The new energy_consumer_zpryme_smart_grid_insights_itron_sponsor_may_2011

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So who is this New Energy Consumer and how can both utilities and companies across the Smart Grid value chain gel with this next generation? According to The New Energy Consumer study by Zpryme on the surface the typical New Energy Consumer has a college degree or higher, is between 27 – 35 years old, owns their home and has an average household income between 70,000 – $100,000. Sponsored by Itron, The New Energy Consumer study by Zpryme presents a comprehensive look at energy consumption attitudes and perceptions by consumers, the smart grid communication access network market and the enterprise system and purpose-built system market for utilities in the U.S. Further the report explores the market for private and public smart grid wireless access networks. Zpryme has employed a two-stage research approach to accomplish this objective.

The results of each of the research tasks below are presented in this report:

• U.S. Consumer Energy Usage Survey: A survey conducted in mid-March 2011 of 1,082 homeowners or renters age 18 – 75 across the U.S. was developed to assess energy usage behaviors, smart grid awareness, energy bill costs, energy consumption trends, utility satisfaction and their preferences to use emerging energy monitoring devices and equipment.

• Forecasts: Market value projections for smart grid wired and wireless communication access networks, and for enterprise and purpose-built systems and networks for mission-critical utility functions.

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The new energy_consumer_zpryme_smart_grid_insights_itron_sponsor_may_2011

  1. 1. With [mobile technology]Dear Executives,In contrast to overall U.S. consumer prices growing a modest amount in April, becoming synonymousfood and more specifically gasoline experienced significant spikes northward– forcing Americans to become more cognizant of their energy consumption.During this same time smartphones and new technologies such as the iPadhave become the ‗always-connected‘ backbone for the mainstream.Conversely, electric vehicles have become less of a conversation piece andmore of a reality as $5 at the pump predictions loom. with all-things-tech… andWith mobile technology becoming synonymous with all-things-tech,energy/automotive industries forging strategic partnerships, and utilities utilities getting closer togetting closer to understanding their customers, the smart grid will play theultimate role in how the New Energy Consumer will be born. understanding theirSo who is this New Energy Consumer and how can both utilities and companiesacross the Smart Grid value chain gel with this next generation? According toThe New Energy Consumer study by Zpryme on the surface the typical New customers, the [smart grid]Energy Consumer has a college degree or higher, is between 27 – 35 yearsold, owns their home and has an average household income between 70,000- $100,000. Probe this cohort further and accurate information will be the will play the ultimate rolefuel that empowers this group to make energy usage decisions. That said,deprived of information by utilities and their allies consumers are left togamble on how they can better manage household energy consumption – in how the [New Energymaking connectivity and the smart grid essential.All of us at Zpryme and Itron know this study will provide thought-provoking Consumer] will be born.commentary and actionable insight for utilities and companies within the smartgrid ecosystem to make strategic decisions. I personally welcome yourthoughts on the varied subject-matter addressed in this study as well assuggestions for future studies. Please feel free to contact Zpryme about thisstudy via email at smart.grid@zpryme.com.Kind Regards,Jason S. RodriguezCEO & Director of ResearchZpryme Research & Consulting, LLC
  2. 2. | TABLE OF CONTENTS Electric Vehicle Purchasing Conditions ........................................ 28 Smart Grid Benefits ..................................................................... 29 Negative Smart Grid Factors ....................................................... 29| EXECUTIVE SUMMARY..................................................................1 Willingness to Pay for Smart Grid Technology ............................ 30 INFOgraphic: The New Energy Consumer .....................................5 Overall Survey Key Findings ...................................................... 31| BACKGROUND & SCOPE ............................................................12 | CHAPTER 2: MARKET ANALYSIS ................................................ 33| METHODOLOGY .........................................................................14 Smart Grid Architecture ............................................................... 33| CHAPTER 1: NEW ENERGY CONSUMER SURVEY ........................16 Utility Enterprise and Purpose Built Systems ............................... 33 Methodology ..............................................................................16 Benefits of Private Networks....................................................... 35 Summary of Survey Insights .......................................................16 Benefits of Public Networks ........................................................ 36 Demographics.............................................................................17 The Future of Smart Grid Networks ............................................. 36 Average Monthly Electric Bill ......................................................17 Evolving Smart Grid Architecture ................................................ 37 Sensitivity to Rise in Gas Prices ..................................................18 U.S. Enterprise and Purpose-Built System/Network Market Value Time Spent Online ......................................................................18 ................................................................................................... 38 Energy Star Certified Residence...................................................18 U.S. Smart Grid Communication Network Market Value ............. 39 Energy Efficiency Actions............................................................19 | CHAPTER 3: ITRON Q&A .............................................................. 42 Appliance Energy Consumption Rankings ..................................19 Home Energy Monitoring ............................................................20 Energy Management Devices ......................................................20 Frequency of Electricity Usage Monitoring ..................................21 Time Spent Reviewing Electricity Bill...........................................21 Electricity Bill Increases to Prompt Conservation .........................22 Utility Satisfaction .......................................................................22 Demand Response Program Offering .........................................22 Willingness to Participate in Renewable Energy Program ...........23 Willingness to Participate in Time-of-Use Pricing Program ..........23 Communication Preferences about Time-of-Use Pricing ..............23 Smart Meter Presence..................................................................24 Smart Meter Concerns .................................................................24 Communication Preference During an Electrical Outage..............24 Exposure to Electrical Outage .....................................................25 Importance of Communications Technology for Utilities .............25 Utilities and Wireless Carrier Sentiment .......................................26 Smart Grid Definition ..................................................................26 Smart Grid Awareness ................................................................26 Smart Grid Knowledge Level ......................................................27 Utility Information about smart grid ............................................27 Energy Management Device Presence.........................................27 Energy Management Device Preferences Rank............................28
  3. 3. Executive Summary Background & Scope Methodology C1: New Energy Consumer Survey C2: Smart Grid Architecture Market Analysis C3: Itron Q&A Surveyplace| EXECUTIVE SUMMARY daily basis. Further, only 23.0% in Zpryme‘s Home Energy and Smart Grid Survey said that increasing utility communications and networksAs utilities, governments, universities, vendors, standards organizations was important enough to them to warrant a short-term increase in theirand consumers across the globe debate the pros and cons about Smart electricity bills.Grid technology, the one issue that can‘t be disputed is that an increasein information will deliver significant benefits to stakeholders across the Progressive U.S. utilities such as Southern California Edison, AustinSmart Grid ecosystem. According to the Electric Power Research Energy, PG&E, SDG&E, Florida Power & Light, AEP, Xcel Energy andInstitute (EPRI), the increase in information gained from $338 billion to Duke Energy are currently setting the precedent for deploying Smart$476 billion investments in U.S. grid modernization will yield $1.3 Grid networks and technology. On the vendor side, major players suchtrillion to $2.0 trillion in benefits from 2010 to 2030. However, utilities as Itron, Oracle, SAP, IBM, AT&T, Sprint, Verizon, SmartSynch, Alcatel-have plenty of work to do in educating consumers about the Smart Lucent, Cisco and Juniper Networks are aggressively seeking marketGrid, as only 18.5% of respondents in Zpryme‘s Home Energy and leadership in the utility enterprise system and Smart GridSmart Grid Survey said their utility has provided them with information communications market. By 2015, Zpryme projects the U.S. market forabout the Smart Grid. The survey also found that only 4.1% of enterprise and purpose-built systems and networks will reach $6.5respondents considered themselves to be very knowledgeable about billion and the Smart Grid networks market to reach $1.6 billion. Last,the Smart Grid. as utilities continue to debate the use of private or public networks to link utilities and customers with real-time energy information, the rise of Access to Energy Information is the Fuel That Empowers Consumers the New Energy Consumer will ultimately become the driving force Real Time Energy Information/Data Flow (Two Ways) behind the Smart Grid and the Green Economy of the Future. Utility Enterprise Smart Grid Access & Home Area Network System/Network Communication Network Consumer Energy Usage Survey HighlightsThis drive to increase information across the utility value chain will not Impact of High Gas Prices: The recent gasoline price surge has madeonly transform the utility industry as we know it today, but it will also 76.5% of all respondents and 92.2% of High Tech Users (HTUs) moretransform the way consumers perceive electricity, communicate with sensitive to electricity prices.their utility, and radically incentivize consumers to become pro-active The surge in gas prices has made me morerather than passive energy consumers. The increase in gas prices will sensitive to the price of electricity? HTU vs. Overall Respondentsfurther drive consumers to more closely monitor their electricity 100% 2.3% 7.8%consumption as 76.5% consumers in Zpryme‘s Home Energy and Smart 90% Strongly 21.2% disagreeGrid Survey indicated that the recent increase in gas prices has made 80%them pay more attention to their electric bill. 70% Disagree 48.2% 60%Information is the fuel that empowers consumers. Without information, 46.6% Agree 50%consumers and businesses are left to make random choices about the 40%products and technologies they should purchase to help them bettermanage their business or household. However, before any of these 30% Strongly agree 44.0%benefits or transformations can materialize utilities must ‗link‘ 20% 29.9%information with their consumers. This is a bold task that entails 10%significant investments in enterprise systems, information technology, 0% HTU Overallcommunications access networks and smart meters before a single Figure a, Source: Zprymeconsumer can begin to even monitor their energy consumption on a1 www.itron.com | www.zpryme.com The New Energy Consumer: May 2011
  4. 4. Executive Summary Background & Scope Methodology C1: New Energy Consumer Survey C2: Smart Grid Architecture Market Analysis C3: Itron Q&A SurveyplaceEnergy Usage and Cost Trends: Just over a quarter of the respondents prevent power outages, however only, 23.0% said they wouldn‘t mindhave an average electric bill of $101 - $150 a month. Age had a u- paying slightly higher rates over a short time period to fund suchshaped distribution with 56.9% of those aged 18 – 25 paying $100 or technology for utilities. Among HTUs, 44.2% said they wouldn‘t mindless per month for electricity, as well as 67.7% of those aged 46 – 55 paying a higher rate to fund such technology for utilities. When askedpaying $100 or less per month. Nearly half (45.4%) said a 10% to whether they would have any reservations about their utility working19% increase in their electricity bill would prompt energy use with a wireless carrier to expand communications capabilities, 53.1%reductions. Many of the residents had already taken energy efficiency had no reservations, 22.2% did have some reservations, and 23.7%actions in their households. Further, more people monitor/manage their had no opinion about this question. Among HTUs, 61.6% had noelectricity usage on a monthly basis than any other time period. HTUs reservations.were more likely to spend more time reviewing their electric billcompared to the overall group. Respondents ranked the air conditioner Conditions to Purchase an EV: If utilities sponsored a cheaper rate foras the appliance they feel consumes the most energy in their household. electric vehicle charging, 25.0% of respondents said they would consider purchasing an EV. However, only 6.8% of respondents saidUtility Ratings: Seventy percent of homeowners and 66.8% of renters they were already considering purchasing an EV.rated their utility as good or outstanding. Twelve percent ofrespondents said their utility offered a distributed generation program Conditions for Considering the Purchase of an EVwhile only 18.5% said their utility has provided them information about (% of total respondents)the Smart Grid with their bill, over the internet or through othermethods. During the last power outage experienced by respondents, Not interested in an EV 48.2%29.6% said their utility did an excellent job in addressing the situationand getting the power turned back on. During an outage, the top three If my utility sponsored a cheaper rate for 25.0% vehicle chargingpreferred methods of communication reported by consumers are aphone call, email and text message. If my utility allowed me to sell electricity back from my charged vehicle 17.6% If gas reaches $4.00 per gallon 11.5% Currently considering purchasing an EV 6.8% I already own an EV (includes hybrid) 4.7% 0% 10% 20% 30% 40% 50% Figure c, Source: Zpryme Preference for Smart Devices/Technology: Respondents indicated they are most likely to first enable or use a Home Energy Management Figure b, Source: Zpryme System as 34.1% ranked it number one.Utility Communications Network Perceptions: Ninety percent of allrespondents said it was important for utilities to have the most Renewable Energy and Time-of-Use Pricing Programs Interest:advanced communications technology to increase energy efficiency and Twenty one percent of all respondents and 44% of HTUs indicated2 www.itron.com | www.zpryme.com The New Energy Consumer: May 2011
  5. 5. Executive Summary Background & Scope Methodology C1: New Energy Consumer Survey C2: Smart Grid Architecture Market Analysis C3: Itron Q&A Surveyplacethey would be interested in a program where they could use electricity Preferred Method to be Educated about the Smart Gridfrom renewable energy sources and that they would not mind payinghigher rates for the renewable electricity. Residents who said they % of total Education Method respondentswouldn‘t mind paying higher rates for electricity from renewable Mailed materials or brochures from my utility 51.5%sources tended to be male, renters, young, and with higher incomes. Visual presentations (video, online or on T.V.) 45.0%Seventy three percent of all respondents and 83% percent of HTUs Emails from my utility 36.3%indicated they would willing to participate in a demand response or Articles on the internet 32.3%time-of-use pricing program that gave them option to pay a lower rate Commercials from my utility 27.8%for electricity during non-peak usage times of the day. Respondents Visual presentations - Online diagrams or pictures 24.9% Educational materials from the govt. or other non-profit orgs. 23.9%chose email (44.3%) as their top communication method to receive From friends 16.5%information on electricity rate prices in a time-of-use pricing program. White papers 15.5% Utility customer service reps at their office or over the phone 12.8%Smart Meter Presence and Smart Meter Concerns: Seventeen percent Facebook 11.8%of respondents said their residence has a smart meter, but 45.2% Text messages 6.2%indicated they did know the type of electric meter they have. The Applications on my smartphone 4.3% Twitter 2.9%highest level of concern about smart meters was their cost. Concernabout the cost of smart meters was noted for more females (50.5% Figure d, Source: Zprymehighly concerned) than males (37.2% highly concerned). Utility Enterprise System Market HighlightsSmart Grid Awareness, Perceived Benefits and Concerns: Awareness As utilities seek to fully leverage the benefits of the Smart Grid theyof the Smart Grid was associated with income levels, as higher income will increasingly replace legacy systems with enterprise wide systemspeople were more aware of the Smart Grid. Further, HTUs (62%) were that bring independent networks under the control of a single system.more aware when compared to the overall respondents (41%). The Over the next five years, the market will continue to be dominated byhighest rated potential benefit of the Smart Grid was saving money; Oracle, SAP, IBM, and Microsoft, but companies such as SolarWindsthe biggest concern was the cost to build it, which likely shows the and Infor will make a strong push to seize their share of the U.S.current state of the U.S. economy currently has a great effect on Smart market. Zpryme projects the U.S. market value for utility enterprise andGrid perceptions. According to all respondents, when asked about how purpose built systems and networks for mission critical operations willmuch of a premium they would be willing to pay for Smart Grid grow from $4.2 billion in 2010 to $6.5 billion in 2015.technology, 16.9% said a 10% premium (31.2% for HTUs), and 6.1%(25.4% for HTUs), said a 20% premium over current rates. Only 41.0% U.S. Enterprise and Purpose Build System/Network Market Value (Mission Critical Operations) 2010 to 2015 (in U.S. billions)of the overall sample said they were aware of the Smart Grid, with just3.9% very knowledgeable. However, 62.3% of HTUs said they were Segment 2010 2011 2012 2013 2014 2015 CAGRaware of the Smart Grid, with 41.3% very knowledgeable. Enterprise $3.2 $3.6 $4.0 $4.4 $4.8 $5.1 10.0% Purpose Built $1.01 $1.06 $1.14 $1.23 $1.31 $1.37 6.4%Smart Grid Education: Forty five percent of respondents said they Total Market Value $4.2 $4.7 $5.2 $5.6 $6.1 $6.5 9.2%preferred to be educated about the Smart Grid through visual Figure e, Source: Zprymepresentations video, online or on T.V. The compound annual growth rate (CAGR) from 2010 to 2015 is projected to be 9.2 percent. By 2015, the utility enterprise systems market and the purpose built network market are projected to reach $5.1 billion and $1.4 billion, respectively. During this time period, the3 www.itron.com | www.zpryme.com The New Energy Consumer: May 2011
  6. 6. Executive Summary Background & Scope Methodology C1: New Energy Consumer Survey C2: Smart Grid Architecture Market Analysis C3: Itron Q&A Surveyplaceenterprise system market will grow at 10.4 percent annually while the The market value for Smart Grid communication access networks in themarket for purpose built networks will grow at 6.4 percent annually. U.S. is projected to grow from $734.6 million in 2010 to $1.6 billion in 2015. The compound annual growth rate (CAGR) from 2010 to 2015Smart Grid Access and Communication System Market Highlights is projected to be 16.7 percent. In 2010, wired networks accounted for 65.0 percent of the total communication network value, while wirelessAlthough the debate over public versus private smart grid networks is networks accounted for 35.0 percent of the market. In 2015, wiredbeing heavily debated at this time, one thing is clear, utilities across the networks are projected to account for 48.0 percent of the totalU.S. will continue to make significant investments in their communication communication network value while wireless networks are projected toand access networks as these networks form the information backbone account for 52.0 percent of the market. Within the wireless networkof the Smart Grid. Further, without two-way communications and access segment, the market value for public networks reached is projected toto real-time information, the benefits of the Smart Grid simply achieve revenues of $333.4 million by 2015 and grow by 38.8disappear. Such functionality can only be achieved through the percent annually over the next five years.implementation of private or public access Smart Grid networks thatlink the key stakeholders across the utility value chain. INFOgraphic: The New Energy ConsumerCurrently, the private Smart Grid network market is led by companies On the next several pages an INFOgraphic illustrating key findingssuch as Itron, Alvarion, and Trilliant. On the other hand, the market for from the consumer survey are represented to zero-in on:public networks in the U.S. will continue to be led by SmartSynch andthe three major cellular providers in the U.S., Verizon, AT&T and Sprint.  The New Energy ConsumerFurther, major communications and networking technology companies  Consumer Survey Findings (Closer Look)such as Alcatel-Lucent, Cisco, Nokia Siemens, GE MDS, Juniper  How Do Consumers Rank Energy Usage by Appliance?Networks, Ericsson and Huawei will all be seeking to establishthemselves as market leader when it comes to providing the switches,  How will Gas Prices Affect Electricity Consumption?routers, access points, radios and relay equipment to fully serve the  Consumer Survey Findings (By State/By Region)networking needs for utilities. U.S. Smart Grid Communications Network Market Value Forecast 2010 to 2015 - CAGR = 17% (in U.S. millions) $1,800 $1,593 $1,600 $1,349 $1,400 $1,164 $1,200 $978 $1,000 $846 $800 $735 $600 $400 $200 $0 2010 2011 2012 2013 2014 2015 Figure f, Source: Zpryme4 www.itron.com | www.zpryme.com The New Energy Consumer: May 2011
  7. 7. 5 www.itron.com | www.zpryme.com The New Energy Consumer: May 2011
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  13. 13. Executive Summary Background & Scope Methodology C1: New Energy Consumer Survey C2: Smart Grid Architecture Market Analysis C3: Itron Q&A Surveyplace| BACKGROUND & SCOPE Enterprise Systems and Networks: These are utility-wide systems put in place to integrate mission-critical operations and functions into oneThe purpose of this report is to present a comprehensive look at energy unified or consolidated system.consumption attitudes and perceptions by consumers, the smart gridcommunication access network market and the enterprise system and Purpose-built networks: These are proprietary systems put in place atpurpose-built system market for utilities in the U.S. Further the report utilities to serve a specific function and/or meet a specific mission-explores the market for private and public smart grid wireless access critical operation that cannot be delivered through a utility‘s enterprisenetworks. Zpryme has employed a two-stage research approach to wide system or network.accomplish this objective.The results of each of the research tasks below are presented in thisreport:  U.S. Consumer Energy Usage Survey: A survey conducted in mid-March 2011 of 1,082 homeowners or renters age 18 – 75 across the U.S. was developed to assess energy usage behaviors, smart grid awareness, energy bill costs, energy consumption trends, utility satisfaction and their preferences to use emerging energy monitoring devices and equipment.  Forecasts: Market value projections for smart grid wired and wireless communication access networks, and for enterprise and purpose-built systems and networks for mission-critical utility functions.Market DefinitionsFor each of the projections, the expected manufacturer selling priceshave been used to calculate the market value. All figures are stated inU.S. nominal dollars. Also, some percentages may not add up exactlyto 100% due to rounding.Communication Access Networks: These are wired and wirelesscommunication networks for utilities that form the main communicationgateway across the utility landscape and are a critical component ofadvanced metering infrastructure (AMI). In this report, access networksare segmented by backhaul, wide area networks (WAN),neighborhood area networks (NAN) and home area networks (HAN).Further, wireless networks are broken out by private and publicapplication or deployment.12 www.itron.com | www.zpryme.com The New Energy Consumer: May 2011
  14. 14. Executive Summary Background & Scope Methodology C1: New Energy Consumer Survey C2: Smart Grid Architecture Market Analysis C3: Itron Q&A Surveyplace| METHODOLOGYZpryme forecasts in this report were derived using data on U.S. AMIdeployments, utility information technology investments, andgovernment funding for smart grid technology. These key inputs wereused to derive the forecasts for U.S. smart grid communication networksand utility enterprise and purpose-built systems in this report. Thebaseline data were then synthesized with inputs from publicly availableinformation on the smart grid and the communications and enterprisesystem market.The forecast period for this report is 2010 to 2015.Key Forecast Inputs  Historical Data and Projected Smart Meter Deployments: Zpryme utilized historical AMI and smart meter deployment data from publicly available information to develop a forecast for smart meter deployments from 2011 to 2015. This forecast was used as a baseline metric to develop the demand for networks to support the projected AMI deployment in the U.S.  Deployment Costs Per Meter: The average costs to deploy networks were also used to develop growth in the revenues for the overall market during the forecast period.  Forecast Model: Time series forecasting was used to derive the projections in this report. Once key demand inputs were accounted for, econometric modeling was employed to develop the forecasts in this report.14 www.itron.com | www.zpryme.com The New Energy Consumer: May 2011
  15. 15. Executive Summary Background & Scope Methodology C1: New Energy Consumer Survey C2: Smart Grid Architecture Market Analysis C3: Itron Q&A Surveyplace| CHAPTER 1: NEW ENERGY CONSUMER SURVEY  Changes in the average monthly electric bill tend to be associated with age, household size, and household income.Survey on Consumer Energy Usage & Electricity Spending Age has a u-shaped distribution with 56.9% of those aged 18 – 25 paying $100 or less per month, as well as 67.7% of thoseZpryme conducted a survey in mid-March 2011 of 1,082 homeowners aged 46 – 55 paying $100 or less per month. All other ageor renters age 18 – 75 to examine consumer energy usage and groups had fewer paying this low amount. Not surprisingly,electricity spending across the U.S., below are the findings. those households with fewer occupants paid lower electric bills. The largest group (64.5% of those with only one occupant) paidMethodology $100 or less per month. Education level did not show an association with amount paid for electric bills. Lastly, householdA survey was conducted in mid-March 2011 to assess consumer energy income did trend with monthly electric bills. For example,usage and electricity spending behaviors. The representative sample 67.1% of those earning less than $20,000 paid $100 or lesswas composed of 1,082 respondents from across the United States. per month for electricity, while only 33.3% of those earningThis report will present descriptive frequencies of each of the 40 items $200,000 and over paid $100 or less for electricity per month.and then focus on specific delineations about how consumers are using It appears that renters have lower monthly electric bills.energy and how they assess that usage. These specific insights will However, nearly the same proportion of owners (74.7%) andutilize crosstabs among several items. A final section of the report will renters (79.0%) agreed that the recent surge in gasoline pricesoffer some key findings that surfaced in the survey.1 For some of the had made them more sensitive to electricity prices.survey findings, results are segmented between the OverallRespondents and those identified as High Tech Users (HTUs).  When focusing upon those who would curtail household energy usage if their electricity bill increased by just 10% to 19%,High Tech User Definition: Those who reported using a smartphone, several demographic variables were investigated. There weretablet, or mobile internet device for electricity management were slightly more females (47.8%) than males (41.5%). Those ingrouped together to form a high-tech user (HTU) group. A total of 141 middle age had higher representation, with people 46 to 55respondents were identified as HTUs. This HTU group was then years old having the highest proportion (51.9%). There was noinvestigated for characteristics and revealed they: were more likely to discernable association with education level; but more of thosebe male (17.3%) than female (10.4%); were more likely to be young earning less than $20,000 per year (54.6%) would curtail(58.7% were age 35 or younger); have higher education levels energy usage than any other income group.(48.4% were college graduates or higher); spanned all householdincome levels; and had proportionately more representation (14.8%) in  Overall, the large majority (93.6%) of respondents felt it wasthe group that used the internet/email for three to five hours per day important for utilities to have the most advancedthan for any other internet/email usage time period. communications technology to increase energy efficiency and prevent power outages; however, only 23.0% said theySummary of Survey Insights wouldn‘t mind paying slightly higher rates over a short time period to fund such technology for utilities.There are several insights that emerge when investigating the types ofrespondents who are associated with various energy consumption  Just over half of respondents (53.1%) indicated that they wouldbehaviors: be comfortable with their utility working with a cellular provider such as AT&T, Sprint or Verizon to expand a utility‘s1Please note that for some of the items, percentages may not add to 100% because only valid responses communications capabilities.were used.16 www.itron.com | www.zpryme.com The New Energy Consumer: May 2011
  16. 16. Executive Summary Background & Scope Methodology C1: New Energy Consumer Survey C2: Smart Grid Architecture Market Analysis C3: Itron Q&A Surveyplace Education level was relatively high with most (79.6%) saying they had  Respondents were asked to rate their utility as outstanding, at least some college. Only 1.5% had less than a high school diploma, good, average, or poor. Some comparisons between these while the other 18.9% reported having a high school diploma or a ratings and other items were made. Seventy percent of GED. homeowners and 66.8% of renters rated their utility as good or outstanding. No relationship was found between those rating Household Income: Reported annual household incomes were from less their utility as good or outstanding and age of the respondent. than $20,000 to those with over $200,000. The largest category When looking at the top 10 states for the sample, the good or included those reporting from $30,001 to $50,000 per year (24.6%). outstanding ratings varied from 57.6% (Georgia) to 76.6% Over half of the sample (52.1%) had incomes of $50,000 or less. (Ohio); all other eight states fell in between those two percentages. One could conclude that over half of the State of Residence: Geographically, the top 10 states with the most respondents in the top 10 states rated their utility favorably. respondents were: California (10.3%), Florida (7.2%), New York (6.1%), Pennsylvania (6.0%), Michigan (4.6%), Texas (4.6%), Ohio  Another set of comparisons was conducted between those (4.4%), North Carolina (3.8%), Illinois (3.5%), and Georgia (3.1%). residents who said they wouldn‘t mind paying higher rates for These ten states represented over half (53.6%) of the 1,082 electricity from renewable sources, and some demographic respondents. variables. More males (25.2%) than females (18.3%) said they Average Monthly Electric Bill would pay higher rates; and those who were renting (24.3%) would pay higher rates than those owning (19.3%) their residences. Younger residents (those 18 to 25 at 35.0%; those When asked about their average monthly electric bill, people reported 26 to 35 at 26.1%) were more likely to agree to higher rates amounts from less than $50 to over $500. The largest single group than any of the other age groups. Education level did not seem (27.3%) said their average bill was $101 to $150 per month, while to be associated with willingness to pay higher rates; but the rest of the group revealed (in descending order): $76 - $100 household income level exhibited a modest trend that showed (19.5%), $51 - $75 (15.6%), $151 - $200 (14.7%), $201 - $300 those earning higher incomes more willing to pay higher rates (10.2%), less than $50 (9.0%), $301 - $400 (2.2%), over $500 for renewable energy. (0.9%), and $401 - $500 (0.6%). Four out of ten (44.1%) spent $100 or less per month on average.Demographics Respondent Average Monthly Electric Bill 30.0% 27.3%Gender and Age: There were more female respondents (61.5%) thanmales (38.5%) with nearly two-thirds of the sample (65.7%) reporting 25.0%that they owned their home or place of residence. The rest of the 19.5% 20.0%sample (34.3%) said they rented their residence. More of the 15.6% 14.7%respondents said they were from 56 to 65 (27.5%) years old than any 15.0%other age group, although the reported age span was from 18 to 75 9.0% 10.2%years. The average age for the entire adult sample was 43.12 years. 10.0% 5.0% 2.2%Household Size and Education: The most popular category to indicate 0.6% 0.9%the number of people in their household was three to five people 0.0% Less than $51 - $75 $76 - $101 - $151 - $201 - $301 - $401 - Over(38.8%). Other household sizes were: two people (37.3%), one person $50 $100 $150 $200 $300 $400 $500 $500(20.8%), six to ten people (3.1%), and over ten people (0.1%). Figure 1, Source: Zpryme17 www.itron.com | www.zpryme.com The New Energy Consumer: May 2011
  17. 17. Executive Summary Background & Scope Methodology C1: New Energy Consumer Survey C2: Smart Grid Architecture Market Analysis C3: Itron Q&A SurveyplaceSensitivity to Rise in Gas PricesThe respondents were asked whether the recent surge in gasoline priceshad made them more sensitive to electricity prices. Over three fourths(76.5%) said they were sensitive as a result. Compared to the overallgroup, high tech users (HTUs) were more likely to be impacted by therecent increase in gas prices as 44.0% strongly agree (vs. 29.9%overall) that they are more sensitive to electricity prices as a result ofthe increase in gas prices. The surge in gas prices has made me more sensitive to the price of electricity? HTU vs. Overall Respondents 2.3% Figure 3, Source: Zpryme 100% 7.8% Strongly 90% 21.2% disagree Energy Star Certified Residence 80% 70% Disagree The respondents were asked whether their residence is Energy Star 48.2% certified. Just over one fifth of the overall group (21.5%) said yes 60% their residence is Energy Star certified. Compared to the overall group 46.6% 50% Agree 50.4% high tech users (HTUs) have an Energy Star certified residence. 40% Also close to a third for each group (31.2% overall and 36.2% HTU) did not know whether their home is Energy Star certified. 30% Strongly agree 20% 44.0% Is your residence Energy Star certified? 29.9% 10% HTU vs. Overall Respondents 100% 0% HTU Overall 90% Figure 2, Source: Zpryme 31.2% 80% 36.2%Time Spent Online 70% Dont know 60% 18.4% NoPeople were queried about how much time per day they spent on the 50%internet/email. Their responses were: less than one hour (4.7%), one to 42.3% Yes 40%two hours (26.1%), three to five hours (42.1%), six to eight hours(15.3%), and over eight hours (11.8%). Nearly 70% (69.2%) spent 30% 50.4%over three hours per day on the internet/email. This high percentage 20%of time could be partially explained because this survey was internet- 10% 21.5%based itself. 0% HTU Overall Figure 4, Source: Zpryme18 www.itron.com | www.zpryme.com The New Energy Consumer: May 2011
  18. 18. Executive Summary Background & Scope Methodology C1: New Energy Consumer Survey C2: Smart Grid Architecture Market Analysis C3: Itron Q&A SurveyplaceEnergy Efficiency Actions Appliance Energy Consumption RankingsMany of the respondents revealed that they had performed energy Respondents were asked to rate several items found in most homes thatefficiency actions in their residences: use energy efficient appliances consumed the most energy by using a ten point scale (where 1 is low(64.5%), had caulked around doors and windows (46.0%), installed and 10 is high). Their average ratings in descending order were: airprogrammable thermostats (42.7%), installed energy efficient windows conditioner (7.9), clothes dryer (6.6), water heater (6.3), refrigerator(37.9%), installed extra insulation (27.7%), installed blanket around (6.2), clothes washer (5.5), oven (5.0), dish washer (4.9), televisionwater heater (18.7%), had an energy audit (10.2%), and installed a (4.5), range (4.4), and personal computer (3.9) – see INFOgraphicradiant barrier in the attic (6.3%). Another specified action most often beginning on page 5 for more details.listed was using energy efficient light bulbs. Consumer Ranking of Appliances that Actions Taken to Make Residence More Energy Effcient Consume the Most Energy (% of total respondents) Average Rating Score (1 is low and 10 is high) Air conditioner 7.9 Energy efficient appliances 64.5% Clothes dryer 6.6 Water heater 6.3 Caulked around windows and doors 46.0% Refrigerator 6.2 Programmable thermostat 42.7% Clothes washer 5.5 Oven 5.0 Energy efficient windows 37.9% Dishwasher 4.9 Television 4.5 Extra insulation 27.7% Range 4.4 Personal Computer 3.9 Blanket around water heater 18.7% 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 Energy audit 10.2% Figure 6, Source: Zpryme Radiant barrier in attic 6.3% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Figure 5, Source: Zpryme19 www.itron.com | www.zpryme.com The New Energy Consumer: May 2011
  19. 19. Executive Summary Background & Scope Methodology C1: New Energy Consumer Survey C2: Smart Grid Architecture Market Analysis C3: Itron Q&A SurveyplaceHome Energy Monitoring Energy Management DevicesSeveral choices were listed to monitor and/or manage electricity Respondents also rated the importance of being able tousage. The frequency of respondents who utilized them were: paper monitor/manage their electricity usage from the samebill (74.3%), traditional internet (27.3%), email (21.9%), telephone locations/devices. Respondents considered it very important to monitor(13.0%), smartphone app (9.2%), mobile internet (8.8%), vehicle app energy usage using the following devices in order of importance: mail(4.0%), and tablet (e.g., iPad) (2.9%). (47.7%), traditional internet (34.4%), in-home display (30.7%), email (26.8%), telephone (19.7%), mobile internet (13.0%), smartphone app Devices or Items Used to Monitor/Manage Electricity Usage (11.2%), and tablet (7.9%). (% of total respondents) Paper bill 74.3% Percent who Consider it Very Important to Manage/Monitor Electricity by Method/Device (% of total respondents) Traditional internet 27.3% Mail 47.7% Email 21.9% Traditional internet 34.4% Telephone 13.0% Smartphone app 9.2% In-Home Display 30.7% Mobile internet 8.8% Email 26.8%Vehicle (application) 4.0% Telephone 19.7% Tablet (e.g. iPad) 2.9% Mobile internet 13.0% 0% 20% 40% 60% 80% Smart phone app 11.2% Figure 6, Source: Zpryme Tablet (e.g. iPad) 7.9% 0% 10% 20% 30% 40% 50% 60% Figure 7, Source: Zpryme20 www.itron.com | www.zpryme.com The New Energy Consumer: May 2011
  20. 20. Executive Summary Background & Scope Methodology C1: New Energy Consumer Survey C2: Smart Grid Architecture Market Analysis C3: Itron Q&A SurveyplaceFrequency of Electricity Usage Monitoring Time Spent Reviewing Electricity BillThe frequency of monitoring/managing electricity usage for the overall How long people spend in reviewing their electricity bill every monthsample was: monthly (62.0%), not at all (12.1%), weekly (10.6%), was: not at all (4.0%), less than 30 seconds (5.0%), 30 seconds to onedaily (6.0%), in real time (2.8%), hourly (1. 9%), and yearly (1.5%). minute (12.0%), one to three minutes (27.0%), four to six minutesHTUs were more likely to monitor their usage in real-time (12.1%), (24.1%), seven to nine minutes (9.9%), and 10 minutes or morehourly (9.9%), daily (18.4%) and weekly (27.0%) when compared to (15.0%). Close to half (48.0%) spent three minutes or less to reviewthe overall group. their bill. Compared to the overall group, HTUs were more likely to spend more time reviewing their electric bill for more than 10 minutes How often do you monitor your electricity usage? or more (29.1%). 70% Overall vs. HTU Respondents How much time do you spend reviewing your 35% electricity bill every month? 60% Overall vs. HTU Respondents 30% 50% 25% 40% 20% 30% 15% 20% 10% 10% 5% 0% 0% Real-Time Hourly Daily Weekly Monthly Yearly Not at all Less than 30 30 seconds - 1–3 4–6 7–9 10 minutes Not at all seconds 1 minute minutes minutes minutes or more Overall HTU Overall HTU Figure 8, Source: Zpryme Figure 9, Source: Zpryme21 www.itron.com | www.zpryme.com The New Energy Consumer: May 2011
  21. 21. Executive Summary Background & Scope Methodology C1: New Energy Consumer Survey C2: Smart Grid Architecture Market Analysis C3: Itron Q&A SurveyplaceElectricity Bill Increases to Prompt ConservationWhat percentage increase in their electricity bill would prompt them toreduce energy usage was asked. Nearly half (45.4%) said a 10% to19% increase would prompt conservation. Other responses were: anincrease of 20% to 29% (33.5%), an increase of 30% to 39%(10.3%), an increase of 40% to 49% (3.0%), or an increase of 50% orgreater (4.7%). Apparently, most people (78.9%) would takeconservation actions with 29% or lower electricity cost increases. Increase in Electricity Bill Needed to Prompt Pro-active Steps to Curtail Household Electricity Usage (% who would change behavior) Increase by 10% - 19% 45.4% Figure 11, Source: Zpryme Increase by 20% - 29% 33.5% Demand Response Program Offering Eleven point five percent reported that their utilities offered a Increase by 30% - 39% 10.3% distributed generation program, while 17.1% said no, and the remainder (68.4%) said they weren‘t sure. Increase by 40% - 49% 3.0% Does your utility offer a distributed generation program? Increase by 50% or 4.7% more Yes, 11.5% 0% 10% 20% 30% 40% 50% Figure 10, Source: ZprymeUtility Satisfaction No, 17.1%When rating their electric utilities, more respondents seemed satisfiedthan not. Ratings were: outstanding (18.4%), good (50.6%), average Im not sure, 68.4%(24.6%), and poor (3.4%). Figure 12, Source: Zpryme22 www.itron.com | www.zpryme.com The New Energy Consumer: May 2011
  22. 22. Executive Summary Background & Scope Methodology C1: New Energy Consumer Survey C2: Smart Grid Architecture Market Analysis C3: Itron Q&A SurveyplaceWillingness to Participate in Renewable Energy Program Interest in Participating in a Demand Response Program that Offerred Lower Electric Rates During Non-Peak Times of the Day HTU vs. Overall RespondentsPeople were asked whether they would be interested in a program to 100%use renewable energy sources. Sixty-one point six percent said yes, 90% 17.1% 24.2%but they would want to have the same electricity rate; 21.0% said yes 80%and they wouldn‘t mind a higher rate; and 14.3% said they were not 70%interested in such a program. Compared to the overall group, HTUs 60% Nowere about 2 times more likely to be willing to pay a higher electric 50%rate for electricity from renewable sources. 40% 82.9% 73.4% Yes 30% Interest in Utility Program to Use Electricity 20% from Renewable Sources 10% HTU vs. Overall Respondents 0% 100% HTU Overall 14.3% 14.3% Figure 14, Source: Zpryme 90% 80% No, I would not be Communication Preferences about Time-of-Use Pricing interested in such a 70% program 42.1% A series of communication methods for receiving information about 60% time-of-use pricing programs was presented to respondents to identify 61.6% Yes, but I would not which they deem the most important to receive pricing information 50% pay more for the electricity upon. Respondents considered the following very important (in 40% descending) order): email (44.3%), traditional internet (40.2%), utility 30% Yes, and I would not website (33.7%), phone (29.6%), in-home display (26.5%), text 20% 43.6% mind paying a slightly higher rate message (22.3%), Facebook (15.2%), mobile internet (13.9%), tablet (7.5%), and Twitter (6.4%). 10% 21.0% Percent Who Consider it Very Important to Recieve 0% Time of Use Pricing Information HTU Overall by Communcation Method | (% of total respondents) Figure 13, Source: Zpryme Email 44.3%Willingness to Participate in Time-of-Use Pricing Program Traditional internet 40.2% Utility Website 33.7%Their willingness to participate in a time-of-use pricing program to be Phone call 29.6%able to use lower rates during off-peak times was also asked: 73.4% In-Home Display 26.5%said they were willing, and 23.5% said they were not. Among HTUs, Text message 22.3%82.9% indicated they would be interested in participating in a time-of- Facebook 15.2%use program that offered lower rates during off-peak times of the Mobile internet 13.9%day. Tablet (e.g. iPad) 7.5% Twitter 6.4% 0% 10% 20% 30% 40% 50% Figure 15, Source: Zpryme23 www.itron.com | www.zpryme.com The New Energy Consumer: May 2011
  23. 23. Executive Summary Background & Scope Methodology C1: New Energy Consumer Survey C2: Smart Grid Architecture Market Analysis C3: Itron Q&A SurveyplaceSmart Meter Presence Communication Preference During an Electrical OutageResidents were asked whether they had a smart meter and 17.3% said Another item asked them to indicate the importance of severalyes, 33.8% said no, with the rest (45.2%) were not sure what type of communication methods in receiving information about electricalelectric meter they had. outages by using an importance scale. Respondents considered the following very important (in descending order): phone call (47.1%), email (33.5%), text message (30.8%), internet (29.9%), utility website (26.0%), in-home display (25.8%), mobile internet (18.6%), Facebook (13.4%), Twitter (7.2%) and by Tablet (6.5%). Percent Who Consider it Very Important to Recieve Electricity Disturbance or Outage Information by Communcation Method (% of total respondents) Phone call 47.1% Email 33.5% Text message 30.8% Figure 16, Source: Zpryme Traditional internet 29.9%Smart Meter Concerns Utility Website 26.0%In general, the respondents were asked what level of concern they had In-Home Display 25.8%about smart meters. Respondents were highly concerned with cost Mobile internet 18.6%(48%), benefits they receive (36%), data and billing accuracy (36%), Facebook 13.4%and data privacy (31%). They were least concerned with radio andfrequency emissions (24%). Twitter 7.2% Smart Meter Level of Conern by Potential Issue Area Tablet (e.g. iPad) 6.5% (% of total respondents by area) 0% 10% 20% 30% 40% 50% 100% 9% Figure 18, Source: Zpryme 90% 36% 31% 80% 28% 44% 48% 70% 60% Highly Concerned 50% 24% 32% 32% Moderately Concerned 40% 29% 34% 30% Least Concerned 14% 17% 20% 39% 9% Not Concerned 8% 10% 18% 19% 13% 14% 0% Radio Data and Data Cost Benefits and Frequency Billing Privacy Value to you Emissions Accuracy Figure 17, Source: Zpryme24 www.itron.com | www.zpryme.com The New Energy Consumer: May 2011
  24. 24. Executive Summary Background & Scope Methodology C1: New Energy Consumer Survey C2: Smart Grid Architecture Market Analysis C3: Itron Q&A SurveyplaceExposure to Electrical Outage Importance of Communications Technology for UtilitiesOver the past 12 months, residents rated how their utility had Residents were further probed about whether it was important forresponded to an electrical outage that was caused by severe weather. utilities to have the most advanced technology for electricity deliveryForty-four point five percent said the utility got power back on in a and to prevent outages. Seventy-one point six percent said yes buttimely manner but could have communicated the status better; 29.6% they didn‘t want rates raised to fund advanced technology; 23.0%said their utility did an excellent job and kept them fully informed; said yes and they wouldn‘t mind paying slightly higher rates over a20.1% said no outages had occurred; and 5.9% said their utility had short time period; and 5.5% said no, this was not important for utilities.done a poor job. Among HTUs, 44.2% indicated they would be willing to pay a slightly higher electric rate in the short term to fund advanced communication technology. Is it important for your utility to have the most advanced and secure technology, network and communication systems available? HTU vs. Overall Respondents 100% 5.8% 5.5% No, this is not 90% important for utilities 80% 70% 50.0% Yes, but I would not 60% want the utility to raise 71.6% my rates to fund the 50% upgrade 40% 30% Yes, and I would not mind paying a slightly 20% 44.2% higher utility bill in the Figure 19, Source: Zpryme short term to fund the 10% 23.0% upgrade 0% HTU Overall Figure 20, Source: Zpryme25 www.itron.com | www.zpryme.com The New Energy Consumer: May 2011

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