, however-especially when, as the executive says, some utilities haven’t even begun to make changes in their billing systems. “Unfortunately, there is no ongoing project looking at best practices that could help the whole industry,” says the executive. In a highly competitive industry, where there is an ongoing battle for customers, no company can afford to be left in the dark.