Even though energy mavens have been advocating smart meter deployments for nearly a decade, an IBM survey of 10,000 people in 15 countries shows that consumers are confused about what a smart grid is and what it means to them. It’s startling new evidence that if you want a smarter planet, you have to communicate better about it.
Sixty percent of those surveyed did not know the meaning of the terms “smart grid” or “smart meters.” Half of them didn’t understand the term “time of use pricing,” which is essential to understanding the benefits these technologies offer such as improved reliability, lower costs and increased efficiency. Thirty percent were unaware of the basic mechanism used for charging for electricity–the amount paid per kilowatt hour.
This confusion helps explain why the consumer uptake has been slower than hoped for, according to Michael Valocchi, IBM’s vice president for Global Energy & Utilities. His prescription: Utilities, regulators, government officials and technology companies need to go back to basics when communicating with consumers. “Today, the industry is focused on engineering and regulatory matters. All the companies in the ecosystem have to connect better with the consumer.”
The main problem, according to Valocchi, is that the industry has made things too complicated. Consumers are confused by the industry jargon and overwhelmed by the complex options being offered to them. “If you give the consumer too much information and too many choices, it leads to inactivity,” he says. “It’s like offering a shopper the choice of 10 jams in a supermarket. They can become intimidated and demotivated when a decision becomes too complex.”
Complicating matters further, consumers sometimes seem to act contrary to their own best interests when it comes to electricity use. For instance, even though smart grids are designed in part to reduce energy costs, including consumers’ monthly bills, consumers sometimes resist the changes. Valocchi urges utilities to examine consumer attitudes toward energy usage through the lens of behavioral economics, which could provide companies with better insight into the thoughts, motivations and misconceptions of consumers and help them change the way utility customers react.
For example, the survey results showed that, compared to past surveys, financial incentives are no longer the overwhelmingly important factor guiding consumers to decrease their energy consumption. Younger consumers are motivated strongly by environmental concerns and people over age 55 cite the health of their national economies as a key motivator for behavioral change. This analysis suggests that utilities should devise communications strategies targeting different demographic groups separately. “Cost is still important, but it’s not the only thing,” says Valocchi.
The fact is, the adoption of smart grids is crucial to the sustainability of life on the planet. But for smart technologies to be accepted more readily, attitudes must change on all sides. And changing attitudes starts with changing the way we talk about things.