Nicolson, Moira Lindsey; (2018) Using behavioural science to increase consumer adoption of time-of-use electricity tariffs: evidence from survey and field experiments. Doctoral thesis (Ph.D), UCL (University College London).

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Abstract

A challenge for realising the benefits of smart meters, promoting energy security and decarbonising electricity is encouraging domestic consumers to switch from flat-rate electricity tariffs to a new generation of time of use (TOU) tariffs. However, a greater challenge is how to ensure that the right consumers sign up and that consent is informed: not all consumers will save money on a TOU tariff and evidence shows that a sizeable minority could be financially worse off. In a marked departure from the existing literature, this thesis argues that opt-out enrolment (a type of ‘nudge’) is unlikely to be a suitable method of recruiting consumers onto TOU tariffs, even though it could achieve almost universal enrolment. The first study shows that half of British energy consumers are unable to make informed choices about the cost-effective tariff for them, particularly those in low socio-economic grades. Consumers are therefore unlikely to opt-out of being switched onto a TOU tariff, even when unsuitable. Results from three further studies covering a collective sample size of 16,000 participants, show that tailoring the marketing of TOU tariffs towards electric vehicle (EV) owners could increase demand for TOUs amongst EV owners whilst reducing demand amongst non-EV owners, who pose less of a burden to the electricity network and are less likely to save money from switching. Unlike opt-out enrolment, tailored marketing is an ‘effective and selective’ nudge (Johnson, 2016). Unlike personalised defaults, tailored marketing can achieve informed consent. The results have implications for multiple ‘smart’ energy programmes, from signing up to TOU tariffs or direct load control contracts to participating in vehicle-to-grid services. In each case, a decision will need to be made about whether consumers will be left to opt-in or opt-out of such services, and to what extent it matters that consent is informed.

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