Managing Consumer Benefits and Costs

In some jurisdictions, the roll out of smart grid technologies has achieved less consumer engagement than would be desirable, and in particular some projects have failed to clearly communicate the benefits and costs of smart grid technologies, resulting in mixed reactions from consumers.

This is a key risk area that must be addressed for successful implementation. In this context, it is worth briefly reviewing conventional methods of cost-benefit analysis and mechanisms for cost recovery with a greater focus on the consumer side of the equation, as the underlying values and processes will inform new cost allocation methods for smart grid investments.

ISGAN brings the experience and perspective of the global Smart Grids community together in this paper in order to increase understanding of the costs and benefits of smart grids from a consumer perspective, so that they may be communicated more widely and more effectively.

This paper, authored by Annex 4: Synthesis Insights for Decision Makers, attempts to address these issues across a range of likely possible smart grid configurations and market structures, while acknowledging that many other technology configurations are possible. In light of the continuing evolution of the smart grid, cost allocation will be an ongoing subject of ISGAN research and analysis, and this white paper aims to provide a framework for this ongoing analysis.

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