TODAY’S STUDY: WHAT PEOPLE THINK ABOUT NEW ENERGY

Energy & Environment Consumer Survey; Consumer Attitudes and Awareness about 13 Clean Energy Concepts
Charul Vyas and Clint Wheelock, 1Q 2012 (Pike Research)

EXECUTIVE SUMMARY

Introduction

Pike Research conducted a web-based consumer survey of more than 1,000 U.S. adults, based on a nationally representative and demographically balanced sample, during the fourth quarter of 2011. As part of that survey, to better understand consumer attitudes about energy and environmental concepts, Pike Research asked respondents to rate their impressions of 13 specific topics…Solar energy…Wind energy…Clean coal…Nuclear power…Hybrid vehicles…Biofuels…Electric cars…Natural gas cars…Smart grid…Smart meters…Carbon offsets/credits…Cap and trade…[and] LEED certification…

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Key Findings

• With more than three-quarters of respondents (77%) favoring the concept, solar energy led in terms of favorable responses

• Cap and trade received the fewest favorable responses, with only 14%

• Carbon credits/offsets, nuclear power, and cap and trade garnered the most unfavorable reactions with 25%, 23%, and 22%, respectively, while solar and smart grid had the smallest percentage of negative responses (6% each).

• Consumers were least familiar with LEED certification, with 45% of respondents reporting that they were “not sure/not familiar” with the concept. In contrast, solar energy and hybrid vehicles were recognizable to nearly all consumers.

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Comparison to 2009 and 2010 Surveys

Favorable Rating Comparisons

One of the most interesting trends in the 2010 and 2011 editions of Pike Research’s Energy & Environment Consumer Survey was the eroding support among consumers for clean energy concepts.

Favorable ratings deteriorated for several key concepts over the three editions of the survey. Overall, the average favorable rating of clean energy concepts fell from 50% in 2009 to 43% in 2011, with the most significant drop occurring between 2009 and 2010. Pike Research did not probe consumers on why they responded as they did.

Biofuels suffered the most precipitous decline in favorability, dropping 17 points from 56% in 2009 to 39% by 2011. Favorability ratings of Smart Grid and Clean Coal were tied for the second largest decline, each falling 10 points over the two-year period.

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Unfavorable Rating Comparisons

Similarly, the 2011 survey indicated a general increase in “strongly” or “somewhat” unfavorable ratings, particularly compared to the 2009 survey. The increase in unfavorable ratings was not outside the margin of error in any year-over-year comparison, however there was a significant increase for the total period between 2009 and 2011.

The increase in unfavorable ratings was not as steep as the decrease in favorable ratings shown in Table 1.1, suggesting that consumer support for clean energy concepts is waning, but is not necessarily turning into animosity.

Nuclear Power and Electric Cars were tied for the largest increase in unfavorable ratings, with each concept having a 7-point uptick in unfavorable scores. Carbon Offsets/Credits increased 5 points from 20% unfavorable in 2009 to 25% unfavorable by 2011.

CLEAN ENERGY

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Solar Energy

As was depicted in Charts 1.1 and 1.2, solar energy garnered both the highest percentage of favorable opinions (77%) and the lowest percentage of unfavorable opinions (6%) among the 13 energy and environmental concepts included in the survey. Moreover, solar energy also received the smallest percentage of “neutral” (14%) and “not sure/not familiar” (4%) responses. Chart 2.1 illustrates the specific breakdown of consumer impressions for this concept.

With a majority of respondents (47%) indicating a “very favorable” impression, solar energy represents one of the least controversial green technologies in the eyes of consumers.

Pike Research attributes the high level of consumer acceptance to the relatively long history of solar energy in the market, its variety of applications, and the non-intrusive nature of most solar technologies including photovoltaic (PV) panels.

Pike Research’s demographic analysis of responses to the solar energy concept revealed few distinct trends, as shown in Chart 2.2 below. The high levels of favorable impressions across gender, income, education, and age segments suggest that it enjoys widespread appeal from the mass market. Additionally, while favorable opinions were high among all education segments, those with the highest level of education had the highest favorable rating for solar energy (87%) and those with the lowest exhibited a distinctly lower percentage of favorable responses (58%). It should be noted that the sample size of the “less than high school” education segment was small (only 23 respondents). This erodes the credibility of the correlation between finishing high school and favoring solar energy.

However, with levels of favorability slightly lower in the “high school graduate” segment than the more educated segments, the positive correlation between education and a favorable view of solar energy is more pronounced than in other demographic categories. In addition, this finding is consistent with previous Pike Research Energy & Environment Consumer Survey, which showed similar trending.

Another interesting demographic correlation exists across age segments. Surprisingly, older respondents were more likely to have a favorable view of solar energy than younger respondents were. While it is commonly assumed that younger consumers are more enthusiastic about renewable energy technologies, the percentage of favorable responses in the “under 30” age segment was 8 points lower than in the “45-64” segment. However, the oldest age segment (“65 or older”) exhibited the lowest percentage of favorability toward solar energy (64%).

A segmentation analysis based on behavioral trends, such as respondents’ monthly spending on electricity and self-identification in the tech adopter lifecycle, revealed no significant tendencies aside from “laggards.” As shown in Chart 2.3, favorability levels varied across monthly electric spending segments and differences between segments in other categories were insignificant. Similar to the lack of correlations across demographic segments, this implies that the benefits of solar energy are equally appealing to consumers regardless of differences in energy consumption, home ownership status, and rate of uptake for new technologies.

While the merits of some clean technologies have yet to be established in the minds of consumers, solar energy has reached a point where the vast majority of consumers view it in a positive light. This bodes well for an increase in solar power generation to meet the growing energy demands in the United States.

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Wind Energy

Only slightly less popular than solar energy, wind energy was viewed as either “favorable” or “very favorable” by 71% of respondents. Similarly, wind energy was second only to solar energy in terms of the smallest percentage of unfavorable responses (5%). The preceding chart, Chart 2.4, displays these results along with the breakdown of the remaining responses. The similarly high levels of favorable views toward solar and wind energy indicates that consumers are generally supportive of the more established renewable energies that harness naturally occurring power sources. Pike Research asserts that consumers consider these two renewable energies to be important pieces in the power generation portfolio of the future.

Demographic patterns in consumer views of wind energy are analogous to those of solar energy. As shown in Chart 2.5, the education and age categories exhibit the most significant impact on consumers’ views of wind energy. Once again, the “less than high school” segment displayed a significantly lower percentage of favorable responses (50%) and the “high school graduate” segments displayed a slightly lower (62%) percentage than the more educated segments. The “45-64” age grouping exhibited the highest positive correlation with wind energy (77%), while the top (“65 and older”) and bottom (“under 30”) groupings were least enthusiastic about wind energy (66% and 68%, respectively).

Also similar to solar energy, behavioral segmentation analysis shows that monthly spending on electricity has less of an impact on a respondent’s attitude toward wind power than their rate of uptake for new technologies.

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Clean Coal

Consumer impressions of clean coal were less favorable than the renewable energy concepts covered: 42% of the respondents indicated a “very favorable” or “favorable”
impression of clean coal, a decrease of 5% from Pike Research’s previous survey. Additionally, this concept ranked fifth in terms of unfavorable impressions (12%).

Among clean energy concepts, consumers were the least familiar with clean coal (18%). Unlike the renewable energy concepts, a significant number of respondents reported a neutral (28%) impression of clean coal.

When demographic information is applied to consumer attitudes toward this particular concept, some interesting variations come into view. As displayed in Chart 2.8, men had a more favorable view of clean coal than women (48% compared to 37%). In addition, favorability varied by age group, with older respondents reporting more favorable opinions. Only 39% of the “under 30” segment showed favorable views on clean coal and only 40% of respondents in the “30-44” and “45-64” groupings viewed it favorably, yet more than half of the “65 and older” segment reported a favorable view on the concept.

Certain behavioral trends also play a role in a consumer’s view of clean coal, as illustrated in Chart 2.9. Consumers who indicated that they are early adopters of new technologies showed significantly higher levels of favorable responses (54%) than the entire sample (42%). In addition, those with electric bills between $100 and $200 also held more favorable views of clean coal.

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Nuclear Power

Among the clean energy concepts covered, nuclear power is the most controversial to consumers. Of the clean energy concepts, it received the smallest percentage of favorable responses (40%). Moreover, nuclear power garnered the largest percentage of unfavorable responses (23%) among all 13 concepts covered in the survey, and it inspired the largest percentage of neutral responses (29%).

Opinions of nuclear power vary significantly depending on the consumer’s demographics. As shown in Chart 2.11, clear correlations exist within each demographic category. The most notable differences can be found across gender, with just over one-quarter of women (28%) and more than one half of men (52%) holding favorable views of nuclear energy.

There is also a wide divide when age groups are examined. The younger age groups (“under 30” and “30-44”) hold less favorable opinions of nuclear power than older age groups (“45-65” and “65 and older”). In fact, the 65 and older segment represented the greatest percentage of favorable impressions toward nuclear energy (56%). Notably though, this percentage is significantly lower than in Pike Research’s previous survey, when 72% of respondents in the 65 and older segment reported a favorable impression of nuclear energy.

There is also a clear positive correlation between level of education and favorability toward nuclear power: The percentage of favorable responses increases along with the level of education across segments. A similarly positive correlation exists across income segments: More than half of respondents (54%) earning more than $75,000 per year had a favorable impression of nuclear power, while only 32% of those earning less than $35,000 expressed this view.

Behavioral tendencies are weaker indicators of favorability toward nuclear power. However, more than one-half of respondents with an electric bill higher than $200 a month held positive impressions of nuclear energy. Those consumers who identified themselves as “laggards” in the technology adoption curve, and those with electric bills less than $100 a month, were less enthusiastic about the concept.

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CLEAN TRANSPORTATION…Hybrid Vehicles… Biofuels… Electric Cars… Natural Gas Cars…

SMART GRID…Smart Grid… Smart Meters…

CARBON MANAGEMENT…Carbon Offsets/Credits… Cap and Trade…

BUILDING EFFICIENCY…LEED Certification…

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SUMMARY AND CONCLUSIONS

Clean Energy

Consumer opinions of the clean energy concepts were generally positive. All four concepts (solar, wind, clean coal, and nuclear) received favorable responses from at least 40% of respondents. Most notably, the two renewable energy concepts, wind and solar, continued to garner favorable opinions by more consumers than any other topic included in the survey. The non-renewable clean energy concepts, clean coal and nuclear power, did not enjoy the same level of enthusiasm from the respondent base. Nuclear power also earned the highest percentage of unfavorable and neutral responses among all energy and environmental concepts.

Of the four clean energy concepts, consumers were the least familiar with clean coal: 15% of respondents selected “not sure/not familiar” for this concept. These results reveal that solar and wind power have reached a point of mass appeal among consumers. Clean energy concepts that do not utilize renewable resources are less likely to appeal to the vast majority of consumers.

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Clean Transportation

Clean transportation concepts are also well received by consumers, though not quite to the same extent as solar and wind energy. More than half of all respondents reported favorable impressions of hybrid vehicles, electric cars, and natural gas vehicles. Biofuels were favored by less than one-fourth of respondents (39%) and received the highest incidence of unfamiliar responses (15%) among the clean transportation concepts.

The popularity of hybrid and electric vehicles is not surprising given the extensive advertising and publicity campaigns for cars like the Toyota Prius, Nissan Leaf, and Chevy Volt. An interesting note is that natural gas powered vehicles received a similar favorability rating despite their being largely limited to commercial vehicles.

Within the various demographic splits, it is the higher-educated and higher-income consumers that continue to report the greatest rates of favorability toward clean transportation. The marketing messages for these alternative-fuel cars focus on the environmentally friendly benefits of fewer gas emissions. With gas prices likely to fluctuate within the United States in coming years, consumers are likely to be drawn to the potential cost savings offered by such vehicles as well as their low impact on the environment.

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Smart Grid

Consumer reactions to smart grid and smart meter concepts appear less favorable; these topics garnered smaller percentages of favorable responses than the clean energy and transportation topics. However, a closer review reveals that few consumers hold an unfavorable view of the smart grid or smart meters (less than 10%). In fact, all four clean transportation concepts and both carbon management topics received higher percentages of unfavorable responses than either of the smart grid concepts.

As with carbon management and building efficiency topics, what stood out in the survey results for the smart grid and smart meters was the high number of respondents reporting they were unfamiliar with the concepts. Approximately one-third of consumers selected form an opinion. In general it was the higher-educated, higher-income-earning male respondents that reported the highest rates of favorable impressions for smart grid technologies. With a limited number of smart meter installations, consumers are still learning about the energy-saving potential of smart grid technologies.

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Carbon Management

Lagging behind nearly all other concepts in terms of favorable responses, the concepts dealing with carbon management (cap and trade, carbon offsets/credits) did not garner a high level of favorable responses by survey respondents. Additionally, this was accompanied by relatively high percentages of unfavorable and unfamiliar responses. This consumer reaction is interesting given that these concepts are designed to be utilized by businesses; it may be that some negative media coverage has drawn consumer attention to these topics.

Carbon credits proved to be among the least favored concepts, with 25% of consumers reporting an unfavorable rating and 19% reporting a favorable rating. In addition, nearly one-third of respondents were unfamiliar with the concept. Cap and trade fared nearly as poorly, with a 22% unfavorable rating, a meager 14% favorable rating, and 36% of respondents stating they were unfamiliar with the concept.

Two noticeable demographic notes emerged from a closer examination of carbon management: Both cap and trade and carbon offsets/credits were better received by younger consumers and consumers in the higher income level.

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Building Efficiency

The only building efficiency topic included in the survey was LEED certification. Consistent with previous Energy and Environment Consumer Surveys, consumers continue to state that they are not acquainted with the concept. Pike Research believes this is because green building certification programs such as LEED have yet to draw significant attention outside of the real estate industry and penetrate the mass market.

With nearly three-fourths of respondents reporting an unfavorable or neutral impression of LEED (45% unfamiliar and 29% neutral), it is clear that a greater emphasis needs to be placed on educating end users about the topic and its benefits. A closer examination shows early adopters and higher-income earners as the most aware of LEED certification; these two segments also report higher rates of favorable opinions of the concept.

While this low level of familiarity among the general population is challenging, a positive finding is that consumers do not generally hold adverse opinions on the concept, meaning there are relatively fewer negative views to overcome.