Powering up or facing resistance? How people understand the benefits of smart appliances

Powering up or facing resistance?  [ 4.9 mb]

Energy smart appliances are products that respond to price signals from the energy market and have the ability to change when or how much electricity they use. Being able to do this is important to enable more renewable generation and cope with new types of electricity demand, like heating or electric cars.

From a consumer point of view, the benefits of these technologies are complicated. They often depend on people’s homes or individual behaviour. For example, what other services they sign up to, how energy efficient the home is or what their energy habits are. Estimating value is tough for experts, nevermind individuals. At the same time, industry might ask consumers to make an upfront investment or sign up to a long term contract.

As the statutory consumer advocate in the energy market, we wanted to see how consumers understand the concepts that underpin this estimation. We also wanted to see if understanding could be improved.

In the short term:

• It is crucial that companies test and trial different ways to give people information about energy smart appliances and offers.

• Repeating and emphasising important messages, like those that help people make informed choices or relate to consumer rights, will improve people’s understanding. But information alone won’t be enough. Investing in good customer advice and support will be essential for dealing with queries and problems as this market develops.

In the medium term:

• Monitoring this emerging market can help ensure its success. Government, consumer bodies and industry should monitor and understand experiences of energy smart appliances and services, taking action to tackle any systemic problems.

• Regulations for energy smart appliances must include standards for communicating key information at the point of purchase

• People will want to know how well smart appliances and services might work for them and how much money they may make or save. It needs to feel easy to assess and interpret their own data.

In the long term, we recommend:

• Government, Ofgem, industry and consumer groups will need to understand which consumer demographics are engaging with smart home flexibility and how best we can support people who would like to engage but feel they can't.

• Consumers will need access to independent advice and redress, specifically related to  energy smart appliances and services to access this market.

We summarise the key findings and Citizens Advice’s policy recommendations in the short report. A longer research report [ 8.6 mb] by the Behavioural Insights Team has also been published alongside this.