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Insights to Irish consumer behaviour and action IEA DSM Task 24

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The Sustainable Energy Authority Ireland gave this overview on consumer behaviour at the Task 24 expert workshop in Dublin

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Insights to Irish consumer behaviour and action IEA DSM Task 24

  1. 1. Insights to Consumer Behaviour IEA DSM Workshop –Task 24 08.04.16 Josephine Maguire
  2. 2. Research Methodology • Quantitative research carried out in 2013 & 2014 • Nationally representative face-to-face survey • 659 households with household decision maker • Weighted to the CSO population in terms of spread • Supplemented by qualitative research-focus groups • Additional references to CER research of a different nationally representative sample
  3. 3. General Attitudes to Spend & the Household 3
  4. 4. Consumer Mindset • My Wallet – My Way – Self reward, convenience and control remain primary considerations in the consumer mind, in general and when considering energy investment • The energy improvement journey – Investment is expected to offer enhancement to the home experience and to be part of an on-going journey towards incremental improvement • Demand and Command – Post recession consumers are armed with a demand-command confidence. They demand transparency, value and accountability in investment decisions • Home central – Increased willingness to invest in the home, as more time is spent at home means comfort and value drive investment decisions Prevailing consumer trends reflected in the research:
  5. 5. Preferences for a €5,000 windfall Renovate joint 4th of 10 options Reward-Recovery dichotomy evident in expenditure decisions • Pay off debts (recovery) and going on holidays (reward) are the two most popular activities in the event of a windfall (47%) The relevance of Home Central is evident in the number of consumers willing to invest: • Home renovation interest level is at 14% in 2014 with an additional 14% indicating they would engage in home redecoration • 3 in 5 respondents have carried out some home improvement in last 3 years, main one was home/room redecoration (43%)
  6. 6. 6 Home/Energy Improvement Interest & Awareness
  7. 7. Energy: A confusing landscape • The energy landscape is fraught with confusion and complexity – Energy costs from suppliers are little understood (just 6% can cite a unit cost of gas and 13% a unit cost of electricity, regardless of accuracy) – Increase in number of offers/products available but low levels of product understanding ( only 17% of electricity customers and 19% of gas customers claim to fully understand electricity and gas offers) – Decreasing levels of switching (12% electricity, 16% gas), indicating a reluctance to engage with the energy market (29% in 2011) • Thus, the outcome of energy investment decisions made in this context cannot meet the Demand-Command consumer mindset – Whilst input costs can be clearly specified, measures of success are less transparent due to knowledge deficits – Implicit measures and expectations may be assumed, but the explicit outcome is not likely to be clear
  8. 8. Awareness and Attitude to Energy Improvement • That may explain why awareness of energy efficiency measures is high and increasing, but the level undertaking improvements in the last 2-3 years is static – 82% of respondents believe their home would benefit from some form of energy efficiency improvement (increase of 8% on 2013) – Highest interest in rural communities and those aged 40-50’s – Most favoured measures include attic insulation, solar panels and window glazing • Future interest is somewhat muted when action involved(14%) – 36-55 year olds and those living in Urban areas are most likely to undertake energy improvements in next 5 years – Most likely measures are lighting improvement, draught proofing, boiler and controls upgrade and attic insulation
  9. 9. Summary of Retrofitting Challenges –The Consumer Journey Financing  Accessible, flexible and cost effective finance  Ability to repay  Hidden costs  Availability of grants or some incentive  Unaware of savings or inability to calculate savings Emotional engagement required to break inertia. Knowledge  What specifically do I need to do to my house?  Where to source trusted suppliers for larger and complex jobs?  How will I know it’s done to the proper standards? Information Upheaval  Disruption of home  Disturbance to life  Fear Factor…new  Organising and project managing  Where do I go to source info…to learn?  What are the grants, incentives etc.  What are the benefits?  …Message that the home, like a car, needs to be kept serviced (boiler upgrade)
  10. 10. 10 Energy Efficiency Improvement Payment Methods & Loan Repayments
  11. 11. Energy Improvements: Funding profile • 61% cited expense as the main reason for not carrying out measures (down from 71% in 2013) • the investment level: – 57% would fund the initiatives from savings (65% in 2013) – 44% would be willing to take out some form of loan to cover part of costs (up from 34% in 2013) • The level at which consumers are willing to borrow is somewhat modest – the average amount for those willing to borrow is €4,852 (€2,899 :2013) – with an average monthly repayment of €164, (€96 in 2013) • Evidence of the consumer mind-set of initiatives as an on-going journey of incremental energy improvement steps
  12. 12. Energy Improvements: Loans and Incentives • When seeking a loan, the interest rate is most important (37%) • Other considerations are also central such as: – The flexibility of the loan in terms of timing 24% – The payback period 21% – The ease of securing approval 18% • Top three incentives to increase home energy upgrades were assessed by consumers, and the My Wallet – My Way traits of self reward, convenience and control are evident in the ranking of the options – Cash Back once work is complete 87% – Discount on Cost of Work upfront 82% – Reduced Property Tax Based on a better BER 65%
  13. 13. Sources of Advice/ Recommendation on Energy Efficiency Improvements
  14. 14. Friends & family are the main sources of advice • Consumer mind-set of maintaining control and valuing convenience means – friends/neighbours and family rate as the highest source of advice on energy initiatives – there is a noticeable increase in getting advice from local accredited contractors – advice sourced from the energy supplier has declined
  15. 15. In Summary • Home energy improvement on agenda • Information and knowledge gap • Theory to action • Financing when decision made
  16. 16. The Sustainable Energy Authority of Ireland is partly financed by Ireland’s EU Structural Funds Programme co- funded by the Irish Government and the European Union. Thank you.

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