by Richard Claeys
In step with the reality of rolling electrical blackouts in California, a new national survey finds measurable interest among affluent U.S. consumers in generating their own electricity at home.
As technical advances bring smaller, quieter and more affordable generating units closer to reality, the survey shows a discernible market emerging among upscale households. This market is wide open to a variety of entrants, according to the findings. Indeed, a major finding indicated that consumers are ambivalent whether manufacturers, utilities, or retail outlets provide the equipment as long as the power is reliable.
The survey, found measurable levels of experience and interest among high-income consumers in generating their own electricity. Customers reported that their household use of electricity has increased over the past five years, and expected it will increase in the future. Since these respondents held stronger environmental convictions than the population as a whole, they constitute a promising initial market for the introduction of on-site generating equipment, according to the survey.
Nearly a third-31 percent-of the consumers surveyed expressed interest in generating their own power on site. Within this group, 20 percent would prefer using on-site generation instead of their present utility for their electrical needs, according to the survey. Another 20 percent expressed interest in deploying on-site generation to supplement the electricity provided by their present supplier.
These results are part of the third annual national market survey of distributed generation conducted by RKS Research & Consulting, a nationwide market research and public opinion polling firm. RKS interviewed 838 heads of households across the nation between July and September 2000. The interviews, completed by telephone, concentrated on households with annual income in excess of $50,000 throughout the U.S.
Confirming the demand trends that contributed to the crisis in California, more than half the survey respondents reported that their power usage has increased over the past five years. Among households with multiple computers, the score rose to 59 percent. On average, high-income households recalled three electrical interruptions of five minutes or more over the past year, plus six power fluctuations that required the resetting of home appliances and equipment.
And while upscale customers gave their utilities satisfactory scores for responsiveness and value, the survey indicated that this support is thin. Indeed, three-quarters of those surveyed said it doesn’t matter which company supplies their home with electricity, as long as delivery is reliable.
“This finding suggests that consumers view energy suppliers as interchangeable and faceless delivery entities,” said David J. Reichman, RKS president. “Now that events in California confirm the weakness of the power grid, we may have arrived at the defining moment that accelerates awareness and receptivity to new technologies that eliminate customer dependence on time-honored poles and wires.”
The RKS survey found a strong correlation between environmental consciousness and interest in on-site power. For example, three-quarters of the affluent households surveyed advocated the use of renewable resources to produce electricity. And six in 10 favored self-generation of power, compared to only a 20 percent level of support for building new central power plants.
Many of these upscale consumers were already conversant with small-scale power generation and storage devices, according to the survey. For instance, nearly one in 10 respondents have purchased or leased an emergency or backup generator for their primary residence, and 16 percent use such equipment at their weekend or vacation homes. Another 40 percent are considering the purchase of a generator, while eight in 10 already own UPS systems or surge protectors.
“Taken together, the data suggest that on-site power solutions could be marketed effectively on the basis of innovation, environmental benefits and self-sufficiency-not just insurance against outages,” Reichman said. “As these more affluent customers assess the uncertainties of power delivery in the wake of deregulation, I believe they will be receptive to a total solution-equipment, financing and support-from a single source. And the findings confirm that the present electricity supplier has not established a credible advantage at the present time.”
RKS Research & Consulting designs and conducts both syndicated and customized market research and public opinion polling service for energy and natural resource clients and their major associations. RKS operates from headquarters in North Salem, N.Y. More information is available from Richard Claeys, (408) 248-1090, and at www.rksresearch.com.