Multi-level Governance, Smart Meter Adoption, and Utilities' Energy Efficiency Savings in the U.S

TL;DR

This study empirically demonstrates that federal and state policies significantly promote smart meter adoption in the U.S., leading to improved energy efficiency, highlighting the importance of multi-level governance for effective policy integration.

Contribution

It provides new empirical evidence on how federal and state policies interact to enhance smart meter adoption and energy savings, using advanced statistical and machine learning methods.

Findings

Federal funding and state policies positively influence smart meter adoption.

Interaction effects between federal and state policies are significantly greater than individual effects.

Smart meter adoption is positively associated with energy efficiency savings.

Abstract

Smart grids enable the alignment of energy supply and demand, enhance energy efficiency, and raise consumer awareness of energy conservation. Smart meter, a vital technological component of smart grids, enables bidirectional communication between consumers and utility companies. This paper employs the two-stage least squares panel data model to examine the effects of federal funding and state legislative actions on smart meter adoption and the resulting energy efficiency savings in the residential sector of the United States. Additionally, we use machine learning techniques to select the subset of control variables that are influential for smart meter adoption and energy efficiency savings. The findings suggest that both federal financial assistance and state legislative actions have positive effects on smart meter adoption, and the interaction of federal funding and state policy interventions have a significantly greater effect on adoption as compared to the sum of the individual policy instrument alone. Furthermore, there exists a positive association between the adoption rate and energy efficiency savings. This study presents empirical evidence that underscores the significance of multi-level governance as an effective means for policy integration regarding smart meter adoptions, and it discusses the policy implications for grid modernization and environmental policies.