energy efficiency symposium€¦ · household appliances (refrigerators and washing-machines) focus...

Dr. Ibon Galarraga, BC3

Energy Efficiency Symposium

Consumer attitudes to energy efficiency

in the appliances market

Brussels, 6 June 2019

About CONSEED Objectives and Approaches

We aim to better understand how consumers make energy efficiency decisions:

• Do they use energy efficiency labels?

• What information are they looking for?

• What is the impact of financial information and others factors on the purchasing decision?

Appliances case studies:

• Spain and Greece.

• Refrigerators, washing machines, dishwashers.

Methods

• focus groups, household survey, discrete choice experiments,

field trials.

Trinity College of Dublin

Basque Centre for Climate Change

CICERO

Agricultural University of Athens

University of Ljubljana

FG and IdIs

Qualitative research: FG and IdIs – Case studies

SECTOR / product Method Target When & Where

HouseholdAppliances (refrigerators and washing-machines)

Focus Group (FG)

(8 participants)Typical households

May 31, 2017

Bilbao (Spain)

Services- lodgingsAppliances (including heating and cooling)

In depth Interview (IDI)

(8 face-to-face IDIs)Lodging owners

June 21-July 5, 2017, Spain

Qualitative research: FG and IdIs – Key attributes

Qualitative research: FG and IdIs

Buying or not buying an energy efficient good across sectors: results of a role-play game and IdIs

Households Lodging owners Private services

companies

Appliances Appliances

Heating & Cooling

Vehiclesa

PROS

Reduced energy cost Ѵ Ѵ Ѵ Ѵ

Co-benefits (environment, health, job)

Ѵ Ѵ Ѵ

Public image Ѵ Ѵ

CONS

High purchasing cost Ѵ Ѵ Ѵ

Uncertainty:

Energy price Ѵ Ѵ Ѵ Ѵ

Useful life Ѵ

End user’s behaviour Ѵ Ѵ Ѵ

Lack of trust Ѵ Ѵ Ѵ

Technical aspects Ѵ

Maintenance cost Ѵ

Autonomy Ѵ

Reduced supply Ѵ

Lack of experience Ѵ a Include electric or hybrid vehicles and fossil-fuel


Attitudes towards EE labels


Potential improvements of EE labels

Households-Appliances (FG) Lodging owners-Appliances (IDIs)

Suggestion Texts to explain the symbols and letters in the colour scale of the label

Including monetary information (energy consumption

in monetary units – energy cost)?

• More understandable

• Useful to calculate running costs

• Concerns:

- Energy price

- User's behaviour

- Lifetime considered

See specific table


EE and EE labels: Household sector


EE and EE labels: Services sector


Discussion

• EE is still a fuzzy concept.

• The information displayed in labels limits consumers’ ability to make an informed decision.

• Consumers claim a label that fully inform them on the intertemporal arbitrage between

purchasing and running costs with understandable units.

• Other informational issues were found regarding the adoption of new technologies: buyers

are bounded by a split incentives issue and by their loss aversion.

• Further research:

o Effectiveness of alternative energy efficiency labelling scheme.

o Instruments for addressing the split incentives problem and the loss aversion to goods

whose technology has large uncertainty.

Consumer Survey

On the importance of energy efficiency and other attributes

Refrigerator in GreeceWashing machine in Spain

0% 20% 40% 60% 80% 100%

Price

Energy efficiency

Loading capacity

Water consumption

Services&Options

Brand

Size

Aesthetic

Very Fairly Not very Not at allImportance scale:

0% 20% 40% 60% 80% 100%

Price

Fresh food capacity

Frozen food capacity

Energy consumption

Energy class

Design

Brand

Warranty

After sales

Operating cost

Very Fairly Not very Not at allImportance scale:

• EE among top two factors, more than 70% rate it as very important.

• Household surveys appliances in Spain (500 respondents) and

Greece (496 respondents).

On the role of energy label for appliances


9%

28%

91%

72%

0% 20% 40% 60% 80% 100%

Awareness

Influence

No Yes

47%

31%

11% 1% 11%0%

10%

20%

30%

40%

50%

60%

A+++ A++ A+ A Don´tknown

34%

18%

66%

82%

0% 20% 40% 60% 80% 100%

Awareness

Influence

No Yes

16%

38%

24% 7%

3% 12%

0%

10%

20%

30%

40%

50%

A+++ A++ A+ A Less thanA

Don´tknown

Large majority aware of

existing label, and believe

it influences.

There exists

disparities among

product/countries.

Attitudes towards energy efficiency


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Reduce my environmental impact

EE does not vary

More EE goods are less reliable

Willing to take a chance on new technologies

Loans access limits my purchases

Understand energy consumption

Aware of the electricity price

Understand money saved

I would buy if my peers do so

Cannot afford to upgrade

No attention to the electricity bill

Time constraint to find EE goods

Strongly agree Slightly agree Disagree Strongly disagree

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Reduces my environmental impact

EE does not vary

More EE goods are less reliable

Willing to take a chance on new technologies

Loans acceess limits my purchases

Understand energy consumption

Aware of the energy price

Understand money saved

I would buy if my peers do so

Cannot afford to upgrade

Strongly agree Slightly agree Disagree Strongly disagree

Households

are willing to take a change on new technologies to reduce their environmental impact

But,

they are missing information to invest in energy efficiency (Spain)

€ they face capital limitations (Greece)

Results confirmed by a Probit analysis

On the display of monetary information


0 0.5 1 1.5 2 2.5 3 3.5

Understandable

Trustworthy

Manipulated

Influence the purchase decision

Helps to understand energy cons.

Helps to calculate running costs

Current Monetary

Strongly disagree Strongly agree

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

More understandable

More trustworthy

Equally manipulated by sellers

Would affect more my choice

Helps more to understand energy cons.

Helps more to calculate energy cost

Strongly disagree Strongly agree

• Monetary info makes labels more understandable, and helps understand running costs.

• Trust in label is questioned.

Field Trial


A field trial with small retailers in Spain

•Motivation: Promote the purchase of energy efficient appliances.

•Objective: Test the effectiveness of presenting a monetary lifetime oriented label with energy savings

information.

•Design:

•Appliances: Washing machines, Fridges, Dishwashers

•When: 6 month experiment (Start: February 2018, End: July 2018)

•Where: Small stores in the Basque Country, Cantabria, Comunidad Foral de Navarra and Aragón in Spain.

•What information: Savings information of the energy consumption during the lifetime of the products (Lifetime:

10 years; Electricity Price (𝑝𝑒𝑙𝑒𝑐): 0,182 €/kWh)



Proposed monetary Energy Efficiency label



• Probit model:

• Preliminary results (Work in progress):

𝑃 𝑦 = 1 𝑋)= 𝛽1 + 𝛽2𝑇𝑟𝑒𝑎𝑡𝑚𝑒𝑛𝑡1 + 𝛽3𝑇𝑟𝑒𝑎𝑡𝑚𝑒𝑛𝑡2

+ 𝛽4𝑇𝑟𝑒𝑎𝑡𝑚𝑒𝑛𝑡3 + 𝛽5𝐴𝑡𝑡𝑟𝑖𝑏𝑢𝑡𝑒𝑠 + 𝛽6𝑃𝑟𝑖𝑐𝑒

+ 𝛽6𝑆𝑜𝑐𝑖𝑜 𝑒𝑐𝑜𝑛𝑜𝑚𝑖𝑐 𝑣𝑎𝑟𝑖𝑎𝑏𝑙𝑒𝑠 + 𝑒

Washing machines Fridges Dishwashers

Marginal

effect

Marginal

effect

Marginal

effect

Treatments Treatments Treatments

Control ---Ref--- Control ---Ref--- Control ---Ref---

Treatment 1 (=1 if the

sale is under treatment

1)

0.0072

(0.0095)



1)

0.0406*

(0.0246)



1)

0.0273

(0.1211)



2)

-0.0094

(0.0078)



2)

0.0429*

(0.0234)



2)

-0.0063

(0.1094)



3)

-0.0086

(0.0078)



3)

0.0461**

(0.0235)



3)

-0.1032

(0.1045)

Attributes Attributes Attributes

Capacity (kg) 0.0417***

(0.0079)

Height (mm) -3.93e-06

(9.32e-06)

Size (=1 if the size is

600mm)

0.4940**

(0.2523)

Type of embedding (=1

if free installation)

0.0548***

(0.011)

Type of embedding (=1

if free installation)

0.0161

(0.0513)

Number of services

0.1643***

(0.0611)

Water consumption (L) -0.0001***

(6.26e-06)

Capacity- Volume of

the fridge (L)

0.0021***

(0.0003)

Water consumption (L) -0.0019***

(0.0002)

Price 0.0001*

(0.0001)

Capacity- Volume of

the freezer (L)

0.0004

(0.0009)

Price 0.0006*

(0.0003)

Price 0.0002***

(0.0001)

Socio-economic

factors

Socio-economic

factors

Socio-economic

factors

Gender (=1 if the

consumer is a woman)

-0.0015

(0.0058)

Gender (=1 if the


-0.0040

(0.0167)

Gender (=1 if the


-0.1280

(0.0819)

Less than 30 years

(=1 if the consumer is

less than 30 years old)

-0.0055

(0.0225)

Less than 30 years



0.0359

(0.0630)

Less than 30 years



0.1417

(0.3952)

Between 30 years and

45 (=1 if the consumer

is between 30 and 45

years old)

-0.0092

(0.0078)




years old)

0.0089

(0.0226)




years old)

0.0314

(0.1026)

Between 45 and 60

years (=1 if the

consumer is between 45

and 60 years old)

-0.0032

(0.0068)

Between 45 and 60

years (=1 if the

consumer is between

45 and 60 years old)

0.0253

(0.0202)

Between 45 and 60

years (=1 if the

consumer is between 45

and 60 years old)

0.2320*

(0.0959)

Income 1.80e-

06***

(6.81e-07)

Income -4.65e-07

(1.96e-06)

Income -6.39e-06

(9.06e-06)

Number of observations 1403 Number of

observations

848 Number of observations 432

LR chi2(12) 185.12 LR chi2(13) 243.25 LR chi2(12) 412.04

Prob > chi2 0.0000 Prob > chi2 0.0000 Prob > chi2 0.0000

Pseudo R2 0.2963 Pseudo R2 0.3518 Pseudo R2 0.7014

Notes: ***, ** and * indicate significance at 1%, 5% and 10% level. Standard deviation under parentheses.



• Conclusions (Work in progress):

• Washing machines and dishwashers: No effects were found.

•A tentative explanation: day to day use of washing machines very much determines the actual

consumption of the appliance, consumers give little importance to energy savings when purchasing

the dishwasher. Therefore for purchasing decision makes NO difference!

•Fridge: The three treatments increase the probability of buying an energy efficient appliance (A+++)

•A tentative explanation: fridges are usually connected 24/7, and likely at fixed temperature

requirement. Therefore purchasing decision makes a difference!


A field trial with El Corte Inglés in Spain (Work in progress)

•Motivation: Promote the purchase of energy efficient appliances

•Objective: Test the effectiveness of presenting a monetary lifetime oriented label with energy cost

information.

•Design:

•Appliances: Washing machines, Fridges, Dishwashers and Tumble-driers

•When: 4 month experiment (Start: 15th August 2018, End: 24th December 2018)

•Where: El Corte Inglés stores in Spain (29 stores participate in the field trial)

•What information: Cost information of the energy consumption during the lifetime of the products (Lifetime: 10

years; Electricity Price (𝑝𝑒𝑙𝑒𝑐): 0,182 €/kWh)

Treatment (N=10) Treatment description Treatment period Control group (N=19) Control description

Treatment 1 Training of the sales staff15th August 2018 – 31st

October 2018Control

The control group is a group of stores with no

interventionsTreatment 2Energy cost information + Training of the sales staff

1st November 2018 – 24th December 2018

Choice experiments


A DCE with consumers in Greece

•Motivation: Promote the purchase of energy efficient appliances.

•Objective: Test the effectiveness of including monetary information on the energy label besides annual

energy consumption.

•Design:

•Appliances: Refrigerators

•When: December 2017

•Target group: adult Greek population

•Sample: 992 questionnaires completed via CAWI (computer-assisted web interviewing). Response rate: 48%.

•What information: Annual cost of the energy consumption of the refrigerator (Electricity Price (𝑝𝑒𝑙𝑒𝑐): 0.14

€/kWh)


Attributes and levels of the DCE

Proposed monetary Energy Efficiency label

Price (Euros) Energy class Energy

consumption

(kWh/year)

Fresh food

compartment

capacity (lt)

Frozen food

compartment

capacity (lt)

400 A+ 165 Low

(220-235lt)

Low

(86-89lt)

450 A++ 240 Medium

(237-255lt)

High

(92-98lt)

500 A+++ 315 High (265-280lt)

550

600

650

Experimental design

Non-labeled experiment

Non-monetary information

(Treatment 2)

Monetary information

(Treament 3)

Labeled experiment


(Control sample)


(Treatment 1)

Respondents were randomly assigned to one of four experimental conditions:

• labeled experiment without additional information on the estimated cost of energy (control sample)

• labeled experiment with additional information on the estimated cost of energy (treatment 1)

• non-labeled experiment without additional information on the estimated cost of energy (treatment 2), and

• non-labeled experiment with additional information on the estimated cost of energy (treatment 3).

Annual cost: €23.1

Annual cost: €33.6Annual cost:

€44.1


Analysis of data

• Conditional logit (CL) model:

• Marginal WTP for energy efficiency

improvements with respect to monetary

information, label information and gender:

A choice pair from treatment group 2

𝑉𝑖𝑘 = 𝛽0. 𝐴𝑆𝐶 + 𝛽1. 𝐸𝑛𝑒𝑟𝑔𝑦_𝑐𝑙𝑎𝑠𝑠2 + 𝛽2. 𝐸𝑛𝑒𝑟𝑔𝑦_𝑐𝑙𝑎𝑠𝑠3 + 𝛽3. 𝐹𝑟𝑒𝑠ℎ_𝑓𝑜𝑜𝑑_𝑐𝑎𝑝𝑎𝑐𝑖𝑡𝑦2+ 𝛽4. 𝐹𝑟𝑒𝑠ℎ_𝑓𝑜𝑜𝑑_𝑐𝑎𝑝𝑎𝑐𝑖𝑡𝑦2 + 𝛽5. 𝐹𝑟𝑜𝑧𝑒𝑛_𝑓𝑜𝑜𝑑_𝑐𝑎𝑝𝑎𝑐𝑖𝑡𝑦 + 𝛽6. 𝐶𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 + 𝛽7. 𝑃𝑟𝑖𝑐𝑒+ 𝛽8. 𝐶𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 × 𝐶𝑜𝑠𝑡_𝑖𝑛𝑓𝑜 + 𝛽9. 𝐶𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 × 𝐿𝑎𝑏𝑒𝑙_𝑖𝑛𝑓𝑜 + 𝛽10. 𝐶𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 × 𝑀𝑎𝑙𝑒

𝑀𝑊𝑇𝑃𝑚𝑜𝑛𝑒𝑡𝑎𝑟𝑦_𝑖𝑛𝑓𝑜 = −Τ𝜕𝑣𝑣𝑖𝑘 𝜕𝐶𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛

Τ𝜕𝑣𝑣𝑖𝑘 𝜕𝑃𝑟𝑖𝑐𝑒= −

𝛽6 + 𝛽8. 𝐶𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 × 𝐶𝑜𝑠𝑡_𝑖𝑛𝑓𝑜

𝛽7

𝑀𝑊𝑇𝑃𝑙𝑎𝑏𝑒𝑙_𝑖𝑛𝑓𝑜 = −Τ𝜕𝑣𝑣𝑖𝑘 𝜕𝐶𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛


𝛽6 + 𝛽9. 𝐶𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 × 𝐿𝑎𝑏𝑒𝑙_𝑖𝑛𝑓𝑜

𝛽7

𝑀𝑊𝑇𝑃𝑔𝑒𝑛𝑑𝑒𝑟 = −Τ𝜕𝑣𝑣𝑖𝑘 𝜕𝐶𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛


𝛽6 + 𝛽10. 𝐶𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 × 𝑀𝑎𝑙𝑒

𝛽7

Refrigerator Α

Price: 550 Euros

Refrigerator Β

Price: 600 Euros

None of them


Preliminary results

Conditional logit results from the household appliance DCE

Value Std. Err. z

ASC 2.6127*** 0.1250 20.91

Energy_class2 (level: A++) 0.5247*** 0.0363 14.44

Energy_class3 (level: A+++) 1.0188*** 0.0364 28.01

Fresh_food_capacity2 (level: medium) 0.4204*** 0.0364 11.55

Fresh_food_capacity3 (level: high) 0.7473*** 0.0369 20.24

Frozen_food_capacity (level: high) 0.3881*** 0.0268 14.48

Consumption -0.0062*** 0.0003 -19.95

Price -0.0030*** 0.0002 -14.63

Consumption x Cost_info 0.0002 0.0002 0.95

Consumption x Label_info -0.0009*** 0.0002 -4.01

Consumption x Male 0.0007*** 0.0002 3.14

WTP (euros per kWh

reduced consumption)

Stand Err Z Confidence Interval

Control 2.28*** 0.1768 12.94 1.94 to 2.64

Treatment 1 2.21*** 0.1724 12.84 1.88 to 2.55

Treatment 2 1.98*** 0.1591 12.45 1.67 to 2.29

Treatment 3 1.91*** 0.1550 12.30 1.60 to 2.21

Willingness to pay estimates from the control and treatment groups

Experimental design

Non-labeled experiment


(Treatment 2)


(Treament 3)

Labeled experiment


(Control sample)


(Treatment 1)


A DCE with consumers in Greece

• Conclusions (Work in progress):

• WTP for EE: The DCE indicates a decrease in the willingness to pay for energy savings when labels

accompany energy information with monetary estimates - however, the interaction variable is statistically

insignificant.

•A tentative explanation: including monetary energy cost estimates in the refrigerator energy labels

would not probably affect the consumers’ choices due to the relatively low annual operating cost

of the refrigerator. BUT may contradict what happened in Spain!

•Or the consumers have difficulties to calculate expected savings (as will be the differences in

consumption per class in 10 year time times energy price) and compare them with upfront cost.

•Impact of gender: Females demonstrate a higher valuation for EE than males, for the control and the

treatment samples.

Concluding remarks

€• Costs or savings?

• For some appliances better?

How to build up trust?:

• QR codes?

• Databases?

• Other?

How can we make it easier to

understand?:

• Explain symbols

• Explain letters

• Others?

[email protected]

www.bc3research.org

Brussels, 6 June 2019

www.conseedproject.eu @conseedproject @EneryWiseEU

mailto:[email protected]

http://www.bc3research.org/

http://www.conseedproject.eu/

energy efficiency symposium€¦ · household appliances (refrigerators and washing-machines) focus...

Documents