PwC Energy Retail survey reveals consumer segment that’s more willing to ‘pay their part’ for Net Zero

• After three COVID-19 lockdowns, 43% of people are now more conscious of their home energy usage, a 13% increase from May 2020, with 97% of them considering making changes to how they use and buy energy
• 78% of consumers using a smart meter are changing how they use their energy supply
• ⅓ of households now have at least one smart tech appliance with two in five planning to install smart lighting, heating or plugs in the next two years
• Two in three consumers are likely to shift their usage outside of ‘peak hours’ for high consumption appliances in return for lower energy costs

When it comes to selecting an energy supplier and package, price is beginning to lose its crown, with a significant segment of customers now saying the right low carbon tariff is as important as price, with some even willing to pay more according to a new PwC survey.

The Energy Retail Survey reveals increasing customer awareness and changing energy preferences in the wake of COVID-19 which saw as many as 72% of respondents working from home. As a result, 43% of people are now much more conscious of their home energy usage, a 13% increase from May 2020, with 97% of them considering making changes to their energy supply - from the firm that supplies it and how to reduce costs to ways to reduce carbon emissions. 

The survey shows that the pandemic, in combination with increased focus on climate change, has created a new wave in engagement in energy. The results show that: 

• 56% of consumers are aware of Net Zero with 93% of them caring that the UK climate targets are met by 2050
• When Net Zero is explained to the remainder, 80% are keen for the UK to reduce carbon emissions close to zero and replace fossil fuels in energy systems.
• 73% of Net Zero conscious consumers believe securing the right low carbon tariff is as important as price - with 27% willing to pay more for it
• 60% now rank a low carbon tariff in the top three most important things when selecting a supplier, creating a potential tipping point in support of low carbon energy

Crucially, environmentally aware consumers are now expecting suppliers to take direct action when they choose a low carbon tariff. Two thirds expect suppliers to be actively generating or directly purchasing the low carbon energy themselves – they are considering the holistic green credentials of their supplier and are wary of greenwashing.

Michael Timar, Head of Power and Utilities at PwC, says:

“The pandemic has shifted consumer behaviours across a range of sectors and, with so many of us working from home over the last 13 months, energy and how we use it has gained more importance. 

“The long held belief that people only cared about good customer service and low prices is eroding.  Customers now have new avenues to bring their attitudes towards Net Zero and sustainability into their energy choices, such as technology to manage their energy usage and a choice of low carbon energy tariffs.  

“In short, we found that when a customer understands their own energy usage emissions and is emotionally connected to Net Zero, they are more likely to be willing to ‘pay their part’ to reach the 2050 target.

“With Net Zero clearly cutting through to the public, energy suppliers need to adjust how they engage and cater for this emerging breed of customer. Those energy suppliers that can show that they have a key part to play in achieving the target, can use this to build a valuable customer engagement strategy and grow market share.”

Suppliers must switch on to new breed of buyer

The survey shows that this emerging breed of astute, conscientious buyers represent not just a significant proportion of the market, but one that is exploring multiple opportunities to show their preferences through their energy supply and management.

Our survey has found that a third of customers are more inquisitive about their energy and want more data on their consumption patterns. They are also more likely to have invested in ‘low ticket’ home energy technology, such as smart plugs, lighting, or heating. Interestingly, they are likely to carry this behaviour into the future, with over half hoping to be driving an EV within the next three years.

According to PwC, suppliers have a window of opportunity during which they need to ask themselves how they can differentiate their brand and products to appeal to this customer; what capabilities are needed to capture opportunities beyond the tariff; and what is the best model to meet the higher expectations of this Net Zero conscious customer.

Michael Timar added:

“This convergence of attitudinal, environmental, and technological factors, producing the rise of a potentially underserved customer segment, is powerful. And given the direction of travel across society at large in respect to hybrid home-office working, greater ability to track usage and sustainability awareness, it is highly unlikely to slow in retail energy supply. 

“Our research shows that consumers are now differentiating between the ‘type’ of energy they receive, which introduces the prospect of premium products that can align to customer’s concerns around carbon emissions. The time is now for energy companies to seize this opportunity and either reinforce or reposition their brand and their capabilities - if they don’t, they could lose out in the long run.”

Ends

Notes to editors: 

About the survey - In January 2021, PwC surveyed over 2,000 energy customers from across the UK to understand how attitudes, knowledge, technology and household characteristics collide to influence choices made in relation to their energy. The full report can be found at www.pwc.co.uk/energyretailsurvey .