Abstract

With the enactment of the 2009 American Recovery and Reinvestment Act, U.S. President Obama made a public commitment to a new approach to energy production and transmission in the United States. It features installing smart meters and related technologies in residential homes, as part of transforming the current electrical grid into a "smart grid." Realizing this transformation requires consumers to accept these new technologies and take advantage of the opportunities that they create. We use methods from behavioral decision research to understand consumer beliefs about smart meters, including in-depth mental models interviews and a follow-up survey with a sample of potential smart meter customers of a major U.S. mid-Atlantic electricity utility. In both the surveys and the interviews, most respondents reported wanting smart meters. However, these preferences were often based on erroneous beliefs regarding their purpose and function. Respondents confused smart meters with in-home displays and other enabling technologies, while expecting to realize immediate savings. They also perceived risks, including less control over their electricity usage, violations of their privacy, and increased costs. We discuss the policy implications of our results. (C) 2011 Elsevier Ltd. All rights reserved.