Smart meter devices and the effect of feedback on residential electricity consumption: Evidence from a natural experiment in Northern Ireland

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    Using a unique set of data and exploiting a large-scale natural experiment, we estimate the effect of real-time usage information on residential electricity consumption in Northern Ireland. Starting in April 2002, the utility replaced prepayment meters with advanced meters that allow the consumer to track usage in real-time. We rely on this event, account for the endogeneity of price and payment plan with consumption through a plan selection correction term, and find that the provision of information is associated with a decline in electricity consumption of 11-17%. We find that the reduction is robust to different specifications, selection-bias correction methods and subsamples of the original data. The advanced metering program delivers reasonably cost-effective reductions in carbon dioxide emissions, even under the most conservative usage reduction scenarios.

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    DOI

    Original languageEnglish
    Number of pages15
    Pages (from-to)729-743
    JournalEnergy Economics
    Journal publication dateMar 2013
    Volume36
    Early online date04 Dec 2012
    DOIs
    Publication statusPublished - Mar 2013

    ID: 2482712