Studying the Impacts of Federal Funding on Residential Smart Meter Adoption and Utilities' Performance in the U.S.: A Simultaneous Equation Approach

Abstract

As a key component in smart cities, smart grid aligns the energy supply and demand, promotes more efficient use of energy, and encourages consumer awareness in energy saving. A key technological piece of a smart grid is the smart meter that allows two-way communication between consumers and utility companies. This paper uses a simultaneous equation approach to study the impacts of federal funding on smart meter adoption and utilities' performance in the U.S residential sector. Our findings suggest that the federal funding is a stimulus inducing smart meter adoption that allows for improved energy efficiency and reduced peak load demands. This study provides empirical evidence on the positive impact of public funding as an effective policy instrument for smart meter adoptions, and it offers policy implications for infrastructure modernization the U.S.