Why smart meters are attractive for private households

• Smart meters as a fundamental part of the digital infrastructure powering the energy transition.
• Smart meters support the integration of renewable energy by better balancing generation and consumption.
• With smart meters, households can save costs, optimize energy usage and scale decentralized energy resources.

Munich, 15 February 2023 – The draft law to relaunch the digitization of the energy transition in Germay (GNDEW) is currently doing the political rounds. The law is expected to come into effect in spring, breathing new life into the smart meter rollout, and – as the name suggests – significantly advance the digitization of the energy industry. An expert from the smart energy company gridX explains how the law will benefit private individuals and potential misunderstandings consumers should avoid.

Smart meters: Foundation of the energy transition

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Smart meters are intelligent metering systems that are intended to replace the analog Ferraris electricity meter, which is still in use today. "A first attempt to modernize meters nationwide was launched in 2016, without any significant success," says Willi Appler, Team Lead Business Development and Regulatory Affairs at gridX. The GNDEW is being revived to, this time, guarantee a successful rollout. Smart meters can record electricity consumption in real time and also have the potential to show both energy consumption and feed-in.

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"Smart meters are a vital part of the digital infrastructure, often referred to as the core foundation of our future renewables-powered energy system," Appler explains. They make granular data collection possible and, along with it, the elimination of standard load profiles. This, according to the regulatory expert, is a key point of the law for a successful energy transition. If standard load profiles – sweeping assumptions based on defined customer groups’ consumption habits – were not applied, suppliers would have a real interest in shifting their customers' electricity consumption to more favorable times. Appler is certain that households would benefit financially as a result.

Financial relief and efficient energy use beckon 

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"Transparency on individual consumption will greatly encourage the rollout of solutions like dynamic tariffs or the aggregation of charge points’ flexibility," says Appler. This financial incentive is important, the expert adds, so that energy-intensive devices, such as charging stations and heat pumps, draw their power from cheap renewable electricity. This would reduce overall system costs and particularly benefit end users. On top of this, smart meters could allow electricity costs to be billed monthly, which would eliminate undesirable lump sum payments, as well as advance or back payments. It would also give users a better feel for their own electricity consumption and encourage them to, for example, identify power-guzzling devices and replace them with efficient alternatives. In this way, everyone would contribute to the energy transition, thus benefiting both themselves and the environment.

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"Last but not least, the purchase and use of rooftop photovoltaic systems, heat pumps or electric cars – ideally all combined with an intelligent energy management system – would become more attractive than ever for private households, thus further enhancing environmentally-friendliness," Appler explains. According to the gridX expert, an energy management system is an important insider tip. Such a system automates processes and uses all kinds of data, such as prices on the electricity exchanges or weather data, to optimize electricity consumption and generation. As a result, the most efficient and cost-effective electricity is used, without device owners having to take action themselves. 

Smart meter rollout will be another test of patience

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However, Appler warns against too much optimism based on the GNDEW: "The fundamental problems have not yet been solved. The global chip shortage will likely prevent the rapid implementation of smart meters in every household," says the expert. In addition, there is a lack of installers to install the meters – the key here is a shortage of skilled workers. Meter operators, whose job it is to implement the smart meter rollout, must also be held more accountable for achieving the set targets – perhaps penalties would be necessary.

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And finally, Appler sees a need for regulation to catch up. In Germany, for example, household battery systems can currently only be charged with grid power under very strict conditions. Current regulation therefore prevents households from hedging against high prices and stabilizing the electricity system. Despite his apprehension, the gridX expert remains optimistic about the future: "With the GNDEW, things are fundamentally going in the right direction in Germany, and other initiatives, such as §14a of the Energy Industry Act, are also paving the way, so that the energy transition in this country can still succeed."

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About gridX

gridX is Europe's leading smart energy company based in Aachen and Munich. With its IoT platform XENON, gridX enables manufacturer-independent monitoring and management of distributed energy resources. XENON allows partners to develop and scale energy management solutions faster than ever before. By partnering with gridX, Fastned is able to install more charging points at sites without the need for costly grid extensions, and the Viessmann Group is able to offer its customers intelligent and integrated home energy management systems.