Monday, March 20, 2023

Study with 5000 houses – consumption will decrease if electricity prices increase


On average, electricity prices in Switzerland will increase by 27 percent in 2023. Research says it affects behavior.

A research group spent five years examining the electricity consumption of nearly 5,000 homes in Switzerland and talking to residents. The result: If the price of electricity goes up, the homes save energy. And not only in the short term, but in the long term, explains Nina Bougain, environmental and energy economist at the Zurich University of Applied Sciences (ZHAW).

“In the short term, households may react to changes in electricity prices primarily through their behavior. In the long term, for example, we may replace our refrigerators. It makes a big difference,” says Boojan An example calculation: “Suppose the price of electricity rises by 10 percent. In the short run, we will be able to save around 3 per cent. But in a year, we save up to 7 per cent based on this 10 per cent price change.”

more likely to own a home

With 10 percent higher electricity costs, up to 7 percent can be saved over the long term as homes install more efficient home appliances or replace heating systems. This works especially well in the case of home ownership. The owners then directly benefit from investing in new equipment. In rented apartments, however, this calculation works only to a limited extent. The tenant only saves electricity if the owner is really willing to invest in new, affordable equipment.

In the city of Zurich, you only pay for what you use.

In addition, energy suppliers in many communities charge a basic price for electricity use. It delays information about consumption. “That’s 10, 20 francs per month, which is what you pay anyway, no matter how much electricity you consume,” says Bouzen. This is a problem because, from an economic point of view, you have an incentive to consume more. “So, for example, the city of Zurich eliminated the original price. You only pay for what you use.”

price drive demand

The Zurich model reflects a classic, economic theory, she explains: Price controls demand for electricity. However, until now most households have only marginally discovered that electricity costs. But electricity has become more expensive in recent months. Next year, prices will increase by an average of 27 percent.

It remains to be seen whether the higher price will turn into a different behavior now.

And another important factor influences this model, the economists say: awareness. « In the current situation, because of all these media reports, we are even more aware that electricity actually has a price. And the Federal Council says we must save. These visibility effects then come on top of this saving potential.”

just slow rethinking

This should really mean that electricity consumption in Switzerland will drop significantly. Yes, but, Bougain says: “It depends a lot on whether prices will stay high in the short or long term.” In other words: the rethinking of electricity consumption is happening slowly. “It remains to be seen whether this will turn into a different behavior now. It is not that easy to bring about a change in behavior, but there is hope.”

After discussions about potential power outages, awareness of the need to use electricity sparingly may again subside. Especially when the results are no longer clearly noticeable in the wallet.

Nation World News Desk
Nation World News Desk
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