ARE HOUSEHOLDS WITH SOLAR ROOFTOP PV SYSTEMS MORE OR LESS LIKELY TO SUPPORT ENERGY SERVICE COMPANY (ESCO) SERVICES? AN AUSTRALIAN CASE STUDY

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1 ARE HOUSEHOLDS WITH SOLAR ROOFTOP PV SYSTEMS MORE OR LESS LIKELY TO SUPPORT ENERGY SERVICE COMPANY (ESCO) SERVICES? AN AUSTRALIAN CASE STUDY Zaida Contreras 1, Lygia Romanach 2, Peta Ashworth 2, Michelle Rodriguez 2 1 Victoria Department of Environment and Primary Industries (DEPI). 2 CSIRO Science into Society Group IAEE International Conference, June , New York

2 2 Installed capacity [kw] Adoption of solar PV in Australia Solar PV installed capacity by Feb 2014: 3.2 GW (registered) 3.4GW (estimated) Source: Australian Photovoltaic Institute (APVI)

3 3 Solar PV in Australia State based feed-in tariffs introduced earlier in 2008 but now removed for new installations since 2011 Focus on distributed generation and end-user engagement in electricity markets following a review of retail prices and peak demand trends in the Australian Energy Market Commission s Power of Choice Small-scale Renewable Scheme (SRES) still in place: upfront incentive through Solar Technology Credits (STC) to meet the legislated Renewable Energy Target (RET) of 41TWh by 2020 this is about $2,500 on the initial investment of a 3kW system Current payback periods for a 3kW solar PV system in Australia is 6 years with SRES, but about 9 years without SRES.

4 4 National survey results The survey: undertaken by CSIRO on behalf of the Australian Photovoltaic Association (now Australian PV Institute) in March-April Investigated motivations, concerns, relative importance of technology attributes and business models for residential solar PV. Provided a representative sample of the Australian population interms of gender, age groups and place of residence (2,390 people). Source: Romanach, L., Contreras, Z., and Ashworth, P. (2013). Australian householders interest in active participation in the distributed energy market: Survey results. Report nr EP CSIRO, Pullenvale. Australia.

5 5 Econometric model (1) Probability of choice Observed outcome

6 6 Econometric model (2) The following explanatory variables were included in the model: Socio-demographic variables: dummy variables for gender (female=1), house ownership, education levels, income groups, age groups, living in a city, number of household members and number of children Psychological variablesbased on the Value Belief Norm Theory applied bystern et al. (1999; 2000) mean values of measures in a 5-point Likert scale for: Ascription to Responsibility (AR) Awareness of Consequences (AC) Personal Norms (PN) Knowledge measures: objective knowledge quiz score about energy use and environment in Australia, self-assessed knowledge of solar energy Other end user preferences: perceived benefits of solar PV, support towards ESCOs, concerns about energy security, use/ownership of energy efficiency appliances

7 Summary statistics: solar PV ownership Which devices you have in your home and whether you have installed it in the last 5 years? 7 Appliances Have this technology at home Installed in the last 5 years freq. % freq. % Water-saving showerhead(s) % % Solar PV panels % % Solar hot water system % % Solar heater in the pool % % Rainwater tank % % Outdoor solar lighting % % Low-energy light bulbs % % Insulation % % Gas water heating system % % Energy efficient appliances % % Electric hot water system % % Draught proofed windows/doors % % Double glazing windows % % Central heating % % Ceiling fans % % Air-conditioner % % Source: Romanach et al. (2013).

8 Summary statistics: support to ESCOs (1) As defined in the survey: Another type of distributed energy system involves energy companies providing a service package for operating and maintaining the household energy system. Please take your time to read the description of this system before answering the questions below. ENERGY SERVICE COMPANY SERVICE PACKAGE In this option an energy company undertakes a home auditof the household electricity needs and designs an energy packagesuitable for your household, aiming at optimising your household energy consumption. This could include the investment in and installation of devicessuch as a solar PV system, solar hot water system and energy efficient appliances in your home. The energy company would also invest in and install an electronic energy manager to work out the best time for your household to use appliances. The electronic energy manager might switch on and off some of your major home appliances (such as air conditioner, pool pump and hot water system) to reduce electricity use at times of high demand and high cost. You can still control the energy manager to override it any time. The energy company establishes a contract with you to remotely manage the use of your appliances. You sign a contract (usually a 10 year contract) and instead of paying a power bill you pay a fixed monthly bill to the energy company. 8

9 Summary statistics: support to ESCOs (2) How much do you agree with each of the following statements about signing to an ESCO package? (1 = strongly disagree, 5 = strongly agree) Mean St Dev The package sounds like a good idea My friends and family are likely to support it I would consider signing to an energy service company package This sort of package is not suitable for my home ESCO variable: 1 if mean support for ESCOs 3.5, 0 if mean support for ESCOs < On what basis would you be prepared to sign a contract with an Energy Service Company to give them permission to manage how electricity is used Freq. % in your home? (Please tick main reason only) To save money on my power bill % So I don t need to worry about how I use electricity at home % To reduce the use of energy at peak demand % To reduce my household carbon emissions % Yes. Other reason % Not at all % Source: Romanach et al. (2013).

10 10 Preliminary findings Regression results Households with house ownership, residence in non-metropolitan areas and larger families are more likely to having installed solar PV systems People who consider they have strong knowledge of solar energy are more likely to install solar PV systems, but those with strong objective knowledgeof the Australian energy and environmental context are less likely to do it Pro-environmental beliefs and values not consistent across model variants No statistically significant relationship with energy conservation measures Negative relationship with the support for ESCOs packages Australian households supporting ESCOs services for demand management appear to be less likely to have solar PV systems, despite ESCOs offering monetary savings. Is this negative relationship due to end-users perception about the level of control and privacy?..or limited familiarity with ESCOs options available in the market?

11 11 For further findings from the survey by CSIRO: Australians and the distributed energy market Please contact: Dr Lygia Romanach, Postdoctoral Research Fellow Ms Peta Ashworth, Science into Society Group Leader Further questions on this paper: Thank you!

12 12 References Romanach, L., Contreras, Z., and Ashworth, P. (2013). Australian householders interest in active participation in the distributed energy market: Survey results. Report nr EP CSIRO, Pullenvale. Australia. Stern, P. C. (2000). New Environmental Theories: Toward a Coherent Theory of Environmentally Significant Behavior. Journal of Social Issues, 56(3), Stern, P. C., Dietz, T., Abel, T., Guagnano, G. A., & Kalof, L. (1999). A Value- Belilef-Norm Theory of Support for Social Movement: The Case of Environmentalism. Human Ecology Review, 6(2),

13 APPENDIX: SUMMARY STATISTICS AND REGRESSION RESULTS 13

14 14 Summary statistics: sample overview Variable Full sample Households decision-makers Mean Std. Dev. Mean Std. Dev. Solar PV user (dependant var) Respondent is a female Lives in a house Owner of home property Lives in a city Number of children at home Log (nr of people in household) Awareness of Consequences Ascription to Responsibilities Personal Norms Perceived benefits Obj. knowledge score Subjective knowledge score Support of ESCOs Concerns about energy security People having installed energy efficiency appliances Nr Observations The composition in terms of highest qualification obtained, income and age groups was also similar in both samples

15 15 Regression results Variables Probit PVuser all Probit Probit PVuser DM PVuser all2 Probit PVuser DM2 Logit Logit Logit Logit PVuser all PVuser DM PVuser all2 Pvuser DM2 Lives in a house 0.56*** 0.55*** 0.56*** 0.55*** 1.03*** 1.01*** 1.03*** 1.00*** (0.11) (0.13) (0.11) (0.13) (0.20) (0.24) (0.20) (0.24) Owner home 0.72*** 0.72*** 0.72*** 0.73*** 1.26*** 1.24*** 1.27*** 1.26*** Property (0.08) (0.11) (0.08) (0.11) (0.15) (0.21) (0.15) (0.20) Lives in a city -0.17** -0.20** -0.21** -0.24** -0.29** -0.33* -0.36** -0.39** (0.07) (0.08) (0.07) (0.08) (0.11) (0.13) (0.11) (0.13) Log (nr people in 0.27** 0.36*** 0.29*** 0.39*** 0.47** 0.63*** 0.50*** 0.66*** household) (0.08) (0.10) (0.08) (0.10) (0.15) (0.17) (0.14) (0.17) Awareness of -0.10^ -0.13* ^ -0.22* Consequences (0.05) (0.06) (0.05) (0.06) (0.09) (0.11) (0.09) (0.10) Ascription to Responsibility (0.05) (0.06) (0.05) (0.06) (0.09) (0.11) (0.09) (0.11) Personal Norms * 0.11^ * 0.18^ (0.05) (0.06) (0.05) (0.06) (0.09) (0.11) (0.09) (0.10) Perceived benefits 0.40*** 0.45*** 0.71*** 0.79*** (0.05) (0.06) (0.10) (0.11) Obj. knowledge -0.06* -0.08** -0.06* -0.08** -0.11* -0.15** -0.11* -0.14** score (0.03) (0.03) (0.03) (0.03) (0.05) (0.05) (0.04) (0.05) Subj. Knowledge 0.19*** 0.20*** 0.23*** 0.26*** 0.32*** 0.34*** 0.40*** 0.44*** score (0.04) (0.04) (0.03) (0.04) (0.06) (0.07) (0.06) (0.07) Support of ESCOs -0.16* -0.17* -0.11^ -0.12^ -0.28* -0.30* -0.20^ -0.21^ (0.06) (0.07) (0.06) (0.07) (0.11) (0.13) (0.11) (0.12)

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