(August 2011) Economic consultant Michael Rosenzweig challenges Constantine Gonatas’s proposal for ensuring FERC’s demand response rulemaking achieves its objectives. Also, Juliet Shavit...
Lighting the Way
Understanding the smart energy consumer in a down economy.
surveyed, the high level of “don’t know” responses in part reflects doubts in some countries about the veracity of green-power claims. Still, if to a larger extent these customers truly cannot answer that question, this could indicate a valuable opportunity to improve communication with customers in countries with significant renewable resources and high participation levels.
The impact of the global economic downturn of 2008 clearly is competing with the environmental concerns of consumers. Across the core-group countries, the number of consumers paying a premium for green products and services is down 20 to 30 percent (see Figure 3) . This change in spending patterns also seems to influence perceptions of green-power options among consumers from core group countries who don’t have (or are unsure if they have) green-power options. The percentage of these respondents who say they want green-power options is down slightly, from 85 percent in 2007 to 78 percent in 2008. But during that one-year period, the percentage of those willing to pay an additional 20 percent or more monthly dropped by nearly two-thirds, from 16 percent to just 6 percent (see Figure 4).
The percentage of those with green-power options who actually buy them remained about the same, however. This isn’t surprising, given contractual commitments, significantly higher prices for non-renewable fuels in the past year (which eliminated some of the cost differential between standard and green power), and the overall commitment to the environment expected of buyers of green power.
Still, prudence in launching new green programs may be wise until the global economy is in recovery. Extended recessionary conditions or further deterioration in consumers’ incomes might suppress acceptance of higher-cost programs until conditions improve.