Households support cost-reflective pricing

April 6, 2016

Consumers are willing to pay more for peak electricity if off-peak tariffs are lowered, a survey by sustainable living organisation Renew has revealed.

The Consumer Tariffs Preferences Survey found many people supported in principle cost-reflective pricing, where distribution companies can set tariffs that more closely reflect their costs to supply energy to each consumer.

Designed well, cost-reflective pricing can provide incentives for energy efficiency and renewable energy in the home, encouraging people to make use of lower off-peak tariffs.

The survey was of 382 people across Australia. Most respondents were members of the ATA, who would be defined as engaged energy consumers and ‘early adopters’ of sustainable technology.

Key findings were:

  • 75% of respondents were confident or very confident that they could identify the appliance that uses the most electricity in any 30 minute period over a month
  • 84% were confident or very confident that they understood when their household’s electricity peaked
  • 70% were willing to experience fluctuating electricity prices over the year in order to achieve an annual benefit overall
  • 82% were unwilling or very unwilling to pay for the network expansion for other people’s air-conditioning use
  • 58% were willing or very willing to accept peak demand charges
  • 72% were more willing to consider optional critical peak pricing (than mandatory peak demand charging)
  • 87% were interested or very interested in taking up a demand response service, with nearly 80% willing to engage with another energy company (in addition to their retailer) to do this.

Renew, formerly known as the Alternative Technology Association, is Australia’s leading not-for-profit organisation promoting sustainable living.

Click here to read the Consumer Tariffs Preferences Survey.