IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v157y2022ics1364032121012776.html
   My bibliography  Save this article

Segmenting household electricity customers with quantitative and qualitative approaches

Author

Listed:
  • Barjak, F.
  • Lindeque, J.
  • Koch, J.
  • Soland, M.

Abstract

Understanding private electric utility customers is essential given their central role in the sustainability transition of the electricity system. Socio-economic attributes, environmental attitude, and electricity consumption are not enough to take the new technological, economic and regulatory bases of the residential electricity markets in many industrialized countries into account. Further attributes can help to obtain a more holistic understanding of the private electricity customer. We conduct three studies and find a good correspondence of the customer segments resulting from a survey of the literature, an expert workshop, and a survey of Swiss electricity customers. Five key customer segments are distinguished: 1) affluent and quality-oriented, 2) ecologically aware, 3) technophile, 4) regionally rooted, and 5) stable and uninterested. Due to their unique energy preferences, these customer segments represent critical boundary conditions for technology adoption driven sustainability transitions. Assessment of the strengths and weaknesses of the segmentation methods suggest that with sufficient resources a combination can produce reliable and valid segments.

Suggested Citation

  • Barjak, F. & Lindeque, J. & Koch, J. & Soland, M., 2022. "Segmenting household electricity customers with quantitative and qualitative approaches," Renewable and Sustainable Energy Reviews, Elsevier, vol. 157(C).
    • Handle: RePEc:eee:rensus:v:157:y:2022:i:c:s1364032121012776
    DOI: 10.1016/j.rser.2021.112014
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1364032121012776
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.rser.2021.112014?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zhou, Bin & Li, Wentao & Chan, Ka Wing & Cao, Yijia & Kuang, Yonghong & Liu, Xi & Wang, Xiong, 2016. "Smart home energy management systems: Concept, configurations, and scheduling strategies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 61(C), pages 30-40.
    2. Ivan Diaz‐Rainey & John K. Ashton, 2011. "Profiling potential green electricity tariff adopters: green consumerism as an environmental policy tool?," Business Strategy and the Environment, Wiley Blackwell, vol. 20(7), pages 456-470, November.
    3. Zhang, Lei & Wu, Yang, 2012. "Market segmentation and willingness to pay for green electricity among urban residents in China: The case of Jiangsu Province," Energy Policy, Elsevier, vol. 51(C), pages 514-523.
    4. Azadeh Shomali & Jonatan Pinkse, 2016. "The consequences of smart grids for the business model of electricity firms," Post-Print hal-02022695, HAL.
    5. Snyder, Hannah, 2019. "Literature review as a research methodology: An overview and guidelines," Journal of Business Research, Elsevier, vol. 104(C), pages 333-339.
    6. Hache, Emmanuel & Leboullenger, Déborah & Mignon, Valérie, 2017. "Beyond average energy consumption in the French residential housing market: A household classification approach," Energy Policy, Elsevier, vol. 107(C), pages 82-95.
    7. Vanessa Apaolaza Ibáñez & Patrick Hartmann & Pilar Zorrilla Calvo, 2006. "Antecedents of customer loyalty in residential energy markets: Service quality, satisfaction, trust and switching costs," The Service Industries Journal, Taylor & Francis Journals, vol. 26(6), pages 633-650, September.
    8. Rundle-Thiele, Sharyn & Paladino, Angela & Apostol Jr., Sergio Antonio G., 2008. "Lessons learned from renewable electricity marketing attempts: A case study," Business Horizons, Elsevier, vol. 51(3), pages 181-190.
    9. Dibb, S. & Stern, P., 1995. "Questioning the reliability of market segmentation techniques," Omega, Elsevier, vol. 23(6), pages 625-636, December.
    10. Al-Sunaidy, A. & Green, R., 2006. "Electricity deregulation in OECD (Organization for Economic Cooperation and Development) countries," Energy, Elsevier, vol. 31(6), pages 769-787.
    11. Sardianou, E. & Genoudi, P., 2013. "Which factors affect the willingness of consumers to adopt renewable energies?," Renewable Energy, Elsevier, vol. 57(C), pages 1-4.
    12. Corinne Post & Riikka Sarala & Caroline Gatrell & John E. Prescott, 2020. "Advancing Theory with Review Articles," Journal of Management Studies, Wiley Blackwell, vol. 57(2), pages 351-376, March.
    13. Pepermans, G. & Driesen, J. & Haeseldonckx, D. & Belmans, R. & D'haeseleer, W., 2005. "Distributed generation: definition, benefits and issues," Energy Policy, Elsevier, vol. 33(6), pages 787-798, April.
    14. Hahsler, Michael, 2017. "An experimental comparison of seriation methods for one-mode two-way data," European Journal of Operational Research, Elsevier, vol. 257(1), pages 133-143.
    15. Torsten J. Gerpott & Ilaha Mahmudova, 2010. "Determinants of price mark‐up tolerance for green electricity – lessons for environmental marketing strategies from a study of residential electricity customers in Germany," Business Strategy and the Environment, Wiley Blackwell, vol. 19(5), pages 304-318, July.
    16. Tabi, Andrea & Hille, Stefanie Lena & Wüstenhagen, Rolf, 2014. "What makes people seal the green power deal? — Customer segmentation based on choice experiment in Germany," Ecological Economics, Elsevier, vol. 107(C), pages 206-215.
    17. Kaufmann, Simon & Künzel, Karoline & Loock, Moritz, 2013. "Customer value of smart metering: Explorative evidence from a choice-based conjoint study in Switzerland," Energy Policy, Elsevier, vol. 53(C), pages 229-239.
    18. Richter, Mario, 2013. "Business model innovation for sustainable energy: German utilities and renewable energy," Energy Policy, Elsevier, vol. 62(C), pages 1226-1237.
    19. Richter, Mario, 2012. "Utilities’ business models for renewable energy: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(5), pages 2483-2493.
    20. World Commission on Environment and Development,, 1987. "Our Common Future," OUP Catalogue, Oxford University Press, number 9780192820808, Decembrie.
    21. Verbong, Geert P.J. & Beemsterboer, Sjouke & Sengers, Frans, 2013. "Smart grids or smart users? Involving users in developing a low carbon electricity economy," Energy Policy, Elsevier, vol. 52(C), pages 117-125.
    22. Van de Velde, Liesbeth & Verbeke, Wim & Popp, Michael & Buysse, Jeroen & Van Huylenbroeck, Guido, 2009. "Perceived importance of fuel characteristics and its match with consumer beliefs about biofuels in Belgium," Energy Policy, Elsevier, vol. 37(8), pages 3183-3193, August.
    23. Sütterlin, Bernadette & Brunner, Thomas A. & Siegrist, Michael, 2011. "Who puts the most energy into energy conservation? A segmentation of energy consumers based on energy-related behavioral characteristics," Energy Policy, Elsevier, vol. 39(12), pages 8137-8152.
    24. Ferreira, Helder Lopes & Garde, Raquel & Fulli, Gianluca & Kling, Wil & Lopes, Joao Pecas, 2013. "Characterisation of electrical energy storage technologies," Energy, Elsevier, vol. 53(C), pages 288-298.
    25. Burger, Scott P. & Luke, Max, 2017. "Business models for distributed energy resources: A review and empirical analysis," Energy Policy, Elsevier, vol. 109(C), pages 230-248.
    26. Ibrahim, H. & Ilinca, A. & Perron, J., 2008. "Energy storage systems--Characteristics and comparisons," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(5), pages 1221-1250, June.
    27. Green, Richard, 2006. "Electricity liberalisation in Europe--how competitive will it be?," Energy Policy, Elsevier, vol. 34(16), pages 2532-2541, November.
    28. Han, Q. & Nieuwenhijsen, I. & de Vries, B. & Blokhuis, E. & Schaefer, W., 2013. "Intervention strategy to stimulate energy-saving behavior of local residents," Energy Policy, Elsevier, vol. 52(C), pages 706-715.
    29. Wiser, Ryan H., 2007. "Using contingent valuation to explore willingness to pay for renewable energy: A comparison of collective and voluntary payment vehicles," Ecological Economics, Elsevier, vol. 62(3-4), pages 419-432, May.
    30. Jägemann, Cosima & Fürsch, Michaela & Hagspiel, Simeon & Nagl, Stephan, 2013. "Decarbonizing Europe's power sector by 2050 — Analyzing the economic implications of alternative decarbonization pathways," Energy Economics, Elsevier, vol. 40(C), pages 622-636.
    31. Valérie Mignon & Emmanuel Hache & Déborah Leboullenger, 2017. "Beyond average energy consumption in the French residential market: A household classification approach," Post-Print hal-01549810, HAL.
    32. Jamasb, Tooraj & Pollitt, Michael, 2008. "Liberalisation and R&D in network industries: The case of the electricity industry," Research Policy, Elsevier, vol. 37(6-7), pages 995-1008, July.
    33. Hannon, Matthew J. & Foxon, Timothy J. & Gale, William F., 2013. "The co-evolutionary relationship between Energy Service Companies and the UK energy system: Implications for a low-carbon transition," Energy Policy, Elsevier, vol. 61(C), pages 1031-1045.
    34. Römer, Benedikt & Reichhart, Philipp & Kranz, Johann & Picot, Arnold, 2012. "The role of smart metering and decentralized electricity storage for smart grids: The importance of positive externalities," Energy Policy, Elsevier, vol. 50(C), pages 486-495.
    35. Giordano, Vincenzo & Fulli, Gianluca, 2012. "A business case for Smart Grid technologies: A systemic perspective," Energy Policy, Elsevier, vol. 40(C), pages 252-259.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hampton, Harrison & Foley, Aoife, 2022. "A review of current analytical methods, modelling tools and development frameworks applicable for future retail electricity market design," Energy, Elsevier, vol. 260(C).
    2. Alicja Małgorzata Graczyk & Marta Kusterka-Jefmańska & Bartłomiej Jefmański & Andrzej Graczyk, 2023. "Pro-Ecological Energy Attitudes towards Renewable Energy Investments before the Pandemic and European Energy Crisis: A Segmentation-Based Approach," Energies, MDPI, vol. 16(2), pages 1-29, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brown, Donal & Hall, Stephen & Davis, Mark E., 2019. "Prosumers in the post subsidy era: an exploration of new prosumer business models in the UK," Energy Policy, Elsevier, vol. 135(C).
    2. Niesten, Eva & Alkemade, Floortje, 2016. "How is value created and captured in smart grids? A review of the literature and an analysis of pilot projects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 629-638.
    3. Michael Hamwi & Iban Lizarralde, 2019. "Demand-side management and renewable energy business models for energy transition A systematic review," Post-Print hal-02448505, HAL.
    4. Lowitzsch, Jens & Kreutzer, Kaja & George, Jan & Croonenbroeck, Carsten & Breitschopf, Barbara, 2023. "Development prospects for energy communities in the EU identifying best practice and future opportunities using a morphological approach," Energy Policy, Elsevier, vol. 174(C).
    5. Anuta, Oghenetejiri Harold & Taylor, Phil & Jones, Darren & McEntee, Tony & Wade, Neal, 2014. "An international review of the implications of regulatory and electricity market structures on the emergence of grid scale electricity storage," Renewable and Sustainable Energy Reviews, Elsevier, vol. 38(C), pages 489-508.
    6. Bashiri, Ali & Alizadeh, Sasan H., 2018. "The analysis of demographics, environmental and knowledge factors affecting prospective residential PV system adoption: A study in Tehran," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 3131-3139.
    7. Moritz Ehrtmann & Lars Holstenkamp & Timon Becker, 2021. "Regional Electricity Models for Community Energy in Germany: The Role of Governance Structures," Sustainability, MDPI, vol. 13(4), pages 1-24, February.
    8. Friedrich Chasin & Ute Paukstadt & Patrick Ullmeyer & Jörg Becker, 2020. "Creating Value From Energy Data: A Practitioner’s Perspective on Data-Driven Smart Energy Business Models," Schmalenbach Business Review, Springer;Schmalenbach-Gesellschaft, vol. 72(4), pages 565-597, October.
    9. Pereira, Guillermo Ivan & Niesten, Eva & Pinkse, Jonatan, 2022. "Sustainable energy systems in the making: A study on business model adaptation in incumbent utilities," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    10. Bryant, Scott T. & Straker, Karla & Wrigley, Cara, 2020. "Designing our sustainable energy future: A shock doctrine for energy," Energy Policy, Elsevier, vol. 147(C).
    11. Sylwia Słupik & Joanna Kos-Łabędowicz & Joanna Trzęsiok, 2021. "An Innovative Approach to Energy Consumer Segmentation—A Behavioural Perspective. The Case of the Eco-Bot Project," Energies, MDPI, vol. 14(12), pages 1-26, June.
    12. Engelken, Maximilian & Römer, Benedikt & Drescher, Marcus & Welpe, Isabell M. & Picot, Arnold, 2016. "Comparing drivers, barriers, and opportunities of business models for renewable energies: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 60(C), pages 795-809.
    13. Omar Shafqat & Elena Malakhtka & Nina Chrobot & Per Lundqvist, 2021. "End Use Energy Services Framework Co-Creation with Multiple Stakeholders—A Living Lab-Based Case Study," Sustainability, MDPI, vol. 13(14), pages 1-24, July.
    14. Adil, Ali M. & Ko, Yekang, 2016. "Socio-technical evolution of Decentralized Energy Systems: A critical review and implications for urban planning and policy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 1025-1037.
    15. Herbes, Carsten & Ramme, Iris, 2014. "Online marketing of green electricity in Germany—A content analysis of providers’ websites," Energy Policy, Elsevier, vol. 66(C), pages 257-266.
    16. Helms, Thorsten, 2016. "Asset transformation and the challenges to servitize a utility business model," Energy Policy, Elsevier, vol. 91(C), pages 98-112.
    17. Anna Kowalska-Pyzalska, 2019. "Do Consumers Want to Pay for Green Electricity? A Case Study from Poland," Sustainability, MDPI, vol. 11(5), pages 1-20, March.
    18. Fettermann, Diego Castro & Cavalcante, Caroline Gobbo Sá & Ayala, Néstor Fabián & Avalone, Marianne Costa, 2020. "Configuration of a smart meter for Brazilian customers," Energy Policy, Elsevier, vol. 139(C).
    19. Carlotta Piantieri, 2018. "Innovative Business Models for Cleantechs," DIW Roundup: Politik im Fokus 125, DIW Berlin, German Institute for Economic Research.
    20. Hyeog-in Kwon & Ju-ho Kim & Moo-goong Hong & Eui-jin Park, 2020. "Upcoming Services Innovation for the Home Energy Management System in Korea," Sustainability, MDPI, vol. 12(18), pages 1-18, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:rensus:v:157:y:2022:i:c:s1364032121012776. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.