Energy literacy: an overlooked concept to end users’ adoption of time-differentiated tariffs

Abstract

Demand-response programs have been implemented aiming to reshape consumption patterns through time-differentiated price signals reflecting generation availability and grid conditions. Although these programs have been in place for several years, it is still unclear to what extent end users are ready (and willing) to adopt them, as they may require understanding complex information related to energy tariffs and consumption patterns and consequently changing behaviors and daily routines. This work aims to assess the influence of end users’ literacy (including proficiency on energy-related topics, numeracy, and graphical literacy), the decision style, and the way electricity tariffs information is framed, on the willingness to adopt time-differentiated tariffs (TDT). An exploratory online survey was conducted between March and May 2018 to a convenience sample of 340 Portuguese university students who, although not being representative of the whole population, are illustrative of the next generation of more literate energy end users. Results highlighted the role of energy literacy as a crucial factor in facilitating the readability and understandability of TDT information and in encouraging end users to adopt TDT schemes. The different dimensions of energy literacy showed to influence the results differently as worse numeracy and graphical literacy levels were correlated with a lower willingness to adopt TDT. Results also revealed the relevance of the framing effect in the end users’ willingness to enroll in TDT and socio-demographic parameters (as age and housing) emerged as relevant factors influencing the willingness to adopt such pricing schemes. These results convey further information for the design of more effective energy policies aiming to promote end users’ energy literacy and empowering them to make more informed decisions.