Energy in Scotland - Consumer Perspectives

Energy in Scotland: Consumer perspectives | April 2019 | Version 1 | Public
© 2016 Ipsos. All rights reserved. Contains Ipsos' Confidential and Proprietary information and may
not be disclosed or reproduced without the prior written consent of Ipsos.
1
Ipsos MORI
March 2019
Energy in Scotland:
© 2019 Ipsos. All rights reserved. Contains Ipsos' Confidential
and Proprietary information and may not be disclosed or
reproduced without the prior written consent of Ipsos.
Consumer perspectives

2Energy in Scotland: Consumer perspectives | April 2019 | Version 1 | Public
December 2017 saw the Scottish Government
launch its first Energy Strategy. Among six priority
areas set out in the strategy was consumer
engagement and protection
(along with energy efficiency; system security and
flexibility; innovative local energy systems; renewable
and low carbon solutions; and oil and gas industry
strengths).
Eighteen months on from the launch of the Strategy, we
take a look at what we have learned over the last few
years about Scottish consumers’ experiences, attitudes
and behaviours in respect of energy – including in
relation to affordability, switching, home energy
efficiency and support services for the vulnerable –
and challenges the Government faces in achieving its
vision.
Sara Davidson & Ciaran Mulholland
Energy and Environment Research
Ipsos MORI Scotland
Introduction

Energy in Scotland: Consumer perspectives | April 2019 | Version 1 | Public 3
The Cost of Energy

Source: Scottish Government 2018Base: 1,501 adults in Scotland
. 50%
of those earning £5,200-£15,599
per annum
65%
of those earning less
A quarter of Scots say they are struggling financially…
23%
38%
38%
are coping
are living
comfortably
are finding it
difficult to manage

Source: The Scottish Government (2018), Scottish House Condition SurveyBase: 2,939 households in Scotland
…and energy bills present particular challenges
“[I’m managing] ok, but it’s getting harder as
gas and electricity are going up all the time.”
(55-64 years old, urban area)
"It's not easy. Like I actually wouldn't be able to
afford [fuel]. I think I ran out of money last
week so had to phone my dad and say can I
borrow £30 for food, because I had completely
ran out of money.”
5%of households report they cannot
afford to heat their homes and
many more say it’s increasingly
difficult.

Source: Scottish Government (2018) Scottish House Condition Survey
A quarter of Scottish households remain in fuel poverty*…
*A household is in fuel poverty if, in order
to maintain a satisfactory heating regime,
it would be required to spend more than
10% of its income on all household fuel
use.

…most commonly older owner occupiers
& people living in flats/tenements

Source: Ipsos MORI & Professor Donald Hirsch /Citizens Advice Scotland (2016) The Poverty Premium in ScotlandBase: 1,000 adults in Scotland
30%of people on a low
income
1 in 5 Scots have experienced mental distress because
of difficulties paying bills
19%had experienced stress
or anxiety, rising to…..
57%of people in arrears

Switching

35%had switched telecoms supplier
Levels of switching in the energy market are low
24%of Scottish consumers had changed
energy supplier in the last three years,
while…

I'm not sure about when it tells you about
kilowatt and all that. I'm not really sure what
that all means, to be honest.
(55+, rural area)
I just don't really trust any of them. You
switch to one and then they put their prices
up and then the other one gets cheaper.
All the big companies are all bound to more
or less charge you the same… within a few
pounds or whatever, so I don’t really think it
would make much difference to me.
(55-64 years old, rural area)
Switching often seen as a hassle/confusing…
…and not particularly worthwhile…
47%
20%
17%
7%
6%
Happy with current
supplier
Switching is a
hassle
Have just never thought about it
No difference between suppliers
to make switching worthwhile
Changed to a cheaper deal with
current supplier
Q: Why have you not switched supplier in the last three years?

People on a low income are:
And there are signs of a ‘poverty premium’ in the market
Less likely to have
switched supplier
(19% versus 24%)
More likely to
perceive switching
as difficult
(24% versus 17%)
Less likely than high
earners to pay for
their energy via Direct
Debit (49% versus
71% average)
More likely to rely on
a pre-payment meter
(27% vs 17%)
More likely to have
experienced stress or
anxiety as a result of
difficulties paying
bills (30% versus 19%)

Home energy
efficiency

Source: Ipsos MORI/Scottish Government (2017) 2017 Scottish House Condition Survey
Scotland’s homes are increasingly energy efficient…

Source: The Scottish Government (2018), Scottish House Condition SurveyBase: 2,529 households in Scotland
…but work to do in promoting behavioural shift
18%report owning an energy
monitoring device
54%of households say they monitor their
energy use very or fairly closely
but just…

For many people energy efficiency just isn’t a priority…
Source: Ipsos MORI & Involve/Citizens Advice Scotland
(2017) Consumer Participation in Energy Policy
Q: “Improving the energy
efficiency of my home is
not really a priority for
me right now”
11%
38%
Strongly agree
Tend to agree
Base: 54 qualitative research participants
9%
16%
Strongly disagree
Tend to disagree

…so they are reluctant to spend on EE measures
Q: “Having to spend my
own money up front puts
me off investing in home
energy improvements,
even if there are savings
to be made”
Base: 54 qualitative research participants
33%
26%
Strongly agree
Tend to agree
9%
11%
Strongly disagree
Tend to disagree

64%
37%
35%
7%
7%
14%
10%
40%
37%
More likely No difference Less likely
A Pay-as-You-Save (PAYS) loan, which
enables owners to install energy
efficiency improvements at no upfront
costs, with repayments made through the
owner’s energy bill
An interest-free loan with a cashback
grant of 25% of the total costs of the
works
An equity loan or ‘green mortgage’,
which enables homeowners to borrow
against the value of their home
Support for potential financial incentives is limited
Q: Would any of these
financial incentive
options make you more
or less likely to take steps
to improve the energy
efficiency of your home?
Bases: 54, 53 and 52 qualitative
research participants respectively

Q: To what extent would
each of these make you
more or less likely to take
steps to improve the
energy efficiency of your
own home?
13%
16%
61%A reduction of £500 in my Council Tax for
1 year for moving my home into the next
£1000 off my Land and Buildings
Transactions Tax for implementing specific
energy improvements within 12 months of
purchasing a property
A reduction of £100 in my Council
Tax per year for 10 years for moving
my home by 2 EPC bands
Short term tax relief could prove more popular
Bases: 54, 37 and 52 qualitative
research participants respectively
% saying more likely

Vulnerable
consumers

Sources Ofgem (2018) Consumer Vulnerability Strategy: Reporting on Progress
*Databases held by energy companies that consumers can sign up to in order to receive additional (non-
financial) support – e.g. bills in accessible formats, advance warning of supply interruptions etc.
Uptake of priority service registers (PSRs)* has more
Number of electricity customers on a PSR
2014 2015 2016 2017
Scotland 232,646 273,627 345,599 485,582
GB 2,922,152 3,604,599 4,375,612 5,969,532
Number of gas customers on a PSR
2014 2015 2016 2017
Scotland 164,779 212,690 273,534 374,629
GB 2,293,109 2,985,188 3,663,464 4,758,524
than doubled since 2014

Source: Ipsos MORI/Citizens Advice Scotland (2018) Research into Simpler Registration for Consumers in Vulnerable Situations
…but low awareness of PSRs remains an issue
First of all, I didn't know they had all
these services. Second, I find out I am
entitled to them, and third, [I’ve] got to
register with them…If you don't know
where they are, how are you going to
register?.. It's absolutely shocking.”
I never heard of this before and I'm kind
of surprised that, having moved, three
years ago, I wasn't made aware of this.
I have heard [of priority service registers]
but only in terms of some friends I have
who are both quite physically disabled…
I knew they were on a register with their
electricity company.

• The cost of energy is a challenge for
many in Scotland – and a quarter of
households remain in fuel poverty
• One in five Scots have experienced
mental distress as a result of
difficulties paying bills
• Yet levels of switching in the energy
market are relatively low – particularly
among low income groups – and only
a minority of energy consumers
closely monitor their energy use
• Awareness of additional support for
consumers is also low, despite
increased uptake over recent years.
Key challenges going forward

www.ipsos-mori.com/
Sara Davidson Ciaran Mulholland
0131 226 8673
Sara.Davidson@ipsos.com
0131 226 8673
Ciaran.Mulholland@ipsos.com

Energy in Scotland - Consumer Perspectives

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