Friday, April 23, 2010

Post # 12 - Consumer Resistance to "Smart" Appliances? Accenture Study Suggests "Yes"

An important Smart Grid element is the development of “smart” appliances that would turn on or off automatically as the cost of electricity fluctuates and demand for power rises and falls. The concept is that smart appliances will provide utilities with a tool to manage peak demand (and perhaps lessen the need for new generation); help consumers save money on their electric bills by shifting electric use to lower demand (less expensive) time periods; and, by rationalizing consumer use, perhaps lower overall energy usage.

But will consumers accept smart appliance that effectively cede control over appliance usage to the utility? A report issued this week by Accenture, the global management consulting, technology services and outsourcing company, suggests that this may be a tough sell. Indeed, the report suggests strong consumer skepticism on the key question of whether smart appliances will lead to lower electric bills. The report also implicitly highlights a recurring feature of Smart Grid discussions: those discussions tend to take place in the relatively rarified community of experts, industry participants, investors, and bureaucrats. The general public (a) usually is not involved in these discussions, (b) may not have a full understanding of the concepts, but (c) may have a healthy (and justified) skepticism of how concepts like Smart Grid and demand management will work in reality.

Turning to Accenture's findings – based on a on a global survey of more than 9,000 consumers in 17 countries – the report concludes that consumers are not willing to allow electricity providers to remotely limit the use of their home appliances as part of electricity management plans without significant rate discounts. The report also found that almost half of consumers would be deterred from joining electricity management programs if their electricity bills were to increase as a result. Consumers also have major privacy concerns.

Thus, when asked what would discourage them from using electricity management programs, 46 percent of the consumers surveyed cited higher electricity bills — despite the fact that electricity management programs are designed to reduce usage during peak time rates and therefore lower costs. In addition, 41 percent of the respondents cited as a deterrent their energy provider’s selling, at a profit, the electricity they themselves saved. Thirty-two percent said they would be discouraged from using electricity management programs if it would give their electricity provider greater access to their personal electricity consumption data.

Moreover, only 16 percent of consumers said they would allow electricity providers to remotely limit their use of certain household appliances if they have no option to reverse the action taken by the provider and if no price discount were offered. But price discounts would increase that figure. Thus, 24 percent said they would give utilities such control when offered a price discount of 10 percent, while 35 percent said they would give utilities such control when offered a price discount of 20 percent.

The report also found that while 75 percent of consumers believe they understand the actions they need to take to optimize their electricity consumption, only 28 percent are aware of and understand programs offered by electricity providers to help them do so. Further, only 29 percent of consumers said they trust their electricity providers to advise them on actions they can take to optimize their electricity consumption.

Accenture’s summary of its report can be found here.

No comments:

Post a Comment