IBM survey reveals lack of consumer understanding in smart grids

Last week, technology and consulting firm IBM (Armonk, N.Y., U.S.A.) unveiled findings from its "2011 IBM Global Utility Consumer Survey" which revealed that many consumers around the globe did not know what a smart grid was, as well as did not understand the basic unit of electricity pricing and other energy concepts used by energy providers. IBM surveyed more than 10,000 people across 15 countries to explore the wants and needs of energy consumers worldwide. According to the company, the findings expose a major gap between what consumers currently know and what they need to know to reduce energy consumption and benefit from smarter energy initiatives. More than 60% of those surveyed were unaware of what a smart grid or smart meter was. The survey also revealed that knowledge is linked closely to people's willingness to embrace change and their approval of local energy initiatives. According to the survey, 61% of people with a strong knowledge of energy technology and pricing terms viewed smart meters and smart grid deployment plans positively, compared to only 43% of those with minimal knowledge. "There have been major strides with new energy saving technologies, new programs and incentives, but in many cases the market is seeing more confusion amongst consumers than expected," said Michael Valocchi, vice president of Global Energy & Utilities Industry Leader for IBM Global Business Services. "This year's survey points to a need and an opportunity to go back to basics and educate consumers by using terms that they understand, behavioral triggers and channels they already use. People want to conserve energy; we just need to get better at showing them how." The perceptions, expectations and influences of the energy consumer have changed over the last four years, according to IBM. Despite efforts by utilities and others in the industry to create consumer-friendly conservation tools, many consumers still do not have the information or the proper incentives to make better energy choices. Financial incentives are not the only factors that encourage consumers to decrease their energy consumption, says the company. In fact, based on the consumer survey, money no longer dominates the decision-making process compared to years prior. Instead, younger consumers today are evaluating choices based on the environment, while those over 55 noted the health of their national economy as a key motivator for behavioral change, according to the survey. Another factor, according to IBM, is how a choice is framed and presented. For instance, presenting too many options can at times be detrimental because the complexity can ultimately demotivate consumers. This finding is consistent with the IBM survey results which showed that consumers under 25 are prone to follow the lead of others rather than sort through the options on their own, being two and one-half times more likely to rely on their personal networks as a primary source for information than those 55 or older.

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