Managing rapid consumer adoption of new energy technologies

Encouraging the rapid adoption of household Consumer Energy Resources (CERs), such as rooftop photovoltaics, home batteries, and electric vehicles (EV), is essential for Australia’s efforts to decarbonise its energy system. Driving CER adoption requires understanding how consumers perceive different approaches to controlling their CERs and managing energy imports/exports. How to understand and help electricity consumers on this path was the aim of the recently completed iMOVE and C4NET project, Consumer adoption of technologies for Net Zero emissions, and its final reports are available below.

CERs allow households to generate and store energy, as well as shift their energy usage patterns. As such, they pose unique technical challenges due to the fact they permit decentralised, two-way flows of electricity, but operate on a network designed for centralised, one-way flows.

Understanding how consumers perceive potential solutions to these challenges is key to ensuring their adoption and ongoing support of CERs.

Background

While many consumers express a general desire to maintain control over their CERs, how this manifests is unclear, yet it will clearly have a significant impact on how Australia tackles these challenges.

Do consumers want full or partial control over their CERs? Or would they prefer energy-as-a-service, relinquishing control to a third-party in return for guaranteed access to specific benefits?

As levels of consumer control increase, so too will the need for additional network upgrades, which will further increase energy bills. To what extent are consumers prepared to trade-off their desired level of control to minimise energy bill increases?

This research, conducted by Deakin University’s Better Consumption Lab and co-funded by iMOVE CRC, is part of the Centre for New Energy Technology’s broader Enhanced System Planning project. This project is considering future planning options for incorporating Distribution Network System Providers (DNSP) into the Integrated System Plan (ISP), to close some of the existing gaps in forecasting and modelling.

Deakin University’s research is a key part of this, providing insight into how consumers may feel about how their CERs are utilised to support the broader energy system.

Methodology

Deakin University surveyed 1,406 Victorian homeowners to assess how much control they wanted over different CERs, as well as their perception of policies for managing the import/export of electricity between CERs and the network.

They were asked to select the level of control they wanted over three CERs: electric vehicle charging, electric space heating and electric water heating.

They could choose from:

• Full control: charging, cooling or heating at any time
• Partial control: choosing when they occur, such as when their home’s solar panels are generating power
• Energy-as-a-service: letting their power retailer manage when they occur, while guaranteeing they will still receive their preferred service level

Respondents were then presented with information about the implications of their choices, in the form of increased energy bills due to required network upgrades. Full control saw the largest bill increases, and energy-as-a-service the smallest. Armed with this knowledge, they were offered the opportunity to change their preferred control options.

They were also randomly presented with a policy scenario based on of one of the following two approaches:

• Mandated mechanism, varying the allowable size of CER imports/exports depending on network supply/demand.
• Market-based mechanism involving two-way pricing, with tariffs for imports/exports varying depending on network supply/demand.

EV charging

Respondents were asked to imagine they had an EV and that their home could generate/store some of its own power, then offered a choice of charging control.

Initially, 47% opted for partial control, 44% for full control and 9% for energy-as-a-service. After learning of the billing implications, preference for partial control rose to 56%, energy-as-a-service rose to 25% and full control fell to 20%.

Almost two-thirds (65%) of respondents who initially preferred full control over home EV charging were prepared to accept less control once they became aware of the potential billing implications.

Electric space heating

Respondents were asked to imagine that they had an electric heating/cooling system and that their home could generate/store some of its own power. They were then offered a choice of charging control.

Initially, 61% opted for full control, 32% for partial control and 7% for energy-as-a-service. After learning of the billing implications, preference for partial control rose to 48%, energy-as-a-service rose to 28% and full control fell to 24%.

Slightly more than half (56%) of respondents who initially desired full control over electric space heating came to prefer lower control/lower bill options, once they became aware of the bill-related impacts of maintaining full control.

Electric water heating

Respondents were asked to imagine that they had an electric hot water system and that their home could generate/store some of its own power. They were then offered a choice of charging control.

Initially, 49% opted for full control, 42% for partial control and 9% for energy-as-a-service. After learning of the billing implications, preference for partial control rose to 45%, energy-as-a-service rose to 24% and full control fell to 31%.

Almost three in five (59%) respondents who initially wanted to maintain full control over electric water heating indicated a preference for an option with lower control/lower bills, once they became aware of the trade-off between CER control and energy bill magnitude.

Cross-technology comparisons

Before billing implications were explained, full control was the most popular preference for electric water heating and electric space heating. Partial control was initially only most popular for EV charging.

In every category, energy-as-a-service was initially the least popular option.

After learning of the billing implications, partial control became the most popular preference across all three categories. Energy-as-a-service saw the greatest post-explanation increases in preference, albeit from a low base.

Key takeaways

Consumers have a baseline preference for maintaining full control over their CERs, but will trade-off some control in return for reduced future energy bill increases. Highlighting the personal energy bill-related implications of maintaining full CER control will be essential to bolstering support for initiatives that reduce (without eliminating) CER control.

Managing CER) imports/exports

Respondents were randomly allocated to see either a mandated mechanism with imports/export caps, or a market-based mechanism with variable power prices.

Overall opinion of the market-based mechanism was significantly more favourable. The mandated mechanism was seen as less fair overall, although both policy mechanisms had similarly low levels of perceived equity.

Those who felt financially stretched had a less positive opinion of the market-based mechanism, while it was more favourably evaluated among those with greater environmental worry.

Neither mechanism significantly affected technology adoption intentions for EVs or electric water heating. However, both mechanisms significantly negatively affected technology adoption intentions for electric space heating.

Key takeaways

When evaluating energy import/export mechanisms, the market-based mechanism with variable pricing elicited more favourable opinions – and was seen as fairer – relative to the mandated mechanism with import/export caps.

Notwithstanding this relative difference, absolute evaluations of the market-based mechanism were not strongly positive, suggesting begrudging acceptance rather than enthusiastic support.

While neither mechanism significantly affected intentions to adopt EVs or electric water heating, both decreased intention to adopt electric space heating. Policy makers must remain attentive to the potential for energy market reform to slow the adoption of low emission technologies.

Expected project impacts

There is an emerging body of evidence that CER will play a major role in reducing future infrastructure cost for consumers. But how much CER is available and under what terms will depend on both consumer decisions as well as energy markets, and the impact of policy and regulatory settings.

Having insight into consumer preferences and how their considerations are impacted by deeper understanding of new CER markets is important to understand. C4NET’s delighted that Deakin University’s research, based on considered and sound methodology, will be an important contributor to this.

James Seymour, CEO, C4NET

Download the final report

Download your copy of the final report, Consumer perceptions of policies targeting consumer energy resources (CERs): Third-party control and managing imports/exports, by clicking the button below.

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