How Smart is Ontario's Smart Metering Plan?

In 2004, the Ontario government committed themselves to installing smart electricity meters in 800,000 Ontario homes by 2007 and in all homes and businesses by 2010. It is doubtful whether this target will prove to be achievable, although pilot projects are being conducted.
How are smart meters being introduced?

In support of the Ontario Government's smart meter initiative, six of the province's major urban electricity utilities are working cooperatively under the brand name powerWISE® to implement delivery of smart meters to consumers on a province-wide basis. They are each undertaking smart meter pilot projects that involve installing the meters in customer's homes in order to test the various technologies that will be required to deliver smart meter services.

The intention of the smart metering policy is to use time-of-day pricing to reduce peak demand by encouraging load shifting, as meeting peak demand during peak season frequently involves reliance on expensive electricity imports. Reducing peak demand could remove the need for new peaking plant and its associated transmission capacity, as well as dampening price volatility in the energy markets. It remains to be seen, however, how much load-shifting can be achieved under the policy as currently conceived.

Consumers were told they would be paying monthly for the new meters, but that the meters would help them to save money in the long-term as their consumption shifted to off-peak hours. However, opinions vary as to the scope for such savings. Given that the meters are likely to cost $400-$500, it is by no means clear that any savings will accrue to consumers.

The Features of Smart Meters

Smart meters will be required to:

· Measure and indicate consumption during prescribed periods
· Be adaptable to seasonal, time-of-use and critical peak pricing
· Be capable of remote reading
· Provide feedback on consumption no less than daily
· Provide bi-directional communication unless impractical

Being adaptable remotely allows the utility to alter the hours designating peak, intermediate and off-peak price bands in order to accommodate a different usage pattern on weekends and also seasonal variations in peak demand. As meters can also be read remotely, there will no longer be a need for a utility employee to visit in order to read the meter, and there will be no more estimated bills.

Critical peak pricing is a controversial element, which may or not be included in the final meter design. Essentially, a critical call is an override signal sent out by the utility instructing the meter to surcharge all consumption during time when demand is predicted to approach maximum available supply.

Critical-peak prices incorporate a dynamic component into the tariff by signaling relatively high peak-period prices to consumers only on a small number of days when market conditions are particularly dire. These days are not known until the day before they occur, at which time consumers are notified that the next day is a critical day when electricity will be more expensive than normal. Analysis of data from the first summer of the California experiment indicates that these "rifle shot" price signals can be both popular and very effective at reducing peak demand, thus dampening wholesale prices and helping to avoid the need to construct relatively inefficient peaking generators.

This feature is controversial, because it is not clear what the magnitude of the surcharge would be or how much lead-time Ontario consumers would receive that a surcharge would be in effect. In the event of a short-notice warning, given that potential power emergencies are not perfectly predictable, it is unclear how effective communication of the critical call would be in reaching a sufficient number of consumers to affect demand. Consumers could remain unaware that a critical call had been issued until the power shortage was already over, or may simply not be in a position to alter their demand immediately.

Its value as a price signal able to head off a power emergency would be limited under a delayed billing system with no access to immediate feedback. Unless critical calls were particularly frequent or the surcharge were set at a punitive rate, it is unlikely that even consumers who took no action at all would notice the effect on an amalgamated bill arriving two months later. Critical calls are therefore unlikely to differ materially from the current system of power warnings, which would suggest that the cost of enabling this capability is not justified.

Consumption feedback would be available on the internet or by telephone by 8am the following day, allowing consumers to check their consumption pattern and its effects after the fact. The present plan is for 13 months of data to be available to utility customers. It is unclear, however, how many customers - long encouraged to be passive consumers - would be willing or able to take advantage of this feature. Providing some feedback, albeit still delayed, is better than providing none, but in order to be truly effective, feedback needs to be readily available to all consumers in real-time.

Preliminary Cost Estimates

The Ontario Energy Board (OEB) has directed all Ontario electricity distributors to collect 30 cents per month from each residential consumer in 2006 to fund initial start up costs. Preliminary estimates indicate that the incremental monthly cost for a typical residential customer may be between $3 and $4 per month once full implementation is complete. The OEB expects it to cost more than $1 billion to install the meters across the province. Hydro One alone has over a million meters to install province-wide.

The Ontario Energy Ministry says the meters now cost $400 a unit, but it estimates the cost will be closer to $100 when more companies start producing them. We have examined the cost-effectiveness of smart meters combined with innovative pricing for several U.S. utilities, as well as for Victoria, Australia (where the government is contemplating a policy like Ontario's), and Singapore. Based on this work, it is likely the metering costs will exceed the benefits if the cost is anywhere near $400. Done correctly, however, the cost per customer based on a mass deployment of smart meters could be closer to $150. At that price, it is much more likely benefits will exceed costs.

The Proposed Rates

The electricity rates proposed under the smart metering initiative (which are subject to change before the program is implemented) are not as variable as one might have expected for a program intended to achieve a significant amount of load-shifting. Given that these rates cover only the commodity charge - distribution rates and other fixed charges remain constant - the difference per kWh delivered is not particularly large.

Ontario Energy Board Time-of-Use Period and Pricing
(in cents/kWh, not yet mandatory)

Weekends & Holiday .......... Off-peak ....... 3.5

Summer Weekdays (May 1 - Oct. 31)

7:00 a.m. - 11:00 a.m. .......... Mid-peak ....... 7.5
11:00 a.m. - 5:00 p.m. .......... On-peak ....... 10.5
5:00 p.m. - 10:00 p.m. .......... Mid-peak ....... 7.5
10:00 p.m. - 7:00 a.m. .......... Off-peak ....... 3.5

Winter Weekdays (Nov. 1 - Apr. 30)

7:00 a.m. - 11:00 a.m. .......... On-peak ....... 10.5
11:00 a.m. - 5:00 p.m. .......... Mid-peak ....... 7.5
5:00 p.m. - 8:00 p.m. .......... On-peak ....... 10.5
8:00 p.m. - 10:00 p.m. .......... Mid-peak ....... 7.5
10:00 p.m. - 7:00 a.m. .......... Off-peak ....... 3.5

The Impact of Price Incentives

There is already a growing number of consumers in Ontario who are shifting their load for altruistic reasons, particularly at times when the Independent Electricity System Operator (IESO) declares a power warning. They run their dishwashers after 10pm, turn down their air conditioners, do laundry on weekends, put their water heater on a timer or make other minor modifications at perhaps a small cost in terms of convenience. So far, due to the willingness of the public to conserve at times of peak demand when asked to do so, it has been possible to avoid declaring a power emergency when the system has been under severe strain. The IESO is concerned, however, that if power warnings should become more common - or even routine - in the future, a form of warning-fatigue may set in and the public response may diminish.

Smart metering in conjunction with time-of-day pricing is meant to bolster the altruistic impulse to conserve power when supply is tight, theoretically to a degree great enough to extend load-shifting behaviour to daily peak demand periods. Unfortunately for the policy makers, prices are not the prime motivation for those who load-shift now, and the difference between the proposed on and off peak rates is probably far too small to motivate many additional consumers to do the same.

On the other hand, if punitive peak rates sufficient to provide a genuine financial incentive to load-shift were mandated, it would have a highly disproportionate effect on those unable to alter their demand profile. Farmers, for instance, would be heavily impacted, as would the poorest consumers - generally those with the least flexible demand. As far as these consumers are concerned, price increases, whether based on time-of-day pricing or not, are a blunt instrument.

The poor often lack the information, resources and control over their own circumstances to change their demand, much of which is for non-discretionary uses such as heating. Half of Ontario homes which are electrically heated are occupied by those in the bottom income quintile, while very few in the upper half of the income scale heat electrically. If those electrically heated homes were also badly insulated, as the homes of poorer individuals often are, then the impact on the many at the bottom of the pyramid could be crushing.

It appears that the need to keep the impact manageable for those unable to load-shift will require maintaining a price differential which is too low to deliver much load-shifting by other consumers, and also too low to result in any savings for most consumers once the monthly charge for the meter has been taken into account. Spending a billion dollars up front, followed by an estimated $50 million per year in operating costs, in order to achieve a relatively small shift from coal-fired peaking plant to baseload nuclear and an estimated 5% overall reduction in residential consumption is probably not the best use of those funds.

A Smarter Alternative

A smarter metering alternative already exists and has been operating in one Ontario town since 1989. That will be the topic for Part II.

The problem is they have added all these extra features to make the units "smart".  If instead they designed it as a "black-box recording device" that still had to be visited by a person to download the data it would be a trivial expense.

How much money are the utilities going to save by not having someone come to read the meter?  The remote communication feature is probably the main cost factor driving the $400 price tag and is purely a cost saving feature for the utility. It has nothing to do with peak shaving.

In terms of hitting the poor and farmers particularly hard, they can always buy into a plan that gives them a fixed price.  The smart meter gives them the option to have a variable price it doesn't make it a requirement. In Ontario there are already multiple providers of electricity that will give you the option of price certainty.

For all of the "smart" features, the manufacturer's brochure doesn't spend any time on interaction with loads.  WiFi and Bluetooth interfaces, which interface easily with much consumer gear, are conspicuous... by their absence.

If consumers are going to be hit with higher rates at crisis times, they need to have access to that information in real time.  Preferably, their appliances should be able to access and act on that data without human intervention.  I see no features in this meter to allow this.

But most consumer gear that sucks down power isn't WiFi- or Bluetooth-equipped, and making it so would add another $20 or more per unit.  Antennas, precision timebase, fast microcontrollers, FCC/DOC certification,...  Add the hassle and problems of configuring the meter and controlled loads to talk to one another.  Then consider apartment buildings or the like where the meter is perhaps at the far end of the building from the loads, and these capabilities would likely go unused.

Ideally, you'd want a low-bandwidth channel over the electrical line itself.  How about X10? A naïve installation could plug existing sheddable loads into appliance modules set to a well-known house/station code, and the meter would send the commands to turn those loads on and off at the appropriate times.  In an intelligent installation, the meter might merely broadcast the information received from the utility and some other controller, perhaps even a home computer, would schedule and coordinate power use among smart appliances.

Over the coming years, Pacific Gas and Electric is going to replace all its meters with remote read ones using the power lines.  I have no idea what technology they are going to use or who will manufacture them.
Small point, but with the update to the RPP earlier this month, effective November 1 the TOU rates were adjusted slightly downwards to:

On Peak: 9.7
Mid Peak: 7.1
Off Peak: 3.4

It's totally smart. The cost of IT is negligible compared to the cost of energy. One hope we have is being much much smarter about how we use energy. The grid is a monopolistic controlled dumb animal. It's amazing how almost unanimously people in the industry fight the idea that more information can help the process become more efficient. We actually haven't even begun to think of ways we can better generate, distribute, and consume electricity if we had more information, yet the utilities and "consumer" advocates bitch and moan about how more information is too expensive. I even know people in the solar industry, who at this point will benefit most, who oppose it. That we have a monopoly system that wants to charge ridiculous prices for this information technology is a different matter and that's what people should be fighting.

Everyone needs to create and learn news way of using energy. Information is infinite, fossil fuels aren't.

I am no advocate of a monolithic electricity system, nor of ill-informed passive consumption. I am not saying that more information is too expensive. In fact, I don't think this system gives consumers enough information and it doesn't give it to them when it would most benefit them from the point of view of making consumption decisions. The alternative will be discussed in Part II.
Except you're using utility numbers to justify your conclusions, that's the problem. The grid is such an information free zone as to be criminal, everyone talks blind about electricity half the time, as they do about oil, how do you make decisions on things with such garbage information? You made a statement in a previous post about solar TOU meters costing 3 grand, at least you brought these down to 3 to 5 hundred. Think about it, you can buy a full scale stokin desk top for 3 hundred bucks today. For this, all you need is a digital clock, counter, and hook to phone line, the cost of this is in the tens of dollars not hundreds, thousands is ludicrous. This isn't just the utilities fault, all the IT folks are trying to profit as much as they can too, and who better to fleece than the utilities.

I remember the Y2k idiocy and the utilities were the first industry to claim compliance, why? there were no computers in the system. The guy running the grid at PGE in CA told me in '97 they would have problems if the, "Phone system went out." - hah!

The system needs more information to evolve. Consumers, farmers, everyone are going to be paying more for energy, so we have to figure out how to use it better. If you have an egalitarian/democratic ethic, we have to figure out how to do that most equitably, but consumer groups stick to their failed policies of promoting low cost as their only justification. If you care about consumers or farmers think about changing the system, and the first step to that is more information, period. I'm all open to debate on the best way to do that, but I'm not starting from utility bullshit.

Our analyses for governments and utilities in Australia, New Zealand, Singapore, the United States and elsewhere indicate that if the metering cost per customer can be brought down to $150 or less, then the benefits of deploying smart meters on a mass scale have a reasonable chance of exceeding the costs.

CD Howe Institute - Preventing Electrical Shocks

I wouldn't say that a price differential of almost 3:1 is "small".  On the other hand, here in Vermont we pay 12 cents (US) per KWH (much of it coming from Hydro Quebec), so all those prices look "small" to me...

The utilities' costs vary with demand, and if you don't pass that variability on to the individual customers, but rather have a fixed per-KWH rate, then in effect the customers that are careful not to use much during peak times are subsidizing those who leave their air conditioners on on summer afternoons or choose to heat with resistive electric heat during cold snaps.  Making the variable costs fair and transparent thus seems like a good idea to me.

The issue of how will low-income people cope is a separate one.  (The same arguments arise when talking about gasoline taxes.)  As energy prices increase in the future, they will be hit hard in any case.  If TPTB cared about the poor then they should invest more money in programs that help them insulate and convert away from electric heat.  Landlords should be required to make rental housing satisfy certain energy efficiency standards, with money being made available to the landlords in loans to help them finance the needed changes.  Even if those loan payments are then passed on to the renters in higher rents, the renters will still save money in the long run due to lower utility bills.

Looking forward to Part II

When you looked at the delivered cost, the price difference looks much less significant. Only the commodity charge varies by time of use, not the distribution charge.

I agree that the problem of the less well off is, or should be, a separate issue. Electricity billing and social welfare have been intertwined for a long time, which has led to price signals becoming muted and confused. I was merely pointing out that, within the confines of the current system, political action represents a balance between conflicting factors. It would be political suicide to raise peak rates high enough to provide a real financial incentive to load-shift, hence the balancing act that will please no one.

The solution IMO is to sharpen price signals through real-time feedback and billing innovations which eliminate the effects of amalgamation and delay. There are already tried and tested systems in place which do this, and they work because they are smart in a human sense, rather than only being smart in a technological sense. In combination with time-of-use pricing, these methods could be used to turn a blunt instrument into a precision instrument. Both the problems of the need for social considerations and the need for load-shifting can be addressed in such a way that they do not poltically confound one another. For details, see Part II.

Why don't they stagger the distribution charge by time too?  That doesn't make any sense to me.  Sure, the distribution cost may be the same at all times, but then again the grid wouldn't need to be able to support as much load if people were spreading the loads around to off peak hours.  It seems to me an easy solution would be to adjust distribution costs to be an equal ratio to the difference in commodity prices.  
The commodity charge is set provincially, whereas the distribution charge varies by utility. It would be politically challenging to institute that level of reform, and Ontario politicians of various political stripes have not proven themselves to be adept at handling challenges.

The last party at the helm declared themselves free marketeers and set up a pool pricing system for electricity. Pool prices rose quickly (to about 8 cents/kWh), whereupon the government promptly slapped a cap on rates at a level so low that consumption was being actively subsidized - and this after only a four months trial period for floating prices (when it had been obvious prices would rise as supply was tight).

The present administration raised the rate cap (because the subsidy was costing the province a fortune) and introduced a tiered payment system. They declared that the bad old days of Ontario Hydro (which had accumulated some $40 billion in debt) were over, then promptly set up an even more centralized bureaucracy. If its Standard Offer Contract is anything to go by, it seems to be determined to micromanage everything in such as way as to impose completely unnecessary cost burdens on those trying to introduce alternative generation, particularly at small-scale. The metering program also imposes unnecessary costs, largely due to the political requirement for two-way communcation and critical call capability.

I live in the UK.

We already have a form of demand management.  We have time stepped cost for our electricity.

Cheap (5.4p/KWh) from midnight-5am, 1pm-4pm, 8pm-10p

Expensive (9.5p/KWh) from 5am-1pm, 4pm-8pm, 10pm-midnight

Basically its expensive to encourage conservation at peak times and then cheap off peak to encourage consumption.

We don't have gas or oil heating, so we heat using electricity.

Needless to say the hot water heating + space heating are largely run off peak.

Oh, and the meter was free to us.

I don't see the public relations value of forcing people to pay $500 for a "smart" meter.  Ours is a dumb meter and we get along just fine.

besides won't $500 pay for 6 months worth of electricity for many folk?


"besides won't $500 pay for 6 months worth of electricity for many folk?"

I don't know about Canada; I live in the U.S, in GA, in a fairly small house for the area (1200 sq. ft.). Our annual electric bill runs about $600, but we heat with nat. gas and pellet fuel, and the hot water tank and stove/oven run on nat. gas; the annual amount we spend for nat. gas plus pellet fuel has been about $950 the last two years.  In other words, our total household fuel bill is closer to $1500 annually than to $1000.

I have friends whose furnaces and water tanks are also natural gas appliances and who routinely spend considerably more than $100 per month on electric alone (they live in bigger houses and are less fanatical than I am about turning things off). If we all had "all-electric" homes, we would spend WAY more than $500 in 6 months. Of course, that might be incentive to find ways to cut back!

-Amy W.

I would imagine in Georgia the key is what is your electricity for air conditioning bill? ie for most people, air con is the big consumer rather than heating?

Have you looked into air source heat pumps?

given your bills are small it is probably not worth the capital expenditure unless you are due a revamp already.

smart infrastructure
"Smart Meters" are a baby step in the right direction of intelligent devices that can adjust demand in real-time to substantially reduce energy peak demand.

Imagine a "smart electric panel" that knew the temperature in your freezer and coudl stage the compressor motors in sync with other fridges, freezers and pool pumps. This could easily reduce electric generation demand by 10-15%.

When there are rolling black-outs to dampen excessive demand whole neighborhoods are cut off. Imagine if the "smart panel" could distinguish between critical and non-critical loads (say a dialysis machine vs a hot tub).

Imagine, with distributed generation resources in a given geography, small-generators (owners of PV, standby power equipment, etc) could be compensated for their emergency ready power that would be distributed to customers paying a premium to light up certain circuits in their smart panels.

The opportunity to build intelligence at the edge via smart devices is just now emerging as a significant way to reduce capital and operating expenses, increase competition, reliability and security.

I agree with you Raymond - this is the way forward. One thing I read somewhere on TOD was smart meters that have the ability to switch off the element of the water heater for as many houses as necessary if network demand became critical. This will in most cases not even be noticed by customers since a lot of energy is stored up in the tank. Don't think the smart meters propsed can even do this simple switch though..

Having lived in the UK for many years, especially as a poor student, I still find it amazing here in Canada that the hot water tank is "on" all day and all night, despite only needing it mornings and evenings. Unheard of over there!

In the UK they have these horrible instant electric showers that dribble on you as you stand in a freezing bathroom (due to dodgy insulation mostly), but at least you only use 5KW of electricity for 5-10 minutes, depending on how long you can put up with it :-)


Gary M.

Something like this will probably become universal so might as well sort out the bugs now. It could smooth the way for vehicle-to-grid should that ever go ahead. I agree real time monitoring is essential including a Java graph of apparent total grid demand. Perhaps the householder could override some default settings; I know some people who swear that turning off a resistive element water heater for 18 hours a day drastically cuts their bill, albeit giving lukewarm water.  It might cost the utility a few dollars a month to do this but I bet they will charge plenty..they're in the revenue business not saving the planet.
I've been playing with my water heater and found that my consumption drops considerably when I turn it off during the day, or even for two days.  I can heat a tank one night and leave the meter off the next day, and the tank is still warm enough for a second shower the next morning.  Consumption appears to drop about 2 kWh/day when I do this.

It shows just how inefficient the water heater is!

And your pipes.

When in doubt, insulate everything.  Then do it again with a different material.

If I owned the pipes, I would.  However, I cannot recoup such an investment and the landlord derives no benefit from it.

This is a problem that needs to be solved with legislation.

There are a couple of papers:

Akerlof, George 'The Market for Lemons'

which summarised this problem brilliantly.

In the Akerlof case, we are buying and selling used cars.  You have a good used car, but I know most used cars are of low quality.  So I make you an offer which is too low for you to accept.

We wind up not doing a deal.  Because you have information I don't have, I can't/won't take the risk.  Conversely, you can't make me any more sure than I already am.

Breakdowns in negotiations (see Palestine v. Israel) happen all the time because of this.  In tightly knit communities, trust can overcome them.

In your case, the problem is not imperfect information, per se, but the structure of the problem is similar.  Ideally the landlord would insulate the pipes, and all future tenants would pay him some of the gain in higher rent.

But whilst its easy to show that a bigger flat rents for more, it's a lot harder to ensure that given 2 identical flats, the one with the lower utility bill rents for less.  

A simpler scheme might be to have the utility measure the idling losses, and make the landlord pay them.  This rolls them into the rent and levels the playing field for lessors.
I put a manual switch (with a pilot light so we know its on or off) on our HWH at least 15 years ago.  We turn it on and off based upon a thermometer on the line out.  It has saved a lot of electricity over the years.

Incidentally, this is a pretty easy thing to so since they make regular 30amp, 220volt wall swtiches and most heaters are 30amp.

Nice scam. At that cost they probably could have installed heatpumps and solar heating systems for free in all households which wanted it to cover the peak load...


We've had a TOU meter for a long time in CA.  Frankly, if we didn't have a PV system that we run during peak periods, I'd forget the whole thing.

Here's the tariff schedule for summer in cents per kW (numbers rounded):

Summer peak usage(noon to 6PM)
baseline - 0.294
101-130% of Baseline - 0.294
131-200% - 0.384
201-300% - 0.467

Summer off peak usage (all other times including weekends)
baseline - 0.087
101-140% - 0.087
131-200% - 0.177
201-300% - 0.26

In the summer, our major power usage is for irrigation of our garden and orchard.  During weekdays, all water is heated on the PV system (which also has a solar preheating system).  We "average" between 26-29kW per day - on weekends I may use 200-400kW irrigating.

Given the complexity of the tariff schedule which is less complex than the proposed Ontario one, I see the whole thing as a can of worms there.

BTW, Pacific Gas and Electric (PG&E) has kept reducing  the baseline amounts as the years have passed.  It isn't as good a deal as it once was.

On thinking about it I see that smart grids and V2G will never happen if utilities  keep skimming off the top. As always Big Guys don't lose. Participants will need guaranteed savings.

I'm drip watering a half acre garden with a 12 volt boat pump in a pond. Power comes from PV panel on top a shed with a lead-acid battery and voltage regulator inside the shed. Works great. The house is grid tied PV. Whenever they get those big cheap megabatteries and much cheaper PV we should all tell the power company to get lost.

If you already have a pond, why don't you use pumped hydro as a "big cheap megabattery"?
At this scale output:capital cost is inadequate. See also
I saw no mention on that page of micro hydro or pumped hydro storage.
Also, I disagree with his conclusion. He cites many great examples of exceedingly poorly designed systems and then concludes that all micro systems won't work. This does not follow.
In fact, if Monbiot were correct, off-grid living would be impossible. This is simply not the case. Many off-gridders would explain to you that they live quite comfortably off of the grid.

I agree however that pumped storage might not be quite affordable on the small scale, but it should be considered.

We were given an option of a "time of use" meter when we moved to this rural area served by a rural electric coop in 1990 and chose to have it.  We were able to shift lots of use, such as running a dehumidifier in the basement, ironing, etc. to off hours.  Don't know if it actually saved anything, but we thought it was a great idea.  Last year the project was discontinued and we were given a regular meter and now electricity costs the same 24 hours a day.  Guess it wasn't economical for the company to bill at 2 rates.
Stoneleigh, this is another excellent post. It's incredibly informative and well written. My hat's off to you (not that that means much).

One question though. I always assumed "smart meters" are capable of running backwards, i.e. that they belong to distributed generation infrastructure. But that's not an item in the feature list in your article. Is distributed generation even a topic in Canada?

The smart meter proposals I've seen do not include the capacity to net meter, although a combined net meter/smart meter must be planned for those who currently net meter. I expect it to be an expensive option that would have to be covered by the homeowner. Net metering currently requires a special meter in the $1000 range, but those meters do not posess smart metering capabilities and will therefore be subject to mandatory replacement in the relatively near future (if government timelines for smart metering are to be believed). I wouldn't therefore recommend that anyone purchase a net metering system until a combined meter is available.

One of my primary complaints with the way the current government has managed the electricity system is its almost complete lack of joined-up thinking. My own view is that they have no desire to encourage distributed generation at all, especially at small-scale. It is quite clear to me that Standard Offer Contracts (SOCs) are not viable for micro-generation, and quite possibly not for small generation either. Net metering is possible, but involves paying for expensive metering equipment that will only have to be replaced long before the end of its life. The list of unneccessary barriers to entry, especially for SOCs, is long indeed. If I were trying to devise a policy framework intended to supress small-scale distributed generation (without sacrificing the 'green vote'), I would be hard-pressed to do better than what the present government has come up with.

Well, then, I guess the ecological thing to do is to forgo net metering but install a smaller wind & solar system with some storage and an inverter that will blend generated electricity into your consumption in real time. That way you can cut your power draw with little inconvenience, especially if you shift your loads to when your generators are at max. Your power bills are bound to fall and you will contribute to grid stability. Your initial investment probably won't pay for itself - you will thus, in effect, sponsor the utility (which you would with net metering as well).
That's what I did. My system runs my essential loads all the time - well pump, sump pump, freezer, fridge, circulating pumps for the outdoor wood furnace and the solar thermal system etc. My batteries would run those loads for several days if necessary. I can charge the batteries with the PV system, with a generator or from the mains. I also have a generator panel set up so that the next most important loads can be run directly by the generator. Everything else I could do without if I had to.

When I bought my farm, it used 130kWh/day in the winter (due to electric heating in the house and poor insulation). Six years later I can run it on about 10 kWh/day, which means translates into a bill of about $100 every two months. I wasn't thinking in terms of pay-back periods when I put in my system - I was thinking about being as self-sufficient as possible. I am extremely concerned about the state of the grid and don't want to have to rely on it.

The main feature that seems to be lacking from that "smart meter" spec is the ability to actually DO something with the tarriff change information.

e.g. I want my water heating to turn on when it's cheap, off otherwise. I should be able to program th meter to do this, and other stuff. If I have to buy extra modules for my switchboard, that's a ... turn-off.

Power companies need to provide internet-based feedback and control to consumers to make this stuff work. Transparency is important, the consumer should have all the info the power company gets.

Pricing rules need to be simple and transparent. If it gets too complicated it'll be too much trouble for most people.