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A smarter grid will also fold consumers into the management of demand for power. Studies have shown that when consumers are aware of the actual price of electricity, which can fluctuate greatly during the day, they will often scale back their use during peak hours, easing strain on the grid. In the future, homeowners may be able to program smart thermostats, appliances, and electric-vehicle chargers to adapt automatically to the changing price of electricity and keep power bills below a specified budget. For now, we’re still in the first phase: spurred by government subsidies, utility companies are equipping millions of homes with smart electrical meters that enable two-way wireless communication. 

So far, utility companies are installing them mostly because it’s cheaper to read meters (and bill customers) automatically than to send meter readers from house to house. Eventually, however, more utilities will offer pricing plans that charge according to the time of day the power is used.

Consumers will have access to real-time price information from meters they can access on the Web, or from smart appliances like refrigerators that run only when electricity is cheap. Analysts predict that the market for smart appliances will grow substantially over the next few years.


We’re still a long way from a smart grid, or even from a clear idea of how much it will cost. For example, the Electric Power Research Institute estimated in 2011 that implementing a fully functional smart grid in just the U.S., including upgrades to transmission and distribution infrastructure as well as tools and applications for consumers, will cost between $338 billion and $476 billion.

The transition to the smart grid will be complicated by things other than technology. The U.S. grid, for example, is governed by a patchwork of different regulatory frameworks and is managed by more than 3,000 separate utilities, local governments, and companies. What’s more, smart meters and the smart grid are still unfamiliar concepts to many consumers. A Pike Research survey of 1,050 people in the U.S. found that nearly half described themselves as unfamiliar with smart meters. The study also found that the main concern of respondents who took an unfavorable view of smart meters was that the devices would lead to higher electricity bills.

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