Improving Energy Consumption Feedback (I)
Finding potential techniques and benefits of improving feedback to domestic consumers on energy consumption
Project duration: January 2003 to July 2003
Informed consumers are a prerequisite for the efficient operation of a competitive market. Yet in the UK electricity and gas market, domestic metering and billing systems routinely provide inaccessible, infrequent and/or estimated or inaccurate information about consumption.
This study examined the potential techniques and benefits of improving feedback to domestic consumers on their energy consumption, with the objective of answering three questions:
- What sort of information would help inform domestic consumers more about their energy use?
- How is such information best presented to consumers (of various types) to maximise opportunities for improved understanding and/or behavioural change?
- What impact would such presentation have on consumers’ energy use and choices in the energy market?
The scope of this desk-based study provided for a literature search and an extensive ‘contact trawl’ to identify and assess relevant previous research on domestic consumer understanding and responses to existing and new approaches to metering, billing and/or financial information for energy and other services.
Web searches were used to find energy utilities around the world which are providing more extensive energy consumption information on their bills. Information was sought from the utilities and, where known, the relevant regulator, to ascertain the basis for their approach and the nature of any monitoring being undertaken. Contact was also made with key individuals in companies and organisations which were thought to be actively pursuing the application of new advanced or ‘smart’ metering technologies in the energy sector.
These findings were then fed into extensive discussions within the research team, which combined expertise in consumer research, education and energy awareness training, and direct consumer advice provision. This enabled the development of a simple framework for understanding the consumer’s perspective and the issues which may affect their engagement with, interpretation of, and response to energy consumption information.
The study concluded that there is a wide range of techniques and technologies available to improve consumer feedback on energy consumption — from shorter billing cycles and more informative on-bill presentation of consumption data to ‘smart’ meters displaying energy use and identifying load-reducing opportunities.
A review of studies of these techniques suggests a potential to deliver sustained energy savings of 5—10% for many customers through the use of even a limited number of simple feedback improvements. The analysis also indicated that:
- consumer feedback is most effective when it is immediate, prominent, accessible and specific to the consumer
- consumers seem to be able to respond appropriately to historical comparison information on their bills and in-the-home meter displays
- the manner of presentation of the feedback information to consumers is a core consideration which has been much overlooked in the literature
- the available evidence suggests (not surprisingly) that engaging consumers in the design of feedback information leads to more effective designs and increases the likelihood of creating presentations which meet the full range of consumer preferences for how to receive and assimilate information and data
- there is no evidence to suggest that advanced meters are necessary to improve feedback (though they could undoubtedly help if this aspect is a feature of their introduction). Well designed on-bill consumption feedback can be just as effective and should prove relatively cheap and quick to introduce
- prepayment meter customers (who would not benefit from improved billing feedback) would benefit from improved meter displays giving them options to review consumption against historical data
- enhanced feedback programmes have been most successful where supported by energy advice and other educational activities by suppliers, government or other agencies.
The study report, published in July 2003, proposed a next phase of research (followed by controlled field trials), involving focus groups to test and improve feedback presentation and to test consumer understanding and the motivational impact of different options. It also highlighted a number of issues for energy suppliers associated with consumption data quality, accuracy and availability for both historical comparisons and normative comparison groups.
CSE was commissioned by Ofgem to undertake this follow-up research, details of which can be found here