EY: Will Consumers Pay More for Sustainably Sourced Energy?

Greg Guthridge, EY, comments on research into consumer behaviours and sentiments towards sustainable energy sourcing during the cost-of-living crisis

The cost-of-living crisis acts as a barrier to sustainable energy, emphasising the role that consumers play. As energy firms strive to make their services sustainable—or are built on providing zero-emission energy—consumers are still questioning affordability, access to renewable sources—again impacted by cost—and their personal reasons for shifting towards cleaner options. 

While the onus is often on companies to provide clean energy, consumer sentiments are critical in actual adoption. While energy firms are able to provide businesses with power purchase agreements that claim the electricity they receive swerves fossil fuel power plants. This ultimately impacts upstream emissions, but is no answer for the energy that consumers use in their homes. 

Affordability seems to be the overwhelming factor for homeowners. Generally, home energy bills are rising, let alone the higher costs of sustainable options. Solar PV panels and other methods have been notoriously high, which stunted the growth of such solutions. 

The sentiments towards rising energy prices is a mixed bag and will likely impact those that are less able to afford electricity full stop. 

EY’s Greg Guthridge, the Global Energy & Resources Customer Experience Transformation Leader shares research into this—responses from consumers that will likely impact the approach of energy firms and subsidiary businesses to encourage more adoption of modern solutions. 

“Consumer apprehension comes as we enter a new—more difficult—phase of the energy transition, all while dealing with higher energy prices, geopolitical volatility, and growing concerns around energy equity,” says Guthridge.

“While efforts on the supply side are gaining momentum, we need an even more fundamental shift in how we engage and encourage sustainable consumer behaviour. Energy consumers want a clean energy future but need a broad range of support to make personal energy choices. Closing the gap between their interest and action will depend on energy providers, government, and the broader energy ecosystem working together to pull every lever available.”

How do consumers feel about shifting to sustainable energy sources? 

According to EY research, only 30% of consumers are actually confident they will be able to afford energy long-term. This figure of course speaks for all types, and fails to mention the sentiments towards clean sources. 

Most likely, consumers are focused on cost-saving, which can impact their ability to see the benefits of sustainable energy for themselves and the planet. When higher costs are involved, these pressures can overwrite the need to source more responsibly. This is perhaps where sustainable strategies fall down as economic peaks and troughs, and disruptive global events, take their toll on homeowners.
Turning to corporations to manage their energy and ensure reduced costs, consumers are more likely to adopt what they can in order to keep their bills to a minimum. The survey shows that 65% of energy consumers are aware they could make more sustainable decisions, but 70% won’t spend more on doing so. 

“Change is accelerating exponentially across the world’s multiple energy transitions. Disruption to the energy industry is increasing. And at the heart of this is the consumer. The EY research shows consumers are interested about the potential of change but want partners to help,” says Guthridge. 

The research is detailed further here

But real changes can happen among energy firms as they invest in a mix of solutions to bolster the needs of consumers in a disruptive period. 

“This creates an opportunity for energy providers to reshape themselves as trusted advisors -making change easier, faster, broader, and deeper,” says Guthridge. “A holistic, consumer-centric approach to the energy transition is how we accelerate progress toward a fairer, greener, and better energy system that delivers more value for everyone.” 

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