Why don’t the British buy more renewable energy?
It’s there for the taking, with several really good companies offering consumers the choice of powering their homes with 100% renewable electricity – pure power sparked by wind and sun.
But the market share of domestic green energy providers compared to their more traditional ‘brown’ fossil fuel competitors is depressingly small. It is less than one per cent.
This is despite pure renewable power tariffs being available for the best part of two decades. It’s despite the incredibly rapid recent rise of the independent energy retail sector (up from basically nowhere three years ago to 17% today) where many green tariffs have been pioneered. And it’s despite a modestly increasing consumer interest in other matters sustainable, such as climate change, recycling, and organic foods, among other things.
Most householders, it seems, don’t care where their electricity comes from, so long as the lights stay on.
Why not? Why the apathy? And why have today’s renewable power retailers failed to ignite the public’s imagination?
These are big questions we’ve been contemplating as we plan the launch of our new renewable energy company later this year, especially since we’re keen to put sustainability at its heart.
The concern is even more perplexing when you read the latest Energy and Climate Change Public Attitude Tracker (Wave 19) from the newly formed Department for Business, Energy & Industrial Strategy.
Renewables enjoy the greatest public support of any form of energy by a country mile – 79% favour green power – with only 1% being strongly opposed. And this figure has been hovering around the 80% approval mark since the survey first began five years ago. Basically, a huge number of people think renewables are great!
Compare that to fracking which musters support of only 17%, and has 33% against; and nuclear with 33% in favour and 26% opposed.
Yet, despite such strong opinions, the public appears reticent to spend on its convictions… less than 1% have actively sought to buy a renewable tariff, remember.
Can it really be that the marketing campaigns of the renewable energy suppliers have been so bad? Is the green message too difficult to communicate? What’s the problem?
Money.
Price is everything in energy. Consumers choose tariffs on cost – or, more accurately, the savings they’ll make by deserting their existing supplier and switching to another.
The savings can sometimes be as much as 25% or £300 on a typical yearly bill of £1,200. Arguably, that delta has been caused by years of high – some say over – charging by the former state-owned suppliers, which were privatised in the early 1990s, and a public reluctance to trust the newer, cheaper independents. But now the upstarts have momentum, which has been won on price so far, the savings available to consumers are narrowing as larger companies fight back.
Ofgem – the regulator – tells us in its Consumer Survey 2016 that price is by far and away lead motivator in choosing an energy supplier: 79% say it’s the number one factor. Service is number two at 34%, with supplier reputation trailing in a low third with 11%.
Being green doesn’t even get a look in.
And here’s the thing: renewable electricity is often much more costly to buy than polluting brown power. Sometimes, green power can be as much as 20% per cent more expensive.
So, the Great British public may well be big fans of renewables, but they are fans of prudence more.
Maybe, it’s time for a change. Maybe, it’s time for an energy company that offers renewables at an affordable price. Green and good value. Now there’s an idea…
Sustainability Education 
Exciting stuff, Steven. Looking forward to affordable and green energy – I would definitely be happy to switch!
A couple of thoughts as a “millennial renter” from London:
– I have had no awareness on the availability of green energy. When I move flats, I stick to whichever energy company the flat comes with mostly because any possible savings does not seem commensurate to the hassle. However, if I did know domestic green energy existed (and the switch was not complicated), I would definitely go for this.
A couple of thoughts as a marketer:
– We have found the same issues in our industry in so much that most people would want to make the better, sustainable choice – but only as long as all the other benefits are equal. So bringing this to the same cost as “brown power” would be very promising. How you bring the cost down is something I am very interested to learn!
– As a suggestion, corporate accounts may be a convenient and “scaled” way to enter the market, especially those with a stronger sense of sustainability, (i.e. Unilever has committed to 100% clean energy by 2030).
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Hi Azure Planet,
Thank you for your interesting blog. I agree, it would be great if more people would use renewable energy. In my opinion, there are a few aspects in regards to renewable energy which could put people off.
In my opinion, renewable energy companies should not expect people to use renewable energy to reduce their carbon footprint, but instead make a smart investment, which will pay off on the long term, by decreasing monthly energy costs and increasing the value of the real estate. Win-Win situation!
As you pointed out, renewable energy such as solar panels or wind turbine are still expensive due to high labour, operational and maintenance/inspections costs. In addition, people could dislike renewable energy, such as solar panels and/or wind turbine due to its distinctive design and/or for blocking the view.
The billionaire visionary and inventor Elon Musk has recently presented a solar panel which could change the way people perceive renewable energy. In essence, Elon Musk is planning to offer solar panels which will look like, cost less and last longer than traditional roof panels. Obviously, the solar panels will also generate energy. In my opinion, the solar panels are a perfect example of renewable energy innovations which reduces the carbon footprint and at the same time minimise any negative impacts on the end-users (i.e. roof design, costs etc.).
Furthermore, I believe that we need to create more awareness about the possible utilisations of renewable energy. For example, households could use solar heating for water and home heating. Moreover, solar heating could also be used in many manufacturing processes.
All in all, I find this topic very fascinating and I’m look forward to your future blog posts. Besides that, it would be interesting to understand if your new renewable energy company will have a different approach to renewable energy.
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You hit the nail on the head. Price is a problem. A big problem. Too often, renewable energy offered in the retail space has a premium attached to it. This is not a problem that is exclusive to the UK. The same happens in the US. But price is not the only problem.
Lack of knowledge is a big problem. Not just with respect to the choice people make, but that many don’t even know that they have a choice. I think that if presented with a choice, and a simplified method of enrolling, so long as the price is equivalent, people would choose renewable energy roughly in proportion with the statistics you cite.
But back to price. We in the developed world do not see electricity as a luxury purchase. It is a necessity, a utility service, an expectation. When we enter a room and turn the light switch on we do not think about how electricity gets there or where it comes from. We just expect the light to come on.
And then we pay the bill. It is not a fun bill. It does not evoke memories of a purchase, or vacation. It is a dull, drab, utility bill that I must pay. I can understand why relatively few would voluntarily commit to paying more for exactly the same service.
Of course, businesses like yours will overcome that issue by eliminating the price differential between renewable and fossil-fueled energy.
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