Inaccurate consumer perceptions of monetary savings in a demand-side response programme predict programme acceptance

Abstract

Demand-side response (DSR) measures are critical to integrating variable renewable generation into electric grids. Time-of-use rates (TOU) are a common DSR mechanism that seeks to shift electricity use to low-demand times using financial instruments. However, consumers generally have a poor understanding of their electricity use and bills, raising questions about the extent to which TOU participation is driven by perceptions of savings versus actual savings. We find that among 8,702 residents who opted into a pilot TOU programme, the TOU treatment decreases on-peak use compared to a control group, but this effect is small. Perceived savings is the strongest predictor of intent to remain on TOU, over and above actual savings, even though it is only weakly related to actual changes in bills and usage. Residents may thus join DSR programmes based on perceived savings without achieving actual monetary or energy use savings, which may undermine the goals of these programmes.

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Fig. 1: Electricity use before and during the TOU trial.
Fig. 2: Correlations between perceived and actual savings.
Fig. 3: Mediating role of perceived savings.

Data availability

The processed or aggregated data that support the plots within this paper and other findings of this study are available from the corresponding author upon reasonable request.

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Acknowledgements

The authors would like to thank their utility partner for furnishing the data, D. Mazmanian for extensive advice and J. McPartlan for considerable time invested in data management.

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Both authors conceived the paper and designed the research and analysis methods. L.W. performed the analyses and wrote the initial draft of the paper. N.S. reviewed several drafts and made substantial revisions.

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Correspondence to Lee V. White.

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Supplementary Tables 1–10, Supplementary Figures 1–2, Supplementary Notes, Supplementary References

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White, L.V., Sintov, N.D. Inaccurate consumer perceptions of monetary savings in a demand-side response programme predict programme acceptance. Nat Energy 3, 1101–1108 (2018). https://doi.org/10.1038/s41560-018-0285-y

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