IBM has released its finding from its “2011 IBM Global Utility Consumer Survey,” which has revealed that many consumers around the world do not understand the basic unit of electricity pricing and other energy concepts used by energy providers. The company also identified a list of crucial behavioral patterns that have the potential to impact how providers communicate and drive motivation amongst consumers.
More than 10,000 people across 15 countries were surveyed. The findings showed a major gap between what consumers currently know and what they need to know to reduce energy consumption and benefit from smarter energy initiatives.
Some of the finding from the survey included:
- Over 30% of people surveyed had never heard of the term “dollar per kwh” or the equivalent currency
- more than 60% are unaware of smart grids or smart meters
- knowledge is linked closely to people’s willingness to embrace change and their approval of local energy initiatives
- 61% of people with a strong knowledge of energy technology and pricing terms viewed smart meters and smart grid deployment plans positively, compared to only 43% of those with minimal knowledge
Major improvements with new energy saving technologies, new programs and incentives have been made, but in many cases the market is seeing more confusion amongst consumers than expected. The survey points to a need and an opportunity to go back to basics and educate consumers by using terms that they understand, behavioral triggers and channels they already use.
The perceptions, expectations and influences of the energy consumer have changed over the last four years. Many consumers do not have the information or the proper incentives to make better energy choices despite efforts by utilities and others in the industry to create consumer-friendly conservation tools.
IBM industry experts along with academic experts in consumer decision-making have identified several key factors related to consumer usage of electricity. These behavioral factors include:
Financial incentives are not the only factors that encourage consumers to decrease their energy consumption. Based on the consumer survey, money no longer dominates the decision-making process compared to previous years. Instead, younger consumers today are evaluating choices based on the environment while those over 55 noted the health of their national economy as a key motivator for behavioral change, sustainability, and confidence in the nation’s economic prospects when making decisions about energy use.
Presenting too many options can at times be detrimental. While in theory more options should be positive, the resulting complexity can demotivate consumers. Consumers under 25 are prone to follow the lead of others rather than sort through the options on their own. They are more likely to rely on their personal networks as a primary source for information than those 55 or older. By presenting the right balance of choices, utilities can help reduce the need for complex, time-consuming decisions that can delay a consumer’s desire to make independent choices about their energy consumption.
People rely on social proof, or the behavior of others, to determine the right ways to act in many situations. This social action trigger is behind the introduction of new programs such as consumer portals which allow consumers to see and compare their usage to those of their neighbors. This approach demonstrates that social comparisons are frequently a more powerful lever of persuasion.
By understanding the human psychology of choice and decision making, the industry can identify the greatest barriers inhibiting change, discover opportunities for improvement; adopt new methods of communication and design programs that are in line with consumer demands.
- Smart Grids – An Incremental Process
- Smart Grids – Consumer Issues
- Smart Grids – Grid IT – Where Energy Meets Comms
- Smart Grids – Key Aim – Renewables
- Smart Grids – Overview and Insights
- Smart Grids – Smart Meter Overview and Insights
- Smart Grids – Transforming the Energy Industry
- Smart Grids and the Communications Revolution
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