Using a unique set of data and exploiting a large-scale natural experiment, we estimate the effect of real-time usage information on residential electricity consumption in Northern Ireland. Starting in April 2002, the utility replaced prepayment meters with โ€œsmartโ€ meters that allow the consumer to track usage in real-time. We rely on this event, account for the endogeneity of price and plan with consumption through a plan selection correction term, and find that the provision of information is associated with a decline in electricity consumption of up to 20%. We find that the reduction is robust to different specifications, selection-bias correction methods and subsamples of the original data. At ยฃ15-17 per tonne of CO2e (2009ยฃ), the smart meter program delivers cost-effective reductions in carbon dioxide emissions.

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Suggested citation:ย Will Gans, Anna Alberini, Alberto Longo, Smart meter devices and the effect of feedback on residential electricity consumption: Evidence from a natural experiment in Northern Ireland, Energy Economics, Volume 36, March 2013, Pages 729-743, ISSN 0140-9883, http://dx.doi.org/10.1016/j.eneco.2012.11.022