Cold homes, EV cost perceptions surprise in Pulse survey

By Felicity Wolfe - Tuesday, 9 December 2014

Pulse Energy says a surprising number of people claim not to heat their homes - pointing to a wider energy poverty issue.

Chief executive Gary Holden says the 15 per cent of respondents in the firm's Great New Zealand Energy Survey who claimed not to use any form of home heating was a "surprisingly large number".

“The discussion about energy poverty in New Zealand is a troubling one for the industry and the strongest illustrations of this are reflected in consumer behaviour. Demand elasticity can be quite strong in lower income houses and New Zealand consumers can choose to be uncomfortable as a means to save money on their power bills.”                   

Nearly half of the respondents in the survey said they do not heat their bedrooms at all and 24 per cent cut down their energy consumption by using more blankets.

Just over two thirds of participants heat their homes with electricity and 16 per cent use gas. The rest either use wood burners, or nothing.

But only 39 per cent of respondents considered themselves to be ‘very active’ in reducing their energy consumption. Holden says that is low compared with Australian research showing that 80 per cent of consumers there were consistently seeking ways to reduce energy consumption.

Electric vehicle perceptions

Another surprising result in the survey was that two-thirds of respondents thought it would be more expensive to run an electric car than a petrol one.

Pulse says New Zealanders seem unaware that electricity for transportation is cheaper than petrol. Sixty-four percent of those surveyed believed electricity would cost the same or more than petrol.

In fact, electric vehicles cost much less than conventional vehicles to run. The Energy Efficiency and Conservation Authority's Energywise website says charging an EV is equivalent to buying petrol at about 26 cents per litre.

If all costs were equal, 84 per cent of respondents thought they would be likely to choose an EV over a conventionally-fuelled car in the future, but only 5 per cent said they would buy one to save energy.

By comparison, 26 per cent singled out energy efficient light bulbs as energy reduction investments they would make. Fifteen per cent of respondents said the same for solar PV.

Holden says that after a decade of rising power prices it is unsurprising that electricity price perceptions are “very poor”.

He says there is an almost “universal expectation” of continued price rises - 95 per cent of respondents think their bills will continue to increase over the next three years.

With the majority of people - 85 per cent - believing there is an advantage to solar relative to the retail day-time electricity price, he expects more consumers will choose to generate their own power.

More than 10,000 people completed Pulse Energy’s online survey between April and the end of October. The online survey covered a wide range of energy related topics including energy efficiency, competition, pricing and the future of electricity.

Survey participants were asked about the size of their home, the make-up of their household and how they use energy. There were also questions about respondents’ perceptions of energy retailers, how they view the industry’s competitiveness and what their view of the future is.

Billing transparency

Pulse says 80 per cent of respondents valued being able to see all components of their electricity bills.

The survey asked respondents to rank what they valued most in a retailer – transparency, customer service, reputation, ownership, low prices, environmental responsibility, community support, trustworthiness and being vertically integrated.

Billing transparency was ranked second behind low prices at 95 per cent, and ahead of customer service at 77 per cent, as a factor to consider when choosing a retailer.

Only 14 per cent said government ownership was a consideration and 15 per cent said they valued their retailer having their own generation.

The survey also showed that more than 43 per cent of people thought increases in their electricity bills in April were due to retailers increasing their billing and administration costs – despite most firms pointing out in letters and the media that much of the increase was due to costs passed through from lines companies.

The results also show that there is a low public recognition of lines companies around the country – with only 45 per cent of lower North Island participants able to identify their distributor.

Awareness was higher in other areas of the country – reaching 61 per cent among lower South Island consumers.

Improving service, offerings

Pulse says the survey results will help it develop new offers by improving its understanding of what product features different customers are looking for.

It says the people who took part in the survey were broadly representative of New Zealand residential electricity consumers. While there was an over-representation of Pulse, Grey Power and Powershop customers, the number of Genesis Energy, TrustPower and Contact Energy customers taking part correlates to those brands’ customer numbers. There was an under-representation of Mercury Energy and Meridian Energy consumers.

The demographic results also show a cross-section of society – 50 per cent had children and there was a normal distribution of small, medium and large homes.

The average electricity spend was in-line with national averages of $2,000 per year at about $150 per month in summer and $250 during winter.

The firm offered respondents a chance to win a ‘lifetime’s supply’ of energy valued at up to $5,000 per year for 35 years. The winner – a woman on the Electra network – was contacted on Friday.