Giving meters their smart back

Many electricity distribution companies around the world are pushing ahead with smart meter rollouts; however the question remains – how smart is this? In many cases smart meters are called dumb meters, indicating that what the industry might think is smart the users are not so convinced about.

What has been discussed for well over a year is the total lack of customer engagement in these rollouts and, while many are now scrambling to address the issue, the smart rollout machine is continuing to progress, more or less according to the original plans.

BuddeComm has been arguing since the mid-00s that smart meters are only one element – albeit an important one – in the overall smart grid concept. As is the case in every other investment, unless such huge investments are based on proper plans they can very easily take a wrong turn. It is almost unavoidable that many of these rollouts will end up becoming even more costly once companies start to see that they perhaps don't fit all that well into a smart grid concept.

If we're talking about smarts we can take a lesson from the telco industry. The telcos started to roll out their broadband services and launched their own portals, set-top boxes and other equipment, thinking that they would be able to control this market forever and simply tell the customers what they could expect to get from them.

The arrival of internet companies such as Google, Facebook, Skype, eBay and Amazon caused a major upset to this industry, and it is still being enormously disruptive. Within one year Apple changed the mobile market forever with its iPhone and played havoc with every single business model of all the mobile operators around the world.

People voted with their feet. They decided what smart really was and within four years nearly half of the users in developed economies now use smartphones.

So what makes a smartphone smart? First of all, customer control – the customer is in charge of the device and not the telco. Second, competition – users can make a selection from hundreds of phones, tablets and an increasing number of other smart devices.

How different is this from smart meters, which offer no customer control, no competition, and no choice of devices and applications that suit the user.

Competition is the only way to get the innovations needed to really provide smart services to manage and save energy.

It looks as though it is too late to call a halt to many of the smart meter rollouts across the world; yet well before the return of this investment is made most of those smart meters will need be replaced with what the customers – and not the utilities – will see as smart devices. These new devices will most likely revolve around home automation systems and not the current version of meters.

Changes will take place very quickly once this market is opened up to competition and innovation – probably in similar timeframes to those that we are now experiencing with smartphones.

Paul Budde is the managing director of BuddeComm, an independent telecommunications research and consultancy company, which includes 45 national and international researchers in 15 countries.