Press Release

STAMFORD, Conn., June 10, 2009 View All Press Releases

Gartner Says Energy Companies Need to do More to Educate Consumers on Energy Efficiency

By 2012, Two-Thirds of Utilities in Developed Countries Will Actively Provide Energy-Efficiency Programs Aimed at Addressing Resource Adequacy and Energy Supply Security

Utilities companies must do more to encourage beneficial consumer behavior to achieve environmental and societal benefits, according to Gartner Inc.

A recent survey, conducted by Gartner, found that consumers are generally interested and willing to participate in energy-efficiency programs but are not fully aware of the programs offered by their providers. The vast majority of survey respondents said that they are willing to participate in such energy-efficiency programs if offered, although they are not willing to pay for more comprehensive information regarding their energy consumption as they consider it an entitlement.

Gartner surveyed more than 4,000 households in the U.S. and the U.K. between December 2008 and January 2009, to probe their interest in conducting e-business with their utility providers and particularly their willingness and motivation to participate in energy-efficiency programs offered by utilities.

“To meet increased pressure from policy makers who see energy efficiency as the key contributor to national energy independence and a means to mitigate the sector’s impact on the environment, utilities must to do more to encourage consumers to take more of an interest in energy efficiency,” said Zarko Sumic, vice president and distinguished analyst at Gartner. “Increased pressure for energy efficiency, from policymakers and consumers alike, has caught both regulators and utilities somewhat unprepared.”

Mr. Sumic said that the current regulatory framework and utility business model was put in place when the primary goal was to provide customers with ubiquitous, reliable and reasonably priced energy, but this now trails energy policies and consumer attitudes in many countries that are increasingly focused on energy sustainability and mitigation of the sector impact on environment.

A number of energy policy initiatives are now being introduced based on the premise that consumers have an interest in participating in energy-efficiency programs. The expectation is that better consumer insight into energy usage will result in voluntary changes in consumption patterns, with consequently better utility asset use and overall consumption reduction, as well as the inherent consumer, societal and environmental benefits.

However, Gartner’s survey found that in both the U.K. and the U.S., more than 50 percent of consumers surveyed said they were unsure if their energy utilities offered energy-efficiency programs. When asked explicitly whether they were interested in participating in such a program, 80 percent of U.S. consumers and 81 percent of U.K. consumers stated that they would participate in energy programs if offered by their utility providers.

“The first conclusion regarding energy efficiency programs is that they are poorly marketed by utilities,” said Mr. Sumic. “The second finding is that in addition to not knowing how to market energy-efficient programs, utilities may not even be that interested in them because the current regulatory framework and the basic cost-plus business model in a regulated utility market are not conducive to energy efficiency.”

The third finding is that there are notable regional differences between the U.S. and the U.K when it comes to consumer awareness of energy-efficiency programs. The survey found that U.K. consumers are less aware of energy-efficiency programs than U.S. consumers (68 percent versus 55 percent).

Gartner attributes such regional differences to two key factors. The first is the different emphasis on energy efficiency as an integral part of national energy policy in the U.K. versus the U.S. Despite a U.K. white paper on energy conservation and a number of European Community (EC) initiatives, the U.K. legislation is by no means as evolved as U.S. energy policy. Secondly, the unbundled nature of the competitive energy retail market in the U.K. makes it harder to tag an entity (for example, a network company or competitive supplier) to be responsible for market energy-efficiency programs because utility benefits are fragmented and retail entities that own consumer relationships are not interested in a potential utility asset-related benefits.

Additional information is available in the Gartner report “Utility Consumer Survey: Energy Efficiency, Do They Care and Why?” The report is on Gartner’s Web site at http://www.gartner.com/DisplayDocument?ref=g_search&id=967122&subref=simplesearch.

 

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