Promoting acceptance of direct load control programs in the United States: Financial incentive versus control option

Abstract

Residential direct load control (DLC) is an important type of demand response designed to reduce electricity consumption during peak hours through utility companies' control over the operation of certain household appliances. Despite many benefits of DLC, customers' concern for losing control has been hindering its adoption. This study aims to investigate U.S. residents' willingness to accept two popular A/C-related DLC programs in summertime with or without financial incentives or an override option, and to identify the socio-demographic characteristics associated with the decisions. Results of an online survey among 1482 U.S. residents indicate half of the participants are willing to accept DLC without any conditions; however, both an incentive of $30 and an override option boost acceptance rates. Importantly, the override option is more effective than the financial incentive. Residents who are younger, Democrats, non-Whites, have higher education levels, live in larger dwellings, and live with more people are more likely to adopt DLC than their counterparts. Residents who are older, Republicans, Whites, homeowners, and live in a house preferred an override option to financial incentives more often. The implications were discussed in terms of improving power system stability through better DLC program design and implementation.