CONSUMER ENERGY SENTIMENTS REPORT · 2019-05-29 · choosing the correct green/ renewable energy...

1CONSUMER ENERGY SENTIMENTS REPORT Copyright © 2015 The Nielsen Company

C O N S U M E R E N E R G Y S E N T I M E N T S R E P O R T

2 CONSUMER ENERGY SENTIMENTS REPORT

INTRODUCTIONThe energy industry is changing. Continued pressures from regulatory

bodies, the government and the consumer are pushing utilities to re-

evaluate their current business models. These pressures can take many

forms: aging infrastructure, emission limitations from the EPA’s Clean

Power Plan, the shift in revenues for energy sales, and consumer demand

(coupled with tax incentives) for cleaner technologies at lower costs, to

name a few. While it’s a tumultuous time to be an energy utility, it’s also

a time to thrive in the exploration of new opportunities. Nielsen’s Energy

Behavior Track study is a snapshot of how consumers use energy and

efficiency programs within their households, as well as how they perceive

energy providers and green/renewable technology.


SMART THERMOSTATS“Smart thermostats” have come onto the scene in recent years with

substantial publicity, yet only a few providers exist in the space. Most

smart thermostats utilize a few emerging technologies/concepts to

draw early adopters. First, the ability for a homeowner to access,

monitor, and control their in-home temperature remotely or via a

mobile app draws on the growing popularity of the Internet of Things

(IoT) movement. Second, smart thermostats can “learn” the heating

and cooling patterns within a home, and can adjust the temperature

accordingly when a homeowner is home and away. This is clearly an

application of machine learning.

Although only a single example, Google has high expectations for

thermostat technology as it recently purchased Nest Labs for $3.2

billion, which includes the company’s learning thermostat and Nest

Protect: Smoke + Carbon MonoxideTM detector thermostat. Was this a

lucrative purchase for Google? While the market is still in its nascent

stages of development, the recent Nielsen Energy Behavior Track study

shows that consumers might not be ready to whole-heartedly move

into the IoT movement (at least in terms of thermostats), with only 3%

marketshare as seen in the chart below.

While smart thermostats promise to help consumers become more

informed and in control of their energy usage, most are still using

manual and programmable devices. This isn’t necessarily a bad thing;

consumers still have the ability to control their energy expenditure, but

simply need to put forth the effort to adjust their home temperatures

themselves.

This sparks an interesting conversation about consumers and their

energy habits. It probably isn’t news that the push towards greener/

renewable energy, sustainable energy practices, and reducing mankind’s

“carbon footprint” are topics of extreme interest globally by government

bodies and the scientific community alike. Although energy utilities

are beginning to “buy-in” to a business model focused more on

conservation, efficiency, and performance-based compensation (rather

than the traditional fee-for-electricity model), the end consumer will

ultimately need to contribute to the cause. Are they now?

TYPE OF THERMOSTAT OWNED

MANUAL

PROGRAMMABLE

DONT HAVE THERMOSTAT

SMART

DONT KNOW

Source: Nielsen Energy Behavior Track, 2014, n=31,353

47%

41%

7%3%

2%


HOUSEHOLD HEATING/COOLING EFFICIENCY

Source: Nielsen Energy Behavior Track, 2014, n = 29,496 and 29,755 (heating/cooling)

HEATING/COOLING EFFICIENCY AND ENERGY PROGRAMSA major source of consumer household energy consumption comes from

heating and cooling systems. Both types of systems offer high-efficiency

products such as those qualified as Energy Star Compliant. Additionally,

many manufacturer and utility programs incentivize the use of these low

consumption alternatives through government tax credits. The onus of

taking advantage of these offerings then lies with the consumer which

begs the question of whether they are capitalizing on the opportunities.

Nielsen’s Energy Behavior Track study captures consumers’ household

heating and cooling system efficiencies. While the systems can range

from basic central heating/cooling to less-used options like active solar

heating, the majority of respondents with heating and/or cooling in their

homes across all systems indicated having a standard efficiency system

(~44.5% for each type).

HEATING SYSTEM COOLING SYSTEM

DON’T KNOW

HIGH

NORMAL

25%27%

32%29%

44%45%


PROTECTIVE WARRANTIES UTILIZED

Source: Nielsen Energy Behavior Track, 2014, n = 31,993

However, interestingly there is a nearly even split between respondents

indicating owning a high efficiency system and those that say they “don’t

know” what kind of system they have. Could some of these respondents

have high efficiency systems and just not be aware of it? Possibly. The

key takeaway is that according to this study (which is sampled to be

nationally representative across demographic measures) approximately

one quarter of the population is unclear about the efficiency of their

heating and/or cooling system.

As stated earlier, in order to bring to fruition the new business models

utilities are pursuing, both the utility and consumer will need to

participate in the evolution. With a quarter of the population indicating

they “don’t know” the efficiency level of their system, utilities could find

it prudent to reach out and educate their customers.

For the most part, utilities are making the attempt to engage their

consumer base. Many offer programs and services to better aid their

customers’ energy-conservation needs as well as guide them towards

keeping their homes efficient. Several of these programs are offered

free-of-charge; all the customer has to do is sign up. So while purchasing

a new HVAC system to gain the benefit of high-efficiency comes at a

monetary cost to the consumer, a program offered by a utility may offset

the cost of purchase. This leads us to a another question. Are consumers

using the energy programs and services offered by their local utilities?

HEATING, VENTILATION, AIR CONDITIONING (HVAC)

POWER SURGE (I.E. COVERS DAMAGE CAUSED BY POWER SURGES)

MAJOR HOUSEHOLD APPLIANCE

WATER HEATER

HOME ELECTRICAL WIRING

NONE OF THE ABOVE 78%

4%

6%

8%

9%

12%


To help consumers extend the life and function of their appliances,

utilities may offer protective warranties to cover repairs and system

replacement. Proper maintenance of these systems can greatly reduce

energy expenditures—home heating alone is estimated to account

for 45% of the average household’s energy bill1. However, according

to the Nielsen Energy Behavior Track, consumers are fairly lax when it

comes to taking advantage of these types of programs. Nearly four in

five (78%) indicated they did not use any protective warranty program

offered by their utility. While this does not mean they haven’t used a

manufacturer’s program, it does show that consumers are not turning to

their utility providers for such services.

Protective warranties aren’t the only thing that consumers appear to

be turning their noses up at. They’re also under-utilizing programs/

services such as rebates for purchasing energy-efficient appliances/

equipment (HVAC) and weatherization services. In fact, nearly four in

five consumers (79%) indicated not using any of these through their

utility provider.

1Energy Saver (www.energy.gov/energysaver), Weatherization Assistance Program Technical Assistance Center (waptac.org), and U.S. Energy Information Administration (www.eia.gov).


ADDITIONAL UTILITY SERVICES UTILIZED

Sources: Nielsen Energy Behavior Track, 2014, n = 31,993

12%

9%

8%

7%

6%

5%

4%

3%

3%

3%

3%

3%

3%

2%

2%

1%

79%

HEATING, VENTILATION, AIR CONDITIONING (HVAC)

MAJOR HOUSEHOLD APPLIANCE RECYCLING PROGRAM

HVAC INSPECTION & MAINTENANCE

MAJOR HOUSEHOLD APPLIANCE

WATER HEATER

APPLIANCE REBATE

HOME ELECTRICAL WIRING

DEMAND RESPONSE

EQUIPMENT REBATE

GREEN ENERGY

ONLINE ENERGY AUDIT

WHOLE-HOUSE AUDIT

DUCT TEST AND REPAIR SERVICE

WEATHERIZATION SERVICE

CARBON OFFSET

NONE OF THE ABOVE

POWER SURGE (I.E. COVERS DAMAGE CAUSED BY POWER SURGES)


There are several reasons why consumers aren’t using these services.

For example, some consumers may be receiving them elsewhere. It’s

also possible that their energy provider might not offer them in the first

place, or they might not need them due to their specific circumstances.

There’s also a chance that they were unaware of them. Could energy

providers not be doing enough to promote their additional services (a

major area of concern if they plan to evolve their business models to be

service-oriented)?

SAVING ENERGY THROUGH RENEWABLE ENERGY AND CONSERVATIONKnowledge about renewable energy (and energy conservation in

general) is becoming more main stream. Both consumers and energy

providers have shown a greater interest in these technologies and federal

regulators are slowly nudging the industry in that direction. Photo-voltaic

solar installations, one type of renewable energy source, are beginning to

proliferate across the country in residential and commercial applications.

While ultimately both the consumer and energy provider will benefit

from decentralized power delivery into a distributed generation system,

today’s energy grid is incapable of handling a two-way energy flow at

scale. This is an issue that can only be remedied by investment from

energy suppliers and regulating/government bodies themselves. On

the consumer side, the issue becomes one of participation. Essentially,

more and more consumers will need to adopt solar power systems until

a critical mass is reached, at which point the need for grid modernization

will be exacerbated.


TOP THREE BARRIERS TO SOLAR ADOPTION

I DO NOT OWN THE PROPERTY WHERE I LIVE AND COULD NOT MAKE THE DECISION TO

INSTALL A SYSTEM

NONE OF THE ABOVE

ENSURING THE SYSTEM’S APPEARANCEDOES NOT VISUALLY AFFECT MY PROPERTY

CHOOSING THE CORRECT GREEN/RENEWABLE ENERGY SOURCE

RECEIVING RELIABLE INFORMATION ON SYSTEM PROS/CONS

MAKING SURE THE SYSTEM’S TECHNOLOGY DOES NOT BECOME OUT-OF-DATE QUICKLY

FINDING A PLACE TO INSTALL THE SYSTEM ON MY PROPERTY

FINDING A TRUSTED CONTRACTOR TO PURCHASE/INSTALL SYSTEM FROM

RECEIVING AN ACCEPTABLE RETURN-ON-INVESTMENT

COST OF PURCHASE/INSTALLATION 6%10%43%

8%

3%

5%

2%

3%

2%

2%

5%

4% 6%

6%

25%

5% 8%

6%

6% 11%

8% 7%

10% 12%

20% 11%

1ST CHOICE 2ND CHOICE 3RD CHOICE

Source: Nielsen Energy Behavior Track, 2014, n = 31,993


60% indicate...

...replacing light bulbs with compact

fluorescent light (CFL) bulbs

Yet, residential solar adoption has its barriers. From the consumer’s

perspective, the reason is primarily monetary, and begs the question,

“how much does it cost to purchase a system? and “Will I receive

an acceptable return on investment?” Although programs and tax

incentives exist to enable the growth of residential and commercial solar,

consumers’ sentiments may reflect a lack of awareness similar to their

lack of awareness about the additional services that energy providers

offer.

Aside from renewable technology, energy conservation is a behavior

that consumers can engage in on many levels and, typically, more easily.

Many home and lifestyle improvements can aid in reducing consumption

varying from the simple and affordable to the complex and expensive.

When asked which types of improvements they favored, respondents

tended to indicate the former–simpler changes, easier to implement.

74% indicate...

…turning off lights when not in use

50% indicate...

…starting to turn off/unplugged

electronics when not in use

46% indicate...

…starting to set thermostat colder in

winter and/or warmer in summer

CURRENT ENERGY SAVING BEHAVIORS IN-HOME


CONCLUSION

The energy industry is moving forward and adjusting to incorporate new

technologies to improve efficiency for themselves and their customers.

Smart thermostats are just one example of how tech and energy

are blending to take advantage of ubiquitous Internet connectivity

and complex computational intelligence. Yet industry advances (be

it involvement in efficiency programs, participation in conservation

behaviors, or adoption of renewable energy) are contingent on the

symbiotic relationship between the utility and consumer. As our study

shows, there is clearly room for improved engagement on all sides.

CURRENT ENERGY SAVING BEHAVIORS IN-HOME


ABOUT NIELSEN Nielsen N.V. (NYSE: NLSN) is a global performance management

company that provides a comprehensive understanding of what

consumers Watch and Buy. Nielsen’s Watch segment provides media and

advertising clients with Total Audience measurement services across all

devices where content — video, audio and text — is consumed. The Buy

segment offers consumer packaged goods manufacturers and retailers

the industry’s only global view of retail performance measurement. By

integrating information from its Watch and Buy segments and other data

sources, Nielsen provides its clients with both world-class measurement

as well as analytics that help improve performance. Nielsen, an S&P 500

company, has operations in over 100 countries that cover more than 90

percent of the world’s population.

For more information, visit www.nielsen.com.

Copyright © 2015 The Nielsen Company. All rights reserved. Nielsen and

the Nielsen logo are trademarks or registered trademarks of CZT/ACN

Trademarks, L.L.C. Other product and service names are trademarks or

registered trademarks of their respective companies.15/8892

CONSUMER ENERGY SENTIMENTS REPORT

CONSUMER ENERGY SENTIMENTS REPORT · 2019-05-29 · choosing the correct green/ renewable energy...

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