Standing charge rebates and flexible electricity use trials
- Publication type:
- Research
- Publication date:
- Topic:
- Energy pricing rules,
- Electricity supply
- Subtopic:
- Standing charges
Findings from large-scale trials to test whether standing charge rebates encourage consumers to move their electricity use away from peak times.
Main points
- Standing charge rebates encourages some households to use less electricity between peak times 4pm and 7pm, but the effect was modest and observed in only one of the two trials.
- Doubling the maximum rebate resulted in only a small additional reduction in peak-time electricity use, suggesting larger rewards may have limited additional impact.
- Customers in vulnerable circumstances, including some prepayment meter and Priority Services Register customers, showed relatively strong responses to the rebates, demonstrating their potential to move their electricity usage when incentives are clear and accessible.
- People who took part in the trials said that it gave them a sense of control over their use and it softened negativity about standing charges.
- Household commitments and behavioural factors, including forgetting peak times and not recognising potential savings, limited consumers' ability to shift electricity use.
Methodology
To build a comprehensive evidence base, this research programme combined multiple research methods. First, we ran two large-scale randomised controlled trials involving more than 43,000 customers across British Gas and ScottishPower. Customers were automatically enrolled unless they chose to opt out, helping to capture responses from a broader range of people than is typical in opt-in flexibility schemes.
We analysed a large behavioural dataset of half-hourly energy consumption from smart meters to measure changes in electricity use. Second, we conducted post-trial surveys with participants, and qualitative interviews exploring people's understanding, perceptions, and experiences.
To inform the communications in the trials, we carried out a set of online experiments to test communications to people before and during the trials. Together, these methods allowed findings to be triangulated across research methods, providing insight not only into whether people responded to the intervention, but also how they experienced it, why changes occurred or did not occur, and what considerations would be relevant for future trials and research.
The findings offer important insights for the future design of consumer flexibility propositions, tariff structures and charging arrangements.