Vast Majority of Consumers Suffer Financial “Net Loss” with Smart Meters

by K.T. Weaver, SkyVision Solutions

Frontier Economics and Consumer Net Loss with Smart MetersThis article provides specific information to counter claims made by smart meter proponents that smart meters provide consumers with financial benefits, i.e., saving energy and reducing their utility bill.  In addition, this article presents information to help disentangle how policy makers conflate the topics of grid modernization, smart meter deployments, and sound environmental policy.

Inflated or False Claims on How Smart Meters Help Consumers Save Money

As an attempt to convince consumers that smart meters are “good” for them, they are fed propaganda-like messages regarding “consumer empowerment” by smart meter proponents.  In short, and as stated by the Attorney General for the state of Illinois:

“The pitch is that smart meters will allow consumers to monitor their electrical usage, helping them to reduce consumption and save money. …  Consumers don’t need to be forced to pay billions for so-called smart technology to know how to reduce their utility bills.  We know to turn down the heat or air conditioning and shut off the lights.”

We certainly do not need to spend billions and billions of dollars on smart meters for the consumer to know that if you start shutting off switches or changing the thermostat setting that you can save energy.  The whole concept is actually quite absurd.  For those consumers who do want more detailed usage information, there are a number of products available online or at your home improvement store that can provide the same or better information than with a smart meter.

To help counter some of the claims, ridiculous as they may be as to how smart meters are somehow needed to help consumers save money, I have already written a number of articles highlighting studies and auditor-general reports that reveal that smart meters offer no net benefits to consumers.  Among the past articles supporting this assertion are the following:

Adding to the research and auditor-general-type reports covered in the above articles, I will now introduce the results of two (2) additional reports that apparently have been ignored by smart meter proponents and policy makers.

A 2011 report for the BEUC, the European Consumer Organization [7], found it not to be true that smart meters will help households reduce energy consumption by up to 15% (as claimed by earlier reports).  An analysis of six (6) scientific studies on “the use of meters reveals that the actual energy savings average between 2-4% in the best cases where consumers have clearly opted for their use.”  More specifically, the findings were as follows:

“From the six scientific studies, we see that in best cases a consumption reduction of 2-4% can be expected in the short term. …  The best cases include a smart meter that is linked to an IHD (direct feedback) or to accurate billing, with energy efficiency advice.”

“[S]mart meters are not instruments that deliver energy savings by themselves.  Even with advanced functions as an IHD, consumers who are not already minimally interested by energy issues do not appropriate [or make use of] smart meters.”

“We have seen that current systems of feedback associated with smart meters can yield to a reduction of 2-4% of electricity consumption when consumers have opted for its use.”  

No effect is observed when smart meters are installed without the explicit agreement of consumers.  And the vast majority of consumers are today probably not interested in any kind of feedback.”

“In conclusion, without a prior motivation to save energy, feedback is useless.  Besides motivation, capabilities such as knowledge, money and skills are important factors to effectively [make use of] feedback and accordingly change energy-using habits.  As many experiences show a ‘drawback’ effect, the motivation towards energy savings must be frequently restored.  But the sole presence of an IHD [in addition to the smart meter] is not enough to maintain the attention.”

An obligatory smart meter rollout is therefore not advised.”

At this point, I should probably just say, “I rest my case.”  But there is an additional study that provides an even more detailed analysis.

In 2011, Frontier Economics Ltd of London investigated the economic potential of using smart electricity meters for German households [8].  This study assessed “the overall economic benefit and the respective costs that would be generated by the installation of smart meters in various types of household.”

Frontier Economics developed a model based on 200 different types of households in order to assess which consumers could financially benefit from smart meters.  The differentiation was made according to the expected energy-saving potential through different characteristics of the households: size of the dwelling, number of persons, electricity consumption, affinity for technologies, and readiness to use a smart meter.  A somewhat unique aspect of this model was to take into account the diversity of consumers, not only regarding consumption but also regarding motivation and skillfulness.

Some of the conclusions of the Frontier Economics study are as follows:

Net benefits will be maximised if households retain the freedom to decide whether to install a smart meter, and choose which technology to install. …  Ultimately, households themselves are best placed to identify whether the installation of a smart meter is worthwhile, and which technology option will be most effective.”

“The highest net benefits in our analysis are generated by those scenarios in which households are granted complete freedom of choice.  These scenarios benefit from the fact that due to the significant heterogeneity across households, individual households are best placed to decide whether a smart meter is worthwhile and which technology option will deliver the greatest benefit.”

Mandatory national roll outs always result in a negative net benefit.”

To further illustrate that mandatory deployment of smart meters results in a financial “net loss” for households, review Figure 5 below from the Frontier Economics report.

Frontier_Distribution of Benefits for Smart Meters

“Figure 5 presents an example of the net benefits (i.e. the benefits after deducting installation and operational costs) per household in the ‘Mandatory rollout EDL 40’ scenario (where all German households are obliged to have an EDL 40 meter installed).

The green area indicates those households for which the benefits would exceed the costs in this scenario.  Net benefits are only positive in around 15% of households.  The red areas in Figure 5 represent the net loss in those households that are obliged to have a smart meter installed even though the expected advantages do not justify installation costs.”

Whether or not the costs associated with smart meter installations could result in a net benefit for consumers depends on a number of factors, including:

  • Annual household electricity consumption;
  • Specific consumption patterns based upon the types of appliances existing within the home and when they are used based upon the nature of the consumers in the home;
  • Motivation to conserve energy which is typically also dependent on the ability to make additional investments that not all consumers can afford; and
  • Load shifting potential or ability for each household.

Most components of household consumption (cooking, lighting etc.) cannot be easily shifted since they are always required at specific times in the day.  As such, only a small proportion of household consumption can potentially deliver load reduction or shifting benefits.

Figure 6 shows a comparison of different smart meter deployment scenarios considered by Frontier Economics.  A forced or mandatory deployment always delivers negative results.  Only in voluntary or selective deployments can smart meters be economically justified.  In those cases, consumers are either motivated to conserve energy and/or have sufficient means and load profile to engage in energy reduction and energy efficiency measures to justify the smart meter investments.

Frontier_Smart Meter Net Benefits verus Deployment Options

Policy Makers Conflate Topics of Grid Modernization, Smart Meter Deployments, and Sound Environmental Policy

What has just been presented regarding smart meters not providing any positive financial net benefits to consumers is not rocket science.  It is common sense which I have been able to now fully substantiate with published studies and reports.  So are policy makers just stupid as they continue to deploy smart meters?  Possibly so, and these same policy makers never mention the tremendous consumer risks [9] associated with smart meters and continue to tout the already debunked purported benefits.

In addition, for those few consumers who might be motivated to use smart meters to somehow conserve energy, they will pay a yet to be quantified price related to a loss of privacy and a loss of control over one’s appliances, comfort, and health [9][10].

One aspect to explain why smart meters continue to be deployed relates to the fact that they enable industrial profiteering and government sanctioned surveillance [11].  But beyond that, policy makers appear to be under the illusion that smart meters meaningfully contribute to policy objectives related to modernizing the electric grid and achieving sustainability goals, i.e., “to encourage energy efficient behavior” [8].  In this regard, the report by Frontier Economics provides additional insight:

A mandatory nationwide roll out of smart meters does not deliver environmental policy objectives in the most efficient way. … Our analysis shows that it does not make economic sense to introduce smart meters on a nationwide basis in Germany.  However, support for a national roll out is often based on environmental policy rather than on economics.  In other words, it is considered that the overwhelming policy objective is to induce significant energy savings, and smart meters are considered an effective way of doing this.”

It is very likely the additional funds required for a mandatory nationwide roll out of smart meters could generate significantly greater environmental policy outcomes if they are spent elsewhere.”

So based upon the facts, smart meters will not “induce significant energy savings.”  We would be much better off spending limited resources elsewhere rather than wasting them on smart meters.

In the United States, it appears that smart meters are just an off-the-shelf item where money can be spent quickly under the guise that they are somehow promoting sustainability.  As characterized by Tim Schoechle, Ph.D. in 2014:

A senior Department of Energy official stated that, “We had a huge amount of money that had to be spent on smart grid, and we didn’t have anything off-the-shelf that we could call smart grid except these meters that were designed 20 years ago [12].”

As opposed to using what is really outdated “smart” meter technology, modernization of the electric grid should relate to measures taken to technically improve the operation and reliability of the electric grid, not to monitor and control the behavior of individual consumers.  More important to the objective of modernizing the electric grid would be to improve wide-area situational awareness through advanced tools that would monitor and control the conditions of the grid at the neighborhood or sub-station level.  This could include, for example, the use of “smart” switches that communicate with each other to reroute electricity around a troubled line [13].

Moreover, the modern electric grid as envisioned by the United States Department of Energy (DOE) in 2009 is one which is more reliable, secure, economical, efficient, environmentally friendly, and safer [14].  Based upon the substantial evidence provided at this website and information presented within this article, broad-based deployments of smart meters arguably conflict with each one of these six focus areas that the DOE views as the “foundation” for the “Smart Grid.”

So rather than contributing to sustainability or helping to create a modernized electric grid, smart meter deployments only act as a diversion of financial resources away from investments that would be more effective at reducing consumption and improving energy efficiency.  In addition, smart meter deployments make the electric grid less secure, less safe, and certainly smart meters are not “environmentally friendly.”

As stated by the Frontier Economics report, smart meters represent a diversion of resources away from investments which would “very likely … generate significantly greater environmental policy outcomes if they are spent elsewhere.”

In the future, I am considering to write a separate article on how to modernize the electric grid without smart meters, but one major utility company has essentially already documented how this is possible.  I have highlighted the filings by Northeast Utilities (which later became Eversource Energy) in previous articles at this website:

Additional supporting documentation for why broad-based smart meter deployments are unnecessary includes the following:

We just need policy makers to stop and think about what they are doing and read and acknowledge what has already been written.


Rather than disseminating propaganda on how the consumer will be “empowered” by smart meters to save money, consumers should more realistically be told that the vast majority of consumers will experience a “net loss” and lose money from smart meter deployments.  Smart meter deployments to the extent that they exist should be totally voluntary.  There is absolutely no basis for broad-based smart meter deployments i.e., “the expected advantages do not justify installation costs,” as stated by Frontier Economics.

Smart meters only have the potential to benefit consumers who explicitly agree to their installation and therefore are motivated to use them.

Policy makers who promote smart meter installation often conflate smart meter deployments with the topics of electric grid modernization and achieving sustainability objectives.  In actuality, smart meter deployments (based upon current technology) fly in the face of the vision for a modernized electric grid that is more reliable, secure, economical, efficient, environmentally friendly, and safer.  Additionally, as stated by Frontier Economics:

“’Smart Grid’ methods for intelligent grid control (e.g. through variable control of sub-stations etc) generate economic benefits for network operation in particular.  However, these methods do not rely on the introduction of smart meters, since a particular metering solution is not essential for the centralized operation of grid components and technical devices.”

Furthermore, again as stated by Frontier Economics:

“As well as having negative net benefits, we do not consider a national roll out of smart meters to be the most cost-effective way to achieve the overriding policy objective of energy efficiency.”

In summary, smart meter deployments are a waste of money and expose the consumer to tremendous risks.  Smart meters do not induce energy savings for the vast majority of consumers, and modernization of the electric grid does not rely on smart meter deployments.  To the contrary, smart meters act as a diversion of financial resources away from measures that could otherwise modernize the electric grid and achieve sustainability objectives. 

References and Notes

[1] “Smart Meters Have Failed and Were a Dumb Investment,” SkyVision Solutions Blog Article, December 2014, at

[2] “Smart Meter Rollout a Waste of Money, According to Study,” SkyVision Solutions Blog Article, December 2014, at

[3] “President Obama Touts ‘Smart Meters’ at Clean Energy Summit,” SkyVision Solutions Blog Article, August 2015, at

[4] “Consumers and Environment Unlikely to Benefit from Smart Meters, Confirms Latest Research,” SkyVision Solutions Blog Article, September 2015, at

[5] “Smart meters giving Victorian consumers ‘no benefit’ on electricity bills, auditor-general says,” SkyVision Solutions Blog Article, September 2015, at

[6] “Families Punished by Smart Meters and TOU Rates, Recent Study Confirms, SkyVision Solutions Blog Article,” January 2016, at

[7] “Empowering Consumers through Smart Metering,” Report for BEUC, the European Consumer Organization, December 2011, available at

[8] “Economic Potential of Smart Electricity Meters in Germany,” January 2011, Frontier Economics Ltd; available at

Prominently featured in this article is “Figure 5” from the Frontier Economics report.  Critics can say that the figure may only be applicable for German households and only applies to the specific assumptions made for purposes of the report.  This is true, but the detailed nature of the model used for the study provides results that are intuitively more realistic and plausible as compared to using an average or “representative” household as explained in the Frontier Economics report.  Granted the specific numerical values on the chart may not apply outside Germany, but the general character of the chart with much more “red” than “green” is arguably correct for all mandated smart meter deployments.

For example, as recently explained by Nick Hunn of WiFore Consulting [19], the Department of Energy & Climate Control (DECC) in Great Britain has assumed that all future gas and electric customers will reduce energy consumption by 3% per year for basically forever, based upon information feedback from IHDs and smart meters.  Hunn explains how this assumption is wrong and that a thorough study in the Netherlands showed that the “average saving” was closer to 0.6%.  In addition, it is not clear whether some or all of that savings could just be due to the natural replacement of light bulbs and appliances over time that happen to be more efficient.  Then taking into account the huge installation costs associated with smart meter deployments, you will have a financial “net loss” for the consumer.

On the topic of load shifting ability, it is expected that the primary difference between household load profiles in Germany versus the United States would be higher penetration of central air conditioning (A/C) in the United States.  For example, Eversource estimates that within its service territory in the northeastern portion of the United States that the central A/C penetration is 38% for two to three months per year [16].  In warmer states, central A/C penetration likely approaches 85% [20].  According to Eversource, residential appliance data suggest that there is little discretionary load beyond A/C.  If this is the case, it is suggested that customers desiring to participate in demand response programs be equipped with so-called “smart” thermostats that operate through household Internet routers.  This would completely eliminate any need for utility installed smart meters for demand response programs.

[9] SkyVision Solutions has previously summarized consumer risks associated with smart meter deployments as:

  • The financial burden imposed by smart meters where most consumers will suffer a “net loss.”
  • Privacy invasions due to granular collection of energy usage data which represents a “gold mine” to others.
  • Potential health risks and actual adverse health effects caused by the additional electrosmog created by the smart meters and their associated infrastructure.
  • The increased risk of household fires due to smart meter safety issues and ‘catastrophic failures’ that are expected with smart meters as opposed to traditional usage meters.
  • Societal implications of smart grid and smart meter cybersecurity threats which can result in catastrophic events affecting widespread areas of the electric grid.

[10] “Consumers Resist Being ‘Systematically Controlled’ by ‘Smart’ Meters,” SkyVision Solutions Blog Article, February 2016, at

[11] ‘Smart’ Meters Represent Industrial Profiteering and Government Sanctioned Surveillance, According to Study,” SkyVision Solutions Blog Article, January 2016, at

[12] “The Smart Meter Canard,” SkyVision Solutions Blog Article, March 2014, at

[13] “Electricity Grid Modernization,” GAO Report #GAO-11-117, January 2011, page 5; complete document available at

[14] “The Modern Grid Strategy, A Vision for the Smart Grid,” developed by the National Energy Technology Laboratory for the U.S. Department of Energy, Office of Electricity Delivery and Energy Reliability, June 2009; available for review at

[15] “Major U.S. Utility Says ‘No Rational Basis’ for Mandating Smart Meters,” SkyVision Solutions Blog Article, February 2014, at

[16] “Smart Meters Not Necessary to Modernize the Electric Grid Says a Major U.S. Utility.” SkyVision Solutions Blog Article, September 2015,

[17] “Universal Deployment of Smart Meters May Be Unnecessary in New York to Support REV Mandates,” SkyVision Solutions Blog Article, October 2015, at

[18] Reply Comments by SkyVision Solutions in Response to Comments Pertaining to the Staff Proposal regarding the Distributed System Implementation Plan Guidance (“DSIP Guidance Proposal”); New York Public Service Commission Case 14-M-0101 – Proceeding on Motion of the Commission in Regard to Reforming the Energy Vision, December 2015, available at

[19] “UK Parliament Calls for Evidence on Smart Metering Programme,” by Nick Hunn, January 2016, at

[20] “Air conditioning in nearly 100 million U.S. homes,” U.S. Energy Information Adminstration, at

Copyright Notice © SkyVision Solutions and Smart Grid Awareness, 2013 – 2016.  Unauthorized use and/or duplication of original material from this site without express and written permission from this site’s author and/or owner is strictly prohibited.  Excerpts and links may be used, provided that full and clear credit is given to SkyVision Solutions and Smart Grid Awareness with appropriate and specific direction to the original content.

About SkyVision Solutions

Raising public awareness and finding solutions for smart grid issues related to invasions of privacy, data security, cyber threats, health and societal impacts, as well as hazards related to radiofrequency (RF) radiation emissions from all wireless devices, including smart meters.
This entry was posted in Smart Grid, Smart Meters, and RF Emissions and tagged , , , . Bookmark the permalink.

7 Responses to Vast Majority of Consumers Suffer Financial “Net Loss” with Smart Meters

  1. xparadoxnu says:

    Why is there zero mention in this article of the long term (macro) purpose of smart metering? One of the biggest problems both economically and environmentally surrounding this topic is the addition of power generation plants. If the energy companies can devise ways to lower peak usage, that delays/avoids the need for building more plants….at an enormous cost both economically and environmentally.. By combining load-shedding with charging peak rates to discourage high usage during peak hours (both enabled by smart metering), this goal is achieved.

    Shame on SkyVision Solutions and for not educating your readers on this. I am 100% certain you are fully aware of this, yet are refusing to give the complete picture.

    • Articles at this site are frequently written on a topical basis to highlight published reports and studies. Over 250 articles have been posted at this site on various topics and issues related to the smart grid and smart meters. Several articles address the “macro purpose of smart metering” such as:

      Little Justification for ‘Smart’ Meters Unless to Serve as “Crude and Heavy-Handed Price Mechanism” to Change Consumer Behavior at

      ‘Smart’ Meters Represent Industrial Profiteering and Government Sanctioned Surveillance, According to Study at

      ‘Smart’ Meters are ‘Guilt Meters’ and an Example of a ‘Fraudulent, Bogus Innovation’ at

      Consumers and Environment Unlikely to Benefit from Smart Meters, Confirms Latest Research at

      But this site has little interest in publishing government and industry propaganda based upon biased/false assumptions, wishful thinking, and willful ignorance. In addition, this site approaches the subject of smart meters primarily from a consumer protection perspective.

    • bcfreedom says:

      Actually, usage is already in rapid decline across the board. But, of course, proponents fail to bring these stats to the table and insist on constantly telling us ‘we need more power to keep the lights on’ when in reality, there is not one jurisdiction GLOBALLY that is having more demand… at all. And when we factor in flatlining demand, with population increase, we are already using less power. Also consider, TOU power and smart appliances will just shift ‘peak’ loads, to different times, so there is no solution there. The meter also needs power to run, as to do routers and all else smart grid. So if the concern is reducing usage (which is a complete lie because no corporation introduces products that get people to use less of what they sell) why are they actually increasing usage? Further the power demands of data centers (to keep, track and sell smart meter data) are huge power hogs, just like cyber security centers, and the power lines, transformers and all else involved. So, the reality is? That smart meters use WAY more power than they save when you factor everything in. So, if it is your choice to direct shame onto someone, then perhaps you should to that to yourself and the grid you are promoting. Utilities are scrambling to find alternate revenue streams (data) for lack of demand of power. Also note, the power required to replace meters every 5-7 years vs 20-30 years. Then the routers and all else. So where are the power savings? Nowhere. The ‘peak load’ argument is a sham, they were able to cope with that before people as a whole, per capita, commercial, residential… whatever category were using less power. Either you don’t know what you are talking about OR you are just parroting lines for utilities that are in a self-terminating feedback loop from which, they will never recover. But the primary issue to that is that the very governments that own their shares and bonds in their pension funds are at risk of MASSIVE losses if this continues, thus the smart grid is for that, not to reduce demand, not to reduce peak demand, not to be green, but to allow them to sell data to make up for the lack of power sales. I would suggest you do some thorough research, as SkyVisions does before you make comments which are clearly aligned with the con artist utilities and have no basis in reality, nor truth.

  2. deanna munson says:

    i LOVE you ,thank you for putting this all down on accessible “paper” so all can see.i HATE these meters,they have caused me more physical hell and on going torture than i ever thought anything could.watching the bats fall from trees and the frogs disappear just weeks after deployment broke my heart ,and the ongoing exposure to absolutely mind boggling amounts of dirty electricity and wifi signalling has accelerated the aging process of mind and body 200 fold for me .i was one of those “lucky few” that recieved the smartgrid data collector on my low income apartment .yeah ,”just move” everyone says ,well try that on an income of 733$ month ,no energy ,no coherency ,no brain function ,and no where to move to when they have the entire tricounty region and beyond “deployed” with this insanity.the health reactions to this technology arent just permanent ,they increase substantially and extend to every electrical and communication device of the modern day .was perfectly comfortable with my neighbors wifi,microwave ovens,and using a cell phone BEFORE these death meters came ,now i not only need to find a place to exists without smartmeters but need to find a cave in some rock mountain somewhere they havent already deployed their damned “SMART environmental sensor networks” that are now deployed in every waterway,coastline,and nature area in existence ….their even deploying these wireless sensors under sidewalks and bike lanes ,not to mention fish hatcheries and sanctuaries …then when all the fish ,birds,and aquatic/marine life die “scientists/experts are baffled” …or..they blame “climate change” and deploy MORE

  3. Sonia R. says:

    Let’s explore electrical energy choices available to consumers by taking merely one appliance in the household as an example, this being a washer. Choices a consumer can make here are :
    Wash daily or 1xwk?**Partial load or full load?**Cold water or hot?**Pulsed or standard setting?**Off peak or Peak usage? My goodness! How can I ever make such complicated decisions without a piece of crap meter telling me what I need to do? Guess I’ll have to use the computer God gave me. It’s called a brain. If you don’t make the decisions the utilities want you to make, don’t worry. They are all planning on implementing Time Of Use pricing to “encourage” you to use energy at their idea of the “right” time. And if you still, for some reason, cannot seem to get with the “program,” the utility can simply turn off your device, in this case your washer, in the middle of a laundry cycle. What do I do now, since I have to wash clothes for 5 children to wear for the following week? Pass out the deodorant!!!

    Bottom line, the utilities will use the SM to make billions off of ratepayers by selling to 3rd parties granular data they collect on our personal habits/usage for all electrical devices in our home enabling manufacturers and wireless interests to make zombie users of us for every single appliance/device they design and we buy. And here’s the icing on the cake…hackers can get into your personal data through any device that has a transmitter on it, as most devices are being manufactured today to be SM compatible.

    Turn the tables and turn out at hearings and your state legislature and voice your objections! Otherwise, don’t whine later. It will be too late.

  4. Kate says:

    This article is a Godsend for us here in Maryland. BGE is now coming in for their rate case where they will get rate increases approved by the PSC by showing financial and energy savings to the customer from smart meters. A million thanks for this last article as well as the many others you have written.


    • Thanks. A lot of times it is all about rosy assumptions. Look to see if utility assumes a certain savings per “representative” customer. In UK, government rollout assumes a 3% reduction in energy usage per year forever for each customer due to smart meters and available in-home displays. Even if this occurs overall, it may just be due to people changing out light bulbs and buying new appliances over time with no relation to smart meters. There can be lots of tricks played with the numbers.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s