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T-Systems’ report finds Government policy is failing to change the UK’s attitudes to energy consumption
June 20, 2011
The UK general public does not buy into Government claims that smart metering will save them money according to the findings of a new survey published today by TSystems and the EIU. The research reveals that more than half (54%) of residential customers fear the UK’s mandated rollout of smart meters in some 30m homes will result in higher bills despite the government forecasting a national windfall of over £7bn in energy savings.
The report highlights that only 8% of consumers would be willing to pay a premium for products or services that increase their energy efficiency, while 70% say that they either wouldn't pay anything extra at all or would only be willing to pay less than the amount they expected to save.
Business users demonstrate a similar lack of engagement. Energy efficiency slid down the corporate agenda with only one in three firms saying it was a high priority in 2011 compared with half of firms polled in 2010. This is reflected in the fact that 35% of firms have no plans to invest in energy efficiency initiatives.
According to Tim Lovejoy, Head of Energy for T-Systems in the UK, such concerns cannot be dismissed: “The UK needs to manage down energy demand but the government is running out of time to convince people to change behaviour. Both government and the energy industry should shift the focus to propositions that will deliver consumer benefits quickly and encourage consumers to take further energy saving steps. We need to offer consumers and business users compelling reasons to take action to deliver energy efficiency. Education and awareness-raising have their place, but saving money and controlling costs will be the keys to incentivising changes in behaviour.”
Some of the reports key findings include:
- Cost control is the key reason for cutting energy use. Eight out of ten consumers say cutting their bills is either the sole or major motivator. For business, the importance of cost rose to 87%, up from 71% last year. Interestingly, however, for businesses, reputation is now a far more prominent concern, up from 17% to 27%, and ahead of regulatory requirements.
- Consumers believe the UK’s rollout of smart meters will end up costing them, despite government forecasts of a £7.3bn saving. More than one-half (54%) of consumers believe that the UK’s mandated rollout of smart meters into some 30m homes will result in an increase in the price of energy. Just 15% think it will reduce prices. This is despite government projections that the rollout will result in a net benefit of some £23 per home in energy bills.
- Future efficiency gains will need to be made without adding to consumers’ current energy bills. The government’s proposed Green Deal focuses on removing financial concerns for both households and small businesses, by amortizing efficiency costs into consumers' energy bills, paid for by reduced energy use. Getting this financial mechanism right will be crucial, not least as only a handful (8%) of consumers express a willingness to pay anything extra on their energy bills in exchange for services that help to reduce energy consumption.
- While many firms are pressing a deeper engagement, change is more limited at home. To take one example, four in ten firms either have already, or plan to install on-site renewable energy – such as solar power or wind generators – this year. By contrast, just 4% of homes have done so, despite a feed-in tariff to encourage take-up.
- Energy efficiency battles for attention with bigger concerns and there are signs that interest is declining. Corporate interest in efficiency has dropped from a year ago, when the CRC Energy Efficiency Scheme was introduced. Then, one-half of firms polled noted it as a high priority; today, just three in ten say the same.
Watch a video interview with Tim Lovejoy on the findings of the T-Systems report and the next steps for government and industry.
Download the full T-Systems report.
