Energy Trends

Highlights on consumer energy usage

October 2009
Energy Trends
Highlights on consumer energy usage

Introduction
Rising energy costs, fears about the declining
condition of the environment and the onset
of new “green” initiatives will drive change
in the way people use and conserve energy.
Consumers now have more energy choices
but they also have more questions as to
which options are best for them. Although
many consumers have adopted more
environmentally-friendly habits, others
have not acted as quickly to embrace
these measures.
To track changes in the energy sector and
its impact on consumer behavior, the
Nielsen Energy Audit was administered,
Green Energy Program Participation by Region*
which is an annual survey of more than
32,000 respondents conducted online.
This report highlights some of the survey’s
more notable emerging trends for 2009.
Green energy programs
Renewable energy has been the buzz
recently and demands are growing in the
U.S. to supplement our current energy
supply with cleaner, “greener” sources of infancy of administering them. Three percent
energy. As a result, utilities are offering of households in the U.S. participate in such
green pricing programs to their residential programs and there are distinctive differences
customers. Some states, such as California, from region to region, the distribution by
have had these programs in effect for many region can be seen below. Not surprising,
years, while other states are still in their the highest concentration of participants
is in the Pacific region.

Pacific
West
Mountain North New
Central East England
24% North
9% Central 4%
6%
Middle
10% Atlantic
15%

14%
3% South
Atlantic

15% East
South
West Central
South
Central
*This distribution represents 3% of U.S. households participating in green energy programs.

Page 2 © 2009 The Nielsen Company. All rights reserved

 E n e r g y Tr e n d s

The survey shows that green pricing program Green Energy Program Participation Energy efficiency
participation is greatest among higher educated There are a variety of motivations for a
Household Income
households who earn an income of $50K or consumer to conserve energy. When targeting
40%
more. Due to the fact that installation is consumers to conserve energy, companies
not necessary, we find that there is no 35% 34% usually ask themselves “who are the ‘green’
distinctive difference between homeowners 30% households?” While “green” households
30%
and renters as a predictive demographic. 28% remain a good target for energy efficiency
However, in terms of political affiliation, 25% programs, 80% of households claim their
liberal and moderate households make up primary motivation for conserving energy
20%
a majority of the green pricing program is to “cut energy costs and save money”.
participants. 15%
Energy efficiency programs have a high market
Preference for Renewable and 10%
8% potential because cost savings seems to be
Carbon Neutral Sources
5% the primary motivator for conserving energy.
40% Tailoring separate messages for “green”
37% 0
Under $50K- Over Prefer not and “save money” audiences will result
35% $50K $100K $100K to say
32%
in a greater penetration of Demand Side
Management (DSM) programs.
30%
Age Primary Motivation for Conservation
25%
40% 80%
40% 39% 80%
20%
35%
16% 70%
15%
30%
60%
10% 25%

6% 20% 50%
5% 20%
5% 4% less
than
1% 15% 40%
0
Solar No Wind Nuclear Geo- Hydro- Other 10%
Power Pref. thermal electric 30%
5%
20%
Renewable energy can be produced by many 0
18-34 35-54 55+ 10% 9% 9%
different resources and each consumer has
2%
their own personal preference. When we 1%
0
questioned households about their primary Cut costs Fight Save the To feel Set example
Political Affiliation and save global earth better for others
preference for green energy sources, solar money warming
energy emerged as the leading preference 40%
with 37% of all survey respondents and 35% Government programs are doing their part
35%
wind power coming in second at 16%. to financially incentivize consumers to
31%
30% make energy efficient improvements in
their homes with the Energy Star Program
25% that offers a tax credit of up to $1,500 for
22%
20%
households that purchase energy efficient
products. Eight percent of households have
15% taken advantage of this incentive and
12%
another 21% of households claim they plan
10%
on taking advantage of the incentive prior
5% to its expiration on December 31, 2010.
This is great news for utilities as well as
0
Liberal Moderate Conservative Other home improvement centers such as Home
Depot® and Lowes®.
Page 3 © 2009 The Nielsen Company. All rights reserved
 E n e r g y Tr e n d s

Smart grids holds feel they have zero to little control PHEV Purchase Consideration
Do you know what a smart grid is and how over their energy costs and 67% would be 60% 58%
households can benefit from using them? interested in the ability to manage their
If your answer is “No”, you are not alone. consumption online.
50%

A smart grid delivers electricity from suppliers Plug-in hybrids

to consumers using digital technology to save
energy, reduce cost and increase reliability
and transparency. While 20% of respondents
have heard about smart grids, 97% claim
that there has been no communication
from their local utility that illustrates the
benefits of this emerging technology. This
may be because much of the cost savings
from smart grids doesn’t necessarily
Rolling into dealerships in about a year, the 40%
introduction of the Plug-in Hybrids/Electric
Vehicle (PHEV) will jump-start what seems 30%
to be the long process of flipping the U.S. 24%
dependency on oil and bringing the fuel for 20%
our vehicles stateside. However, before the 15%
launch of the PHEVs, auto manufacturers
10%
and utilities have a lot to consider.
3%

require involvement from the consumers. Auto manufacturers are seeking the
answers to many questions such as:
That said, this new technology will offer • What’s the market for this type of vehicle?
different pricing opportunities and the ability • What should the body style (interior
to manage energy consumption online. This and exterior) look like?
is very important given that 41% of house- • Is the battery range sufficient?
Knowledge and Interest in Smart Grids Utilities are exploring answers to other
questions such as:
No Neutral Yes • What is the market for the PHEV in our
100% 20% 3% 59% 67% service territory?
97%
• Where and when do people plan on
charging these vehicles?
80% • How will this impact our electricity load?
80%
Nielsen posed a question in the latest Energy
Audit survey to help gauge the thoughts
60%
and consideration around the adoption of
the PHEV. Three percent of households
plan on buying a PHEV as soon as they are
40% 41% available. An additional 25% said that they
will wait until the technology is proven and
24%
becomes more mainstream before purchasing.
Accurately estimating the energy demands
20%
posed by these new vehicles will have a
significant impact to utility companies.
9%
0 Conclusion
Heard Local utility Feel in Interested in The current momentum surrounding green
about shared control managing
smart benefits of over home consumption initiatives and reduced energy consumption
grids smart grids energy costs online
has presented utilities and home improvement
companies with a golden opportunity.
0
Wait until Wait until Will keep Will
my vehicle technology buying gas purchase
needs to be is proven cars until when
replaced unavaible available
Leveraging the public’s interest in green
energy and conservation will offer a venue
for energy companies to advance their
programs. However, educating the public
on their options and which are best for
them poses a major hurdle.
As we have seen with the results found in
this report, consumers are willing to adopt
a greener lifestyle, especially if it helps
them save money. But the industry must
work to move consumers from being rela-
tively passive energy users to active partici-
pants, managing and monitoring their own
consumption. This change in behavior will
take time and will only be possible with
effective marketing programs designed to
educate the consumer on the benefits.
While saving the environment will motivate
people to transition to more energy efficient
products and services, cost savings will be
the key message that will make them take
notice. Marketing dollars, promotion and a
heightened emphasis on customer service
will be needed to guide the public and give
them the answers they seek as we all move
cautiously into a new era of energy.

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© 2009 The Nielsen Company. All rights reserved.