There are a number of reasons why Australia has been targeted as a key global market for the uptake of residential battery storage – and why it is already a world-leading market for rooftop solar.
But the findings of a recent survey has underscored perhaps the most important of them all: people have had a gutful of high and unpredictable electricity prices.
And not just that; they seem also to have lost faith in the ability of the key market players and regulators to fix the problem, so they are taking matters into their own hands.
That is the general sentiment of the Energy Consumer Sentiment Survey 2016, the data from which was released last week by by Energy Consumers Australia – a not-for-profit group set up last year by the COAG Energy Council “to advocate on energy market matters of strategic importance and material consequence for energy consumers.”
To observers of the industry – and even to many of the incumbent players – it’s not a particularly surprising result. Consumers are the new battleground. Tellingly, the ECA survey is believed to be the first of its kind to poll the satisfaction of Australian energy users with service providers.
But the survey’s findings deserve closer attention. So here’s a detailed look at three of the major themes the survey turned up:
1. Australian energy consumers are least satisfied with value for money of electricity services
Of all the state’s and territories in Australia, NSW was the only one where more than 50 per cent of respondents (52%) positively rated value for money for their electricity service. Elsewhere it was 44 per cent for WA, 45 per cent for South Australia, 29 per cent in Tasmania, 49 per cent in Victoria 48 per cent in the ACT, and 43 per cent for Queensland (no result for NT).
“Most consumers believe they are not getting value for money for their energy services,” said ECA chief Rosemary Sinclair in an emailed statement to One Step Off The Grid on Monday.
“A high proportion of consumers do not believe the energy market is working for them and they do not expect value for money to improve in the future.
“That more energy consumers than not believe they’re getting better value for money from their banking, insurance, mobile phone and internet service providers – must focus the attention of the sector.”
2. There is significant doubt that the market, both industry and regulators, is working in the interest of consumers
The survey says that while consumers feel confident in their own abilities to choose the right energy products and services for their needs, they are less confident that they have all the information available to help them make these decisions.
This is illustrated in the graph below. But perhaps a more striking illustration of this point comes from elsewhere in the survey where, when asked about uptake of energy management technologies, almost two-thirds of Victorian respondents said they did not have time-of-use meters.
This is noteworthy, as the ECA points out, because almost all households in that state do actually have smart meters, after a Victorian government-sponsored rollout.
And “given that 23 per cent of Victorian households said they want a time-of-use meter in the future, despite actually having one now, the key task here seems to be educating Victorian consumers on the benefit of their existing smart meters.” Indeed it does.
As Rosemary Sinclair put it: “The fact that consumers have faced very significant price rises in the last few years, but haven’t seen a noticeable improvement in customer service or reliability would certainly seem to be leaving people with a scepticism about the market.
“The survey also suggests that there are barriers that stand in the way of people making choices that are the source of frustration.
“We then see this playing out in the survey results around switching, where 60 per cent of households have considered switching in the last three years, but only approximately 20 per cent actually switched.”
And there is a message for regulators, too.
“Even in competitive market states, there were quite high numbers of consumers who said the reason they hadn’t shopped around for a better deal in the energy market was that there were no real alternatives or that the barrier to switching was too high,” says Sinclair. “That is a concern for a competitive market and is something regulators need to take seriously.”
3. People are investing in – or planning to – technologies like rooftop solar and battery storage, with or without subsidies
This is where things get really interesting. The ECA survey found that the proportion of households with rooftop solar and/or solar hot water could double in most states and territories, based on people’s responses.
This potential was generally greater in states and territories where the penetration was relatively low, such as Victoria and Tasmania, but was also substantial in the states where many people already had it, like South Australia and Queensland
Considering Australia already has one of the highest per capita rates of uptake for rooftop solar in the world, this is no small thing.
Right now, the rooftop solar market is experiencing a bit of a lull in activity, as subsidies are wound back and the early adopter market is exhausted. But there is still plenty of room for growth – low-income housing, new-build housing and rental properties are just a few untapped residential markets that spring to mind.
In Victoria, for example, 17 per cent of people surveyed said they have rooftop solar panels at the moment, while 38 per cent said they were considering getting it in the future.
In South Australia, 32 per cent said they had it, 36 per cent said they were considering it for the future.
And of the home renters surveyed, 35 per cent said they were considering getting rooftop solar panels at some point in the future.
The potential for growth among small business consumers was also found to be substantial, with only 16 per cent saying they already had rooftop solar panels, and 48 per cent found to be considering it for the future.
On battery storage, the survey’s findings reflected “solid interest” in the technology, especially, as has been predicted, among those households with solar panels.
According to ECA, 36 per cent of respondents currently considering battery storage already had solar
panels. While more than half, 53 per cent, of those who already had solar panels said they were considering battery storage.
Another 60 per cent of respondent who were considering getting solar panels were also considering getting battery storage.
For businesses, the survey found only 2 per cent of SMEs had installed battery storage, but nearly half – 45 per cent – said they were considering getting it.
The big picture
So what does it all mean? Do the results suggest that the current energy market structure and business model is broken?
“We have a market where consumers are not seeing value from their electricity service providers, so they are looking elsewhere to find value,” said Sinclair.
“Some are choosing to install their own generation through solar and battery storage, while others are looking for new models of electricity supply and service provision.
“Consumers are already driving a transformation in the market and the electricity industry is facing the prospect of substantial disruption – from outside the traditional, regulated ‘market’ as we’ve seen in other industries such as telecommunications and music.
“Companies like Apple, Google and others can see there is friction in the market and that they can start addressing consumers’ needs.
“Service providers – whether they are current energy retailers of others – need to come to the table with innovation that is centred around consumers’ needs.
“And regulators have a big job to do so that those consumer driven changes are embraced and accounted for in the regulatory framework, in a way which serves the long term interests of consumers.”