5 Barriers in the Development of a Smart Grid:

May 17, 2019

1.        Electricity can be inexpensive and perhaps undersold when you consider the effects of climate change.

Relatively speaking, in many countries, the cost of electricity is considered pretty low. That isn’t to say that costs haven’t been rising, or that they don’t fluctuate, but on the whole, electricity is undersold when taking into account the impact of electricity on carbon outputs. While nobody likes to pay more, smart grids can help find efficiencies in the network, as well as encourage consumers to reduce their energy consumption.

2        Utilities have to change their business model and may not have the technical expertise

Electricity networks have, by in large, functioned the same way throughout history since their first rollouts. Utility companies, and the companies tasked with maintaining and operating electricity networks have therefore not had to adapt to a changing landscape in which innovation and smart technology is being introduced. Though there are many benefits to implementing smart grids, a lack of expertise about the systems can be a barrier for some utilities hesitant to take the plunge.

3        Utilities will potentially be selling less power, which would be unpopular with shareholders, especially as the market is based on cost

The smart grid is designed to help improve efficiencies, and lower consumption. This may not sit very well for those companies that will see less of their product being consumed. A solution to this problem could be a government mandated rollout, or financial incentives to help offset immediate declines in revenue during transition phases.

4        Resistance by consumers to smart meters based on prior trials and experiences, for example:

5        Smart meters are more expensive than conventional meters and have a shorter lifespan (15 to 20 years compared to 30 years)

There is an upfront cost for smart meters, and other smart technology. Utilities in most cases have to cover these costs as they own the infrastructure. In a way, it’s a double hit, smart meters are more expensive to begin with, and they have to be replaced sooner; resulting in higher overall costs.



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