IDEAS home Printed from
   My bibliography  Save this article

Cost-reflective electricity pricing: Consumer preferences and perceptions


  • Hall, Nina L.
  • Jeanneret, Talia D.
  • Rai, Alan


In Australia, residential electricity peak demand has risen steeply in recent decades, leading to higher prices as new infrastructure was needed to satisfy demand. One way of limiting further infrastructure-induced retail price rises is via ‘cost-reflective’ electricity network pricing that incentivises users to shift their demand to non-peak periods. Empowering consumers with knowledge of their energy usage is critical to maximise the potential benefits of cost-reflective pricing. This research consulted residential electricity consumers in three Australian states on their perceptions and acceptance of two cost-reflective pricing scenarios (Time-of-Use and Peak Capacity pricing) and associated technologies to support such pricing (smart meters, in-home displays and direct load control devices). An energy economist presented information to focus groups on the merits and limitations of each scenario, and participants’ views were captured. Almost half of the 53 participants were agreeable to Time-of-Use pricing, but did not have a clear preference for Peak Capacity pricing, where the price was based on the daily maximum demand. Participants recommended further information to both understand and justify the potential benefits, and for technologies to be introduced to enhance the pricing options. The results have implications for utilities and providers who seek to reduce peak demand.

Suggested Citation

  • Hall, Nina L. & Jeanneret, Talia D. & Rai, Alan, 2016. "Cost-reflective electricity pricing: Consumer preferences and perceptions," Energy Policy, Elsevier, vol. 95(C), pages 62-72.
  • Handle: RePEc:eee:enepol:v:95:y:2016:i:c:p:62-72
    DOI: 10.1016/j.enpol.2016.04.042

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

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

    References listed on IDEAS

    1. Sandy Q. Qu & John Dumay, 2011. "The qualitative research interview," Qualitative Research in Accounting & Management, Emerald Group Publishing, vol. 8(3), pages 238-264, August.
    2. Strengers, Yolande, 2010. "Air-conditioning Australian households: The impact of dynamic peak pricing," Energy Policy, Elsevier, vol. 38(11), pages 7312-7322, November.
    3. Darby, Sarah J., 2012. "Metering: EU policy and implications for fuel poor households," Energy Policy, Elsevier, vol. 49(C), pages 98-106.
    4. Nicholls, Larissa & Strengers, Yolande, 2014. "Air-conditioning and antibiotics: Demand management insights from problematic health and household cooling practices," Energy Policy, Elsevier, vol. 67(C), pages 673-681.
    Full references (including those not matched with items on IDEAS)


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

    Cited by:

    1. Christine Milchram & Geerten Van de Kaa & Neelke Doorn & Rolf Künneke, 2018. "Moral Values as Factors for Social Acceptance of Smart Grid Technologies," Sustainability, MDPI, Open Access Journal, vol. 10(8), pages 1-23, August.
    2. Milchram, Christine & Hillerbrand, Rafaela & van de Kaa, Geerten & Doorn, Neelke & Künneke, Rolf, 2018. "Energy Justice and Smart Grid Systems: Evidence from the Netherlands and the United Kingdom," Applied Energy, Elsevier, vol. 229(C), pages 1244-1259.
    3. Tayal, Dev & Evers, Uwana, 2018. "Consumer preferences and electricity pricing reform in Western Australia," Utilities Policy, Elsevier, vol. 54(C), pages 115-124.
    4. Layer, Patrick & Feurer, Sven & Jochem, Patrick, 2017. "Perceived price complexity of dynamic energy tariffs: An investigation of antecedents and consequences," Energy Policy, Elsevier, vol. 106(C), pages 244-254.
    5. Passey, Robert & Haghdadi, Navid & Bruce, Anna & MacGill, Iain, 2017. "Designing more cost reflective electricity network tariffs with demand charges," Energy Policy, Elsevier, vol. 109(C), pages 642-649.
    6. Langbroek, Joram H.M. & Franklin, Joel P. & Susilo, Yusak O., 2017. "When do you charge your electric vehicle? A stated adaptation approach," Energy Policy, Elsevier, vol. 108(C), pages 565-573.
    7. Michael Maphosa, 2018. "The ‘User Pays’ Principle and the Electricity Sector: A South African Case," Journal of Economics and Behavioral Studies, AMH International, vol. 10(5), pages 51-58.
    8. Bastida, Leire & Cohen, Jed J. & Kollmann, Andrea & Moya, Ana & Reichl, Johannes, 2019. "Exploring the role of ICT on household behavioural energy efficiency to mitigate global warming," Renewable and Sustainable Energy Reviews, Elsevier, vol. 103(C), pages 455-462.


    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:enepol:v:95:y:2016:i:c:p:62-72. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.