Monday, April 22, 2013

Busting Five Myths About the Consumer

By Patty Durand, executive director, SGCC

A myth, according to Merriam-Webster, is variously “a popular belief or tradition that has grown up around something or someone,” “an unfounded or false notion” and/or “a person or thing having only an imaginary or unverifiable existence.”

Obviously, the consumer is not a myth – we’re all living proof. But, for some reason, how the consumer perceives, thinks and acts in a given circumstance – such as considering the smart grid – has acquired mythic qualities.

One of the core missions of the Smart Grid Consumer Collaborative, of course, is to use bona fide research to understand how and why consumers actually think and act as they do. Over the past three years we’ve developed a lot of insights into consumer perceptions, motivations and behaviors and, thus, we’re in a position to bust the most common myths about the consumer.

Here are a few consumer myths, in no particular order, that are often repeated without supporting evidence. I’ve tried these out on conference audiences to gauge the reaction and see how deeply embedded these myths have become. The answer: very. That’s unfortunate.

Myth # 1: Consumers have all heard about “smart meters” and “smart grid” and they don’t like what they hear. The industry should drop those terms.

Busted! SGCC research shows that about half the American public has not heard those terms and have not made associated value judgments. Another 25% have heard of the terms but don’t know what they mean. Of the remaining 25% who say they have a basic or complete understanding, the vast majority like what they hear and support smart grid technology investments.

Myth # 2: Consumers aren’t interested in time-of-use (TOU) rates. They only want flat rates.

Busted! SGCC research clearly establishes significant consumer interest in dynamic rates such as TOU. Consumers who’ve participated in TOU pilots report a high rate of satisfaction with their experience.

Myth # 3:  Consumers don’t care about their energy consumption and management. The power industry should confine itself to distribution automation – i.e., grid modernization work that’s invisible to the consumer.

Busted! Our research shows the vast majority of consumers are interested in where their energy comes from, how it’s transmitted, used and managed, and want to know more.

Myth # 4: Consumers only care about grid modernization if it saves them money.

Busted! The surprising truth, revealed by SGCC research: the top reason consumers are interested in smart grid is its ability to integrate renewable energy. The second reason for smart grid interest is a more traditional concern: it facilitates fewer outages and faster restoration when outages occur.

Myth # 5: Consumers who have heard of “smart grid” have a mostly unfavorable view.

Busted! Actually the majority of consumers familiar with the term “smart grid” holds a favorable view. And research shows that consumer favorability grows when good information is presented on the intended benefits of grid modernization.

An often repeated myth is that consumers only spend five minutes a year thinking about electricity. This myth is used to foster the belief that utilities should do nothing to engage consumers because consumers just don’t care about electricity. That myth is a distortion of an Accenture study – the actual study said that consumers spend only five minutes a year interacting with their electric utility bill.  That is an unfortunate distortion of the truth of that Accenture study. People do care about energy and electricity regardless of how much time they spend thinking about their utility bill (which is usually difficult to read).

The source for all of these myths is SGCC’s Smart Grid Consumer Pulse & Segmentation Study. This study is a quantitative survey of over 4000 U.S. residential consumers and has a 95% confidence interval. I encourage you to go to our website and review it: (Simone insert link to Pulse 3 summary here).

We often love to pontificate on what we think we know. But let’s agree to spend equal time on the actual facts as revealed by careful studies. Next time you hear someone making pat statements about consumer behavior and the smart grid, ask politely for a source that supports it. It’s time to separate what we think we know from what we can say with authority because it is the result of bona fide research.

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