Customer value of smart metering: Explorative evidence from a choice-based conjoint study in Switzerland

Abstract

Implementing smart metering is an important field for energy policy to successfully meet energy efficiency targets. From an integrated social acceptance and customerperceived value theory perspective we model the importance of customer value of smart metering in this regard. We further shape the model on a choice-based conjoint experiment with Swiss private electricity customers. The study finds that overall customers perceive a positive value from smart metering and are willing to pay for it. Further, based on a cluster analysis of customers' value perceptions, we identify four customer segments, each with a distinct value perception profile for smart metering. We find that energy policy and management should integrate a solid understanding of customer value for smart metering in their initiatives and consider different smart metering market segments within their measures.

Household valuation of smart-home functionalities in Slovenia

“…Realising the potential that the residential sector holds for energy savings may be compromised if aspects of consumer value and acceptance are disregarded (Kaufmann et al, 2013).…”

Demand-Side Flexibility for Energy Transitions: Policy Recommendations for Developing Demand Response

“…Thus, DR products and services must be aligned with consumer value perception. In an exploratory study, Kaufmann et al (2013) showed how individuals with heterogeneous value perceptions could be organised in four clusters: 'risk-averse', 'technology minded', 'price sensitive' and 'safety oriented'. Table 2 below shows the resulting range of product and service offerings that result from such segmentation.…”

Business Model Innovation for Local Energy Management: A Perspective from Swiss Utilities

“…Effective business models should cope with the consequent large customer segmentation offering more flexible and tailored solutions than in traditional energy-related business models. Based on the presented literature review, three main determinants related to customer socio-demographic aspects are selected: willingness to pay (Kaufmann et al, 2013;Sagebiel et al, 2014); customer awareness (Curtius et al, 2012;Kaufmann et al, 2013;Tabi et al, 2014); and building ownership (Sagebiel et al, 2014;Ebers and Wüstenhagen, 2015). These three determinants are explored hereafter.…”

“…Three different customer segments have been identified: The Supporters, including customers across all ages strongly supporting smart grids; The Ambiguous, characterized mainly by young customers willing to support smart grid diffusion but also concerned by data security issues; and The Skeptical, including mainly older customers not particularly concerned by environmental problems and expecting small benefits from smart grid. Kaufmann et al (2013) investigated the preference for smart metering of private consumers in Switzerland. Using conjoint analysis they assessed, on the one hand, the overall willingness of customers to pay for smart meters and, on the other hand, the existence of four customer segments with significantly different value perception: the risk averse, including customers not convinced on the benefit from smart meters; the technology minded, including customers perceiving a high value from smart metering; the price sensitive, including customers strongly concerned by the price and interested to reduce their costs with smart meters; and the safety oriented, including customers attracted by the values offered by smart meters associated with home security.…”

“…Willingness to pay Kaufmann et al (2013) and Sagebiel et al (2014) Table 10 Customer awareness Curtius et al (2012), Kaufmann et al (2013), and Tabi et al (2014) Table 11 Building ownership Sagebiel et al (2014) and Ebers and Wüstenhagen (2015) Macro-economy Hofman and Huisman (2012), Masini and Menichetti (2012), and Masini and Menichetti (2013) category a number of determinants have been selected. The LEM typology determinants have been derived from technical considerations based on the available scientific literature on distributed generation typologies aiming to generally cover all possible LEM typologies.…”