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Gartner Says Energy Companies Need to do More to Educate Consumers on Energy Efficiency

By 2012, Two-Thirds of Utilities in Developed Countries Will Actively Provide Energy-Efficiency Programmes Aimed at Addressing Resource Adequacy and Energy Supply Security

(PresseBox) (Stamford,Conn., ) Utilities companies must do more to encourage beneficial consumer behaviour to achieve environmental and societal benefits, according to Gartner, Inc.

A recent survey, conducted by Gartner, found that consumers are generally interested and willing to participate in energy-efficiency programmes but are not fully aware of the programmes offered by their providers. The vast majority of survey respondents said that they are willing to participate in such energy-efficiency programmes if offered, although they are not willing to pay for more comprehensive information regarding their energy consumption as they consider it an entitlement.

Gartner surveyed more than 4,000 households in the US and the UK between December 2008 and January 2009, to probe their interest in conducting e-business with their utility providers and particularly their willingness and motivation to participate in energy-efficiency programmes offered by utilities.

"To meet increased pressure from policy makers who see energy efficiency as the key contributor to national energy independence and a means to mitigate the sector's impact on the environment, utilities must to do more to encourage consumers to take more of an interest in energy efficiency," said Zarko Sumic, vice president and distinguished analyst at Gartner. "Increased pressure for energy efficiency, from policymakers and consumers alike, has caught both regulators and utilities somewhat unprepared."

Mr Sumic said that the current regulatory framework and utility business model was put in place when the primary goal was to provide customers with ubiquitous, reliable and reasonably priced energy, but this now trails energy policies and consumer attitudes in many countries that are increasingly focused on energy sustainability and mitigation of the sector impact on environment.

A number of energy policy initiatives are now being introduced based on the premise that consumers have an interest in participating in energy-efficiency programmes. The expectation is that better consumer insight into energy usage will result in voluntary changes in consumption patterns, with consequently better utility asset use and overall consumption reduction, as well as the inherent consumer, societal and environmental benefits.

However, Gartner's survey found that in both the UK and the US, more than 50 per cent of consumers surveyed said they were unsure if their energy utilities offered energy-efficiency programmes. When asked explicitly whether they were interested in participating in such a program, 80 per cent of US consumers and 81 per cent of UK consumers stated that they would participate in energy programmes if offered by their utility providers.

"The first conclusion regarding energy efficiency programmes is that they are poorly marketed by utilities," said Mr Sumic. "The second finding is that in addition to not knowing how to market energy-efficient programmes, utilities may not even be that interested in them because the current regulatory framework and the basic cost-plus business model in a regulated utility market are not conducive to energy efficiency."

The third finding is that there are notable regional differences between the US and the UK when it comes to consumer awareness of energy-efficiency programmes. The survey found that UK consumers are less aware of energy-efficiency programmes than US consumers (68 per cent versus 55 per cent).

Gartner attributes such regional differences to two key factors. The first is the different emphasis on energy efficiency as an integral part of national energy policy in the UK versus the US. Despite a UK white paper on energy conservation and a number of European Community (EC) initiatives, the UK legislation is by no means as evolved as US energy policy. Secondly, the unbundled nature of the competitive energy retail market in the UK makes it harder to tag an entity (for example, a network company or competitive supplier) to be responsible for market energy-efficiency programmes because utility benefits are fragmented and retail entities that own consumer relationships are not interested in a potential utility asset-related benefits.

Additional information is available in the Gartner report "Utility Consumer Survey: Energy Efficiency, Do They Care and Why?" The report is on Gartner's website at http://www.gartner.com/....

Gartner UK Ltd

Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,000 associates, including 1,200 research analysts and consultants in 80 countries. For more information, visit www.gartner.com.