Two energy suppliers are better than one: Survey experiments on consumer engagement with local energy in GB

Abstract

Usually consumers have a relationship with a single energy supplier. Increasingly, the option for consumers to retain their current supplier whilst taking on additional contracts with local suppliers is viewed as having the potential to support growth of local renewable energy. This study took a behavioural economic approach and conducted two pre-registered nationally representative survey experiments (n=1042, n=762). The main aims of the study were to assess the attractiveness of a multiple supplier model for British consumers and to understand the role of default effects and associated cognitive biases (loss-aversion, cognitive effort and implied endorsement) in consumers' decisions to remain with incumbent suppliers. Results showed that participants were significantly more likely to engage with local energy suppliers under a multiple supplier model than the current single supplier model. In one experiment, consumers' preference for adding a local supplier under a multiple supplier model was so strong that it overcame default effects. The perception that the supplier has been recommended (i.e. implied endorsement) was the most robust mechanism associated with remaining with default suppliers, suggesting that explicit endorsement of local suppliers may encourage engagement with the energy market. These findings suggest findings suggest that multiple supplier models are likely to be a promising avenue for driving the growth of local energy and opening opportunities for innovation in the British energy market. Highlights • Two nationally representative survey experiments in Britain showed significantly higher engagement with local energy in a multiple supplier model than a single supplier model • Implied endorsement of the multiple supplier model had a positive and statistically significant association with engaging with this model • Offering consumers multiple energy suppliers is likely to be beneficial for driving uptake of local energy suppliers

Switching Behavior in the Polish Energy Market—The Importance of Resistance to Change

“…It is worth noting that our analysis was carried out under the assumption that consumers have a single energy supplier. However, interesting research exists beyond this typical condition [89]. Finally, we are also aware of the intention-behavior gap that has been identified in the scientific literature [25].…”