Green electricity deals are too complex – even as a researcher in sustainability I’ve been confused
- Written by Lala Rukh, PhD Candidate, Energy, University of Galway
After comparing electricity tariffs on a spreadsheet, I can confirm that deciphering the plans feels a bit like learning ancient Greek.
As part of my doctoral research, I decided to explore smarter electricity plans (those that use smart meters and offer fluctuating prices) from different providers. That’s when I realised the standing charges – those fixed costs all customers must pay regardless of usage – took up such a large proportion of my bill that other changes might not make much difference.
Three spreadsheets and two mugs of coffee later, it was clear that choosing the “smarter” electricity plan is more of a labyrinth than a lightbulb moment. If a researcher in sustainability gets tangled in opaque pricing structures, what hope is there for the rest of the population?
In the UK, as well as in Ireland, energy standing charges[1] are regulated, fixed daily fees. All suppliers levy these fees (as well as what’s known as a “public service obligation levy” in Ireland) regardless of how much electricity the customer uses. The charges cover upkeep of the network, meter servicing, billing and customer support.
My PhD focuses on energy performance in homes and sustainability behaviour. As part of my ongoing research, I asked people if they had ever thought about switching their energy plan or provider. Typically, they would shrug and say that they thought they were on the best one.
Many don’t know (or don’t care) about green tariff options. And many are not willing to endure the paperwork or the headache of changing plans. This tends to be the case even if it means they are stuck with something that is far from ideal.
Why is it so complex? First, there are about 20 providers in the UK and a dozen in Ireland. And then there are standard or smart meters to decide on, and 24-hour flat rates or peak/off-peak bands. This is before consumers even get to the “green premium” that pushes up the price they will pay per kWh slightly.
Once consumers have weighed all this up, some still have to consider things like direct-debit discounts, export credits if they have solar panels, and rates for charging electric vehicles. They could be forgiven for wondering if doing the right thing by the planet was meant to be this hard.
Beyond money and frustration, I found that there is an emotional toll for people in feeling like they have done something meaningful only to hit another barrier further down the line. That disillusionment can lead to “sustainability fatigue”[2], where the urge to give up outweighs the urge to improve.
In both the UK and Ireland, providers are also required to give consumers an estimated annual energy bill. This figure is generic (it is based on the national average of a three- or four-bedroom house) and as such it doesn’t help households greatly.
From my research, I have found that houses (and especially apartments) of very similar build type vary significantly in terms of energy use. After all, people clearly consume energy differently.
Smart meters[3] could help hugely because they give households an insight into their energy use moment by moment. For instance, the energy expert Hannah E. Daly discovered that an old water pump in her home was silently consuming at least 800 watts of power.
This is the strength of smart meters – they make the invisible visible. When people can see which appliances are driving up their energy use, they are more motivated to change their behaviour or upgrade inefficient devices. They could also shift consumption to cheaper or cleaner times of day – the hours when energy use is best suited to the grid and often cheapest for the consumer (for example, 2am until 5am).
Leaders, brands and marketers often urge consumers to live more sustainably and switch to renewable energy and recyclables where possible. Yet the fine print can feel like it’s designed to trip people up. Sustainability should be baked into every product and service as standard.
For example, the EU-mandated energy label[4] makes it easier for consumers to choose more energy-efficient appliances. In a similar way, all products and services should have a standardised sustainability rating — gold, silver or bronze could work well for this — to help customers understand how sustainable each option is.
Energy suppliers force the work on to consumers, making them jump through hoops just to be a bit greener. If going sustainable is truly the future, it probably shouldn’t feel like a luxury.
References
- ^ energy standing charges (www.ofgem.gov.uk)
- ^ “sustainability fatigue” (www.deloitte.com)
- ^ Smart meters (theconversation.com)
- ^ energy label (energy-efficient-products.ec.europa.eu)
