Using information systems to improve energy efficiency: Do smart meters make a difference?

The large-scale generation of electricity is a major contributor to increasing levels of greenhouse gas emissions, putting pressure on the industry to reduce its environmental impacts. Electricity utility companies are looking to two strategies to help make this happen: the smart grid and demand-side management. Viewing the challenge from an IS perspective, this study attempts to answer the question: do smart grid information systems and technologies make a difference in utilities’ efforts to promote energy efficiency? Drawing on organizational information processing theory and extending it by integrating the concept of information waste, two competing hypotheses are developed and tested using hierarchical regression and data from 543 U.S. electricity utilities. The model, incorporating four levels of metering devices, is found to explain a high portion of the variance in energy efficiency effects of demand-side management programs. This suggests that there are IS-enabled information processing capacities within smart meters that have a significant influence on utilities’ EDM effectiveness. However, the results also point to the potential for both positive and negative effects. Implications of these findings for practice and future research directions are discussed.