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IBM Survey: Consumers Will Pay More for Environmentally Friendly Energy Options

Lack of Options, Limited Knowledge May Be Hindering Consumer Action

ARMONK, NY - 13 Dec 2007: According to a new IBM (NYSE: IBM) survey, the majority of consumers in developed nations are willing to pay more for eco-friendly energy. The study also reveals a paradox: consumers clearly want more choices about the type of energy they buy, but are unaware of the range of options available to them.

Although nearly half of consumers surveyed across the globe would pay more for environmentally friendly non-energy products, when it comes to purchasing "green" energy, two-thirds of consumers are willing to pay more for power that could be definitively shown to have lower emissions of greenhouse gases. Australians are most willing to pay a premium for green power, but Americans are most willing to pay a sizable premium, up to an additional 20 percent or more.


Tilting Towards Windmills: a new global IBM survey found that 2/3 of consumers are willing to pay more for power sources that emit lower greenhouse gas emissions. Climate change concerns are driving strong interest in renewable energy, such as wind and solar: 1/4 of consumers who have renewable power options purchase renewable power, and 62% who do not have renewable power options said they would like to do so. Photo by (C) Marco Cristofori/Corbis.

"The emergence of climate change as broad public concern has galvanized people to an extent seldom seen for issues involving their energy providers," said Michael Valocchi, Global Energy and Utilities Industry Leader, IBM Global Business Services. "Historically, consumers didn't care about energy. This survey suggests that they want to engage and make a more personal connection to it."

Overall, consumers want to be more active in their energy decision-making; however, they do not appear to have enough awareness and knowledge to do so. While carbon footprints and other analyses of personal environmental impact have attracted widespread attention, 75 percent of consumers surveyed outside the U.S. have not performed one -- and only 15 percent of US consumers have done this. Most consumers want the option to choose their electric or gas utility provider (83 percent of those surveyed), but the majority reported either they cannot or do not know they can. Finally, a full one quarter of consumers who have renewable power options available to them actually purchase renewable power, and most of those who do not have renewable power options (65 percent) said they would like the option to do so.

The survey also found that the promise of reduced energy costs would impact how and when consumers heat and cool their homes, do their laundry and cook their meals. Of those surveyed, 84 percent said that a 50 percent reduction in energy cost during off-peak hours was the most important. Sixty-one percent would change their energy-consuming behavior in response to claims that there would be a positive environmental impact from such changes, and this would rise to 65 percent if such benefits could be demonstrated.

These survey results are part of a new report, recently released by IBM Global Business Services, titled, "Plugging in the Consumer: Innovating utility business models for the future." The report forecasts how the change in energy customers' expectations will impact the utility industry's business model in the next five to ten years, and predicts a steady progression toward a Participatory Network where consumers actively "plug in" to their energy decisions to a degree not seen before.

As part of its ongoing consumer research efforts, IBM is making the full survey results available for free download at: www.ibm.com/energy/plugin. In addition, the complete "Plugging in the Consumer" report, with detailed recommendations for energy companies on how they can best prepare for a world where consumers actively 'plug in,' can be found via the same link.

IBM Survey Methodology
The IBM Institute for Business Value Energy Customer Survey posed 21 multi-part questions to 1,894 primary bill payers in households located in six countries (Australia, Germany, Japan, the Netherlands, the United Kingdom and the United States). The online research was conducted by Zoomerang on behalf of IBM during June and July 2007.

About IBM:
For more information about IBM Energy & Utilities Industry, please visit: www.ibm.com/energy.

Contact(s) information

Natalie Fine
IBM Energy Industry Media Relations
+1-917-472-3403
natalie.fine@us.ibm.com

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