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CONSEED Report Summary

Project ID: 723741
Funded under: H2020-EU.3.3.1.

Periodic Reporting for period 1 - CONSEED (CONSumer Energy Efficiency Decision Making)

Reporting period: 2016-12-01 to 2018-05-31

Summary of the context and overall objectives of the project

CONSEED – Consumer Energy Efficiency Decision Making – is a Horizon 2020 project which directly investigates how consumers make decisions which involve an energy component, and investigates how to promote more energy efficient behaviour through future energy efficiency policy.

The European Union has set itself a 20% energy savings target by 2020, and at least 27% by 2030. Successfully reaching this goal can help reduce climate change, and help con¬sumers lower their energy bills. However, due to a range of market and non-market based failures, consumers do not always choose cost-minimising products, i.e. those which have the lowest combined investment and energy cost. This gap between the energy savings potential and actual con¬sumer decisions is called the “energy efficiency gap”.

To address these issues, the EU Commission has mandated that electrical appliances, cars and buildings carry information to indicate their energy consumption at the point of sale. However, little is known about the effect of energy labels on decision-making, nor indeed consumers’ perceptions of the costs and benefits of energy efficiency, or how these factors change by consumer group and product type. The key aim of CONSEED is to understand consumer energy-related decision-making and investigates how to make (energy) operating costs more salient to consumers at the point of purchase to increase efficient behaviour.

To achieve this, CONSEED is collecting empirical data on consumer behaviour through a range of different methods across five European countries: Greece, Ireland, Norway, Slovenia and Spain.

CONSEED involves 4 steps:
1. Develop a theoretical framework
2. Conduct a range of interviews, focus groups, large consumer surveys, field experiments, and discrete choice experiments
3. Validate the theoretical models using our empirical data.
4. Deliver evidence-based research on consumer decisions involving an energy component to enable better, more efficient and effective energy policy.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

WP1 comprised an extensive literature review of 164 research papers on factors influencing consumer decision-making across 3 sectors (appliances, buildings and cars) and 4 consumer groups (households, services, agriculture and industry). This work established the foundations for a theoretical model of consumer decision-making which underpins the empirical analysis of later work packages.

WP2 involved 17 focus groups and 40 in-depth interviews, across consumer groups (households, services, agriculture and industry), product sectors (appliances, buildings and transport) and geographical locations (Greece, Ireland, Norway, Slovenia, Spain) to identify the most relevant factors in purchasing decision-making and the relative importance of EU energy policy in consumer decision-making. The results of WP2 informed the design of the surveys in Work Package 3.

WP3 involved the implementation of 11 surveys in 5 countries spread across 4 sectors: household appliances (Spain and Greece), residential properties (Ireland and Slovenia), personal vehicles (Norway), tractors (Ireland), heating and cooling systems in the services sector (Greece and Spain), commercial properties (Ireland), and industrial machinery (Slovenia and Norway).

Main results of WP2 and WP3 (see attached table illustrating the key messages from the CONSEED consumer surveys - WP3):
• Energy efficiency (EE) is considered very important across almost all types of investment decisions (although price is consistently the most important factor in investment decisions).
• EE is more likely to be valued by women than men.
• Knowledge gaps exist regarding both EU labelling schemes and various elements of the investment decision (e.g. Discount rates, time horizons etc.). Awareness is lowest in sectors where EU labelling is not compulsory, or is constrained by product type.
• Monetary labels would make energy labelling more understandable, and help understand operating costs.
• EE investments are impeded by credit constraints and perceived trustworthiness of labels.

WP4, involves three field trials (Spain: retail appliances, Ireland: property, and Norway: cars) and three discrete choice experiments (Norway: cars, Slovenia: property, and Greece: appliances), and is currently underway. The field trials and experiments will demonstrate if energy cost information increases the demand for energy efficiency.

WP5 (validating consumer decision-making models and estimating implicit discount rates) and WP6 (policy evaluation and recommendation) are yet to commence.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

CONSEED advances the current knowledge on how different consumer groups make energy efficiency investment decisions across Europe. CONSEED generates a large number of new datasets improving the evidence-base for the better development of future energy efficiency polices and energy models.

CONSEED brings together joined-up research on the consumer decision-making process across multiple consumer groups, products and locations. By comparing geographical, cultural and socio-economic variables such as gender, income, finance and education, CONSEED moves towards a more in-depth understanding of consumer attitudes to energy efficiency information. Such insights will be valuable to EU and government policy makers when assessing, designing and targeting energy efficiency policies.

CONSEED significantly enhances the state of the art in the area of evidence on discount rates for energy investments and, to the best of our knowledge, is the first project in the world to compare discount rates across such a wide range of sectors, products and locations using both hypothetical and real data in both generic and specific circumstances.

The CONSEED field trials will likely deliver energy efficiency improvements during the duration of the project. Significantly greater longer-term improvements in energy efficiency will be realised if our trials and experiments lead to implementable policy recommendations. Further to this, the theoretical framework developed by CONSEED will allow policy makers to appropriately target future policies to maximise consumer engagement and therefore potential energy savings.

CONSEED will continue to engage with a broad range stakeholders, from national policy makers, consumer interest groups and consumer watchdogs, to sectoral representative groups, retailers, as well as general public consumers. With targeted strategies for engaging and communicating with these groups, CONSEED has the potential to increase both energy efficiency policy awareness and its relevance in decision making, and generate more effective, and informed, energy efficiency decisions and policy.

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