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The After School Special of the Smart Grid: Education

The oft-repeated mantra about what utilities need to do for their smart meter deployments is starting to sound like an after school special: customer education. Another report out this morning from Boston Consulting Group, finds that smart meter deployments are being held back by utilities not properly educating customers on the benefits of smart meters.

The majority of the 1,700 consumers surveyed in the report said that they are interested in saving money on their energy bill, want more tools to track their energy consumption, would check their power consumption on a website at least once a week, and said they would set their thermostat based on consumption and pricing info from smart meters.

But less than half of those surveyed knew what a smart meter was and only 15 percent said that they are “very aware” of what smart meters are. In addition 66 percent of those surveyed said that they would like more communication from utilities on smart meters, but less than 30 percent said they had received outreach from their utility beyond a monthly bill.

Customer engagement is crucial for the success of smart meters because, as Boston Consulting Group predicts: 20-30 percent of a utility’s customers will have to cut energy consumption by 15-20 percent to deliver the financial return on investment to cover the costs of installing the smart meters. It’s not just a touchy-feely problem.

As PG&E (s PCG) the northern California utility that was one of the first to deploy smart meters and has faced a variety of problems, has found, if you look at smart meter projects as infrastructure plays and ignore the customer, the customer will revolt. PG&E has been hit with a lawsuit and recently publicly apologized for not doing a good job of “seeing the world through the lens of the customer.”

Any utilities who read trade publications, attend industry conferences, or have faced problems with smart meter rollouts are starting to hear the education message loud and clear. The bigger issue is what to do about it. Boston Consulting Group gives one suggestion — “explore forming partnerships with companies in other industries to jointly introduce products and services,” including consumer-facing businesses like retail and technology to strengthen a utility’s brand.

That brings us back to the Internet companies Google (s GOOG) and Microsoft (s MSFT) that have years of experience maintaining customer relationships. Will the customer backlash lead utilities to embrace Microsoft and Google’s energy management tools?

For more research on smart meters check out GigaOM Pro (subscription required):

Making Smart Meters the Must-Have Gadget of the Year

Image courtesy of Mark Florence’s photostream