2011 deloitte harris efficiency survey power point

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March 16, 2011

reSources 2011 Study

How resourceful businesses andconsumers are taking charge of energy



Copyright © 2011 Deloitte Development LLC and Harrison Group. All rights reserved.1

Introduction

Deloitte, with the assistance of strategy and market research firmthe Harrison Group, is conducting the reSources 2011 Study.

Seeks to identify and quantify changes in buyer attitudes andbehaviors to inform how to plan for the future during uncertaintimes




Qualitative:

� Consumer/Mid-Cap Business focus groups in Northern Virginia (2) andLos Angeles (2)

� Develop and refine hypotheses and language for quantitative survey

� 15-20 one-on-ones with policy makers, power companies, alternativeenergy companies, and enterprise size companies

Quantitative:

� Nationally projectable US survey

� Consumers: Online among n=3,200 primary or shared decisionmakers for utilities for the household completed February 2011

� Business: Online and phone recruit to online completion among400 business decision makers responsible for energy decisions or energy policy for their company. To be completed in March 2011

Methodology: Qualitative and Quantitative




NERC Regions

Electricity consumers have been grouped by the following NERC classifications for

regional analysis as appropriate




Monthly Bill for Electricity

Average Monthly Cost Peak Periods Off-Peak Periods

Less than $50

$50 - $99

$100 - $ 149

$150 - $199

$200 or more

Average $146 $182 $102

Q: On average, approximately how much is your monthly electric bill? Please consider your average bill over a 12 month period,including both "peak" months and "off-peak" months

Q: On average, approximately how much is your monthly electric bill during ³peak´ months when your electricity usage is higher andhow much is your monthly electricity bill during ³off-peak´ months when your electricity usage is lower?




Energy Use for Heating Home

How Home Heated

Electric/Forced Air (Net)

Electric

Forced hot air/heat pump

Natural gas

Oil burner

Propane

Other

$147

Q: How is your primary residence heated during colder months of the year?

Average MonthlyElectric Bill

$167

$123

$147



Let's Talk About Consumers




Almost Half of America Has

Felt the Pain of the Recession Directly

Data shown among the 92% of consumers who have made a change intheir shopping practices.

Had adirectloss of income

No incomereduction,

just feltshould be

cutting back

Someone in householdlost a job

Someone in householdhad a reduction in work

hours

Someone in householdhad a reduction in pay

rate

The Field

Reasons for cuttingback

Information on this slide comes from theDeloitte American Pantry Study




Americans are optimistic in their own resiliance

Base: Total Gen Pop; N=1,035

I am confident I will make it

through this recession:

82%





Birth of the Resourceful Shopper

I am looking at everyspending category to

see where we can save

87%

I have become a more

resourceful person

90%

Q: Please use the scale below to indicate how much you agree or disagree with the following statements.





44%I cannot believe how wasteful I used tobe in how I shopped

84%are looking closely at every spendingcategory to see where we can save

65%

79%

do not feel like they are sacrificingmuch

feel smarter about the way they shopversus two years ago

The Rules Go Beyond Behavior

The Rules





Resourceful Consumers Follow Precision Shopping

The Rules

84% have become a lot more precise in what they buy

xe ute a lan tay withinri e

ara eter De loy o etitive

leverage





ResourcefullnessExtends to Electricity

Consumption

We don't really worryabout doing things tokeep our electric bill

down

16%

I/Our family tookseveral e tra steps toreduce our electric bill

as a result of therecession

68%

Q: Please use the scale below to indicate how much you agree or disagree with thefollowing statements about your electric company and use of utilities.




No Plans to Go Back

Even as the economyimproves, I will remain

cautious and keep myspending at its current level

95% As the economy improves, Iwon¶t become more rela edabout my electricity usage*

85%

Q: Please use the scale below to indicate how much you agree or disagree with the following statements.

* Statement has been reversed. Original statement: As the economyimproves, I will likely become more rela ed about my electricity useand be less conservative to which 15% replied positively.



Perceptions of Electric Company




% Feel describes electric

companyTotal

Reliable 51

Consistent 34

E pensive 34

Efficient 28

Responsible 26

Cares about its customers 22

Informative 22Well managed 21

Trustworthy 20

Practical 19

Perceptions of Electric Company

% Feel describes electric

companyTotal

Resourceful 14

Considerate of sustainableenergy practices

14

Prepared for the future 13

Out of touch 12

Conservative 11

Limited 8

Non-Responsive 8

Frugal 3

Sophisticated 3

Constrained 3

Q: Which of the following describe your electric company?

Blue =positive perceptions

Red =negative perceptions




Uncertain About the Electric Company

Conservation Programs

Perceived ElectricCompany Desire*

To have your household conserveelectricity

To have your household use moreelectricity

Really not sure

Energy Saving TipsReceived By Electric

Company

Yes, several good tips

Yes, a few good tips

No, not really

Q: Which of the following statements best reflects what you believe your electric company wants?

* No differences by NERC Region




Average Monthly Electric Bill

Total Less than$100 $100-$150

More than$150

We feel very grateful to our electric company for theservice they provide

73 72 68

If you really think about it, electricity is pretty cheap

relative to what you get as a result64 56 47

Our electric bill is relatively small and not somethingwe worry about too much

47 29 18

Gratitude!

% Agree:

Q: Please use the scale below to indicate how much you agree or disagree with the following statements about your electriccompany and use of utilities.




«and Potential Lack of Trust and Disloyalty

My electricity provider hascharged me a lot more onmy bill than I used in a given

month

30%

Agree With Statement

Definitelywould

consider switching

Probablywould

consider switching

Might or mightnot consider

switching

Probably/Definitelywould notconsider switching

49 34 24 14

Q: Please use the scale below to indicate how much you agree or disagree with the following statements about your electric

company and use of utilities.




Average Monthly Electric Bill

TotalLess than

$100 $100-$150More than

$150

Rate increases 63 69 77

Lack of alternative energy sources 41 42 45

Aging infrastructure 41 40 41

Service to my home or business 35 39 43

Lack of national energy policy 36 33 35

Demand e ceeding capacity 31 34 38

Regulations 30 31 39

Slow response to storm outages 29 32 35

Lack of state energy policy 28 26 31

Management 23 24 29

Connecting to a broader energy grid 22 24 28

Quality of the employee base 19 21 22

Price really matters

% Extremely/Very Concerned:

Q: As you consider your electric company, how concerned are you about each of the following?

* No meaningful differences by NERC Region



The Communication Gap




Understand ElectricityResources

Yes

No

Not Sure

Sources Used

Natural gas

Coal

Oil

Hydroelectric

Nuclear

Wind

Solar

Geothermal

AgriculturalBiomass

Uninformed of the facts«but interested

Primary Secondary

50%

48%

42%

34%

33%

32%

26%

12%

9%

Source would likeelectric company

to invest in«

Q: Do you have an understanding of theresources your electricity companyuses to generate your electricity?

Q: Which do you believe or would e pect areprimary, secondary, or non- resources used byyour electric company to produce electricity?

Q: Which, if any, of these resources would youmost like to see your electric company invest into produce electricity keeping in mind that some

may be more of less viable in your part of the country?




Understand Electricity Resources

Total Gen Y Gen XBaby

BoomersMatures

Yes 24 32 42 52

No 50 40 30 19

Not Sure 26 28 28 29

Young & Less Informed about Electricity

Resources

Q: Do you have an understanding of the resources your electricity company uses to generate your electricity?




Hmmm, Seems like a good idea

Total*

E tremely/Very Important (Net)

E tremely important

Very important

Somewhat important

Not very important

Not at all important

* No meaningful differences by NERC Region

Importance of ElectricityComing from Alternative or RenewableResources




ElectricCompanyOffered Opportunity to

Buy Green Energy

Yes

No

Not Sure

Green Energy, Huh?

Reasons have notparticipated

Not Aware

Too e pensive

No way to separategreen energy to myhouse

Current sourcesperfectly acceptable

Didn¶t want to subsidizethose unwilling to pay

Not sure how to

sign up

Prefer to support our local sourcesof energy

Some other reason notlisted here

Participation in GreenEnergy Program

Yes,

currently

No,previously

No

Q: Has your electric company offered youopportunities to buy ³green´ energy whichis typically offered at a premium to your current rate?

Q: Have you participated in green energy programs like these?

Q: Why haven¶t you participated in these green programs?




Deregulation, Huh?

Yes, by utility companiesother than my primaryelectricity provider

Yes, by other small newaggregators

No

Not Sure If yes«

No

Yes

Live in Deregulated MarketHave You Been Solicited ByCompanies Other ThanPrimary Electricity Provider

Q: Do you live in a deregulated market where more than oneelectric company competes for your business?

Q: Have you ever been solicited by companies other than your primary electricity provider in your area to buy electricity?




Alternate Providers, Huh?

No

Alternative Energy Provider Purchase Funnel

Live in deregulated

Market

Have been approachedby alternate providers

Have purchased fromalternate providers

(71% of people in aderegulated market)

(29% of people who wereapproached by alternateprovider)

Evaluation of AlternateEnergy Provider

(among 3% who have purchased from alternateprovider)

Much better than theprimary electricity provider

A little better than theprimary electricity provider

No better or worse

A little worse than the

primary electricity provider

Much worse than theprimary electricity provider

Q: Do you live in a deregulated market where more than oneelectric company competes for your business?

Q: How good has this new alternative turned out to be relativeto the primary electricity supplier in your area?

Q: Have you ever been solici ted by companies other than your

primary electricity provider in your area to buy electricity?

Q: Did you buy your electricity through the alternative provider?




But who are the real contenders?

TotalAlternative energy providers

(solar, wind, hydroelectric, etc.)

New providers who are

aggregators of demand

Mass merchant stores likeWalmart, Target, K-mart, etc.

Club stores like Costco, Sam's,BJ's, etc.

Internet providers like Google,

Yahoo, Amazon, etc.

Some other entity

None of these

% Selected provider as good

option for getting electricity:

Q: Which of the following providers would you view as good options for you to get your electricity?



Getting Resourceful




How Easy to Reduce Electric Bill in a

Meaningful Way

Total

E tremely/Very difficult (Net)

E tremely difficult

Very difficult

Somewhat difficult

Not very difficult

Not at all difficult

Q: How easy or difficult do you think it would be for you to reduce your electric bill in a meaningful way relative to your current bill?




Interest in Home Energy Usage Assessment

Our family took several extra steps to reduce our electric bill as a result of the recession

Total Agree Disagree

Definitely/Probably would beinterested (Net)

44 31

Definitely would be interested 21 11

Probably would be interested 23 20

Might or might not be interested 32 37

Probably would not be interested 13 18

Definitely would not be interested 11 14

Q: How interested would you be to have a representative from your electriccompany come to your home and provide an energy assessment of ways to reduce electricity use?




Ideas that matter

Development of alternative energy in the US can create many jobshere while reducing dependence of foreign oil 69%

Using alternative energy reduces the risk of another Gulf of Me ico oil

spill by decreasing the need for off shore drilling

50%

Alternative energy will be an important aspect of future economichealth and America needs to invest to win for jobs and national security

59%

% Extremely/Very Motivating to

Change Current Energy Practices

-- Alternative Energy

Conventional forms of energy like oil and coal are creating globalto icities and global warming we need to avoid through use of

alternative energies

44%

Q: Listed below are a set of hypothetical statements. How motivating do you find each statement to make you want to change from your current energy practices?




Ideas that matter

Smart meters allow you to manage your energy consumption around when electric power ratesare lower 54%

Businesses are getting smarter and cutting their electric power bills by 10% on average. Thesewinning practices are now available for your home 53%

There is lots of wasted energy in the S. ou can be part of a national program to reduce

energy consumption by 10-1 % in the next - years 53%

lectric power companies will have a trained professional come to your home to test where youcan save the most power/energy 47%

Applications are now available to run on computers or smartphones that reveal the mostefficient means to use electricity in your home without impacting your lifestyle 44%

ou can save 1 % on your annual electric power bill by being willing to be one of thehouseholds in the community who can be 'powered off' for no more than 10 hours -4 times per

year during times of severe electricity storage32%


Change Current Energy Practices-- Money Saving Options





Ideas that matter...and don¶t

Get ta credits for investing in solutions to reduce your electric bill like better insulation, moreefficient light bulbs, light sensors, or smart home technology 61%

Your electric company is adding a small surcharge to your bill to invest directly in alternativeenergy solutions and jobs in your area 24%

Now you can get instant rebates on new more efficient light bulbs from your electric power company 59%


Change Current Energy Practices

-- Financial Incentives




Ideas They'll Pay For




Supportive of Surcharge to Raise Capital for

Investment in Alternative/Renewable Sources

I would like you to assume for a moment that your electric company would like to launch a campaign to raisecapital for investment in alternative energy sources that would be best suited to your region. I am going to

show you a set of costs that could be associated with this effort. For each one, please tell me how likely youwould be to support this initiative to reduce dependency on foreign oil, reduce pollution, and add localAmerican jobs? These increases would be required of the entire customer population. ± OR ±Participation on your part is voluntary.

Q: If your average monthly bill were to increase by ($ ) to accomplish this effort, how likely would you be to support it?

Definitely/probably would support andparticipate (Net)

Required of EntireCustomer Population

Participation isVoluntary

2% surcharge

4% surcharge

6% surcharge

8% surcharge

10% surcharge

12% surcharge

14% surcharge




More Difficult: Smart Energy Applications

Likelihood to PurchaseConcept ±

Definitely/ProbablySmart energy systems give homeowners the control and informationthey need to become more environmentally aware, reduce their carbonfootprint and save money. From simply turning down the heat or air conditioning when away from home to full home automation solutions,smart energy applications offer homeowners a variety of conveniencesthat make homes both µgreener¶ and less expensive to maintain.

yMonitor your household¶s power use and control appliances anddevices remotely from your computer or smartphone

yEasy to install sensors and switches enable you to control appliances,lighting, programmable thermostats, home security, electric vehiclecharging stations and more

yHistorical and projected usage, costs and savings are calculated anddisplayed in easy to visualize graphs

yIdentify the top electricity consumers of your home so that you cancontrol the appliances and devices that will maximize your savings

yBasic smart energy systems start at $250 (including Wi-Fi enabledthermostat and 2 additional sensors/switches)

Likelihood to pay a smallamount for a

meter/timer control system ±Definitely/Probably

Q: How likely would you be to pay a small amount to have a meter and control (or timer) system for atleast some of your major household devices that use electricity, to better manage their use and cost?

Q: Please read the description below and then indicate how likely you would be to purchase suchan application for your household?




Total Gen Y Gen XBaby

Boomers Matures

Likelihood to Purchase Smart EnergyApplication ± Definitely/Probably

28 19 16 13

Likelihood to pay a small amount for ameter/timer control system ±Definitely/Probably

33 27 22 16

Interest in Smart Home Energy Technology

Skews Younger

Q: Please read the description below and then indicate how likely you would be to purchase suchan application for your household?

Q: How likely would you be to pay a small amount to have a meter and control (or timer) system for at

least some of your major household devices that use electricity, to better manage their use and cost?



A Few Observations




Closing Thoughts: Consumers

� Does Pocket-Book trump Trial and E perimentation?

� Does Self-Interest Trump Public Interest?

� Does Suspicion Trump Confidence (Trust)?

� Does Inconvenience Trump Cooperation?




Closing Thoughts for Consumers

Observations: Will It Take a Major Event?

�Under-informed

�Under-aware




Closing Thoughts: Consumers

«Or Can We Take Control:

�Has the Recession Has Changed the Value Equation.

�In the End Innovation in Energy Management Will Be aProduct of Our Ability to Persuade Consumers That

There is Profit in Changing the Way Energy IsConsumed«Saving is Passive; Investing is Active!




Thank You.To learn more about this study please contact:

[email protected]

Or

[email protected]

2011 deloitte harris efficiency survey power point

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