# Presentation: 360000

## Distributed Generation Consumer Analysis:What Onsite Attributes Do Consumers Value Most?

**Presented by:**
- Christian Demeter, Founder and CEO;  Kevin Comer, Project Manager
- Antares Group Inc.
- 4351 Garden City Drive, Suite 301
- Landover, MD 20785
- Phone: (301)731-1900
- http://www.antaresgroupinc.com

***Project Partners:***

## Project Overview

**Project Goal**
- Statistically estimate which consumer drivers have the largest positive impact on deployment of grid-tied renewables
**Why?**
- Allow better understanding of the market for distributed renewables
**How?**
- Conducted an on-line consumer survey
- Employed Standard and “Conjoint” survey techniques
**Who will benefit?**
- Federal program managers and policy planners
- Private sector developers

## Example Questions Answered

- Relative importance of each product attribute
- What is most important to consumers?
- Where will research/marketing $ be most effective?
- Impact of product changes on consumer preference
- If I add battery backup to my packaged design, how will it impact consumer appeal?
- If I reduce (or increase) my product costs, how will it impact consumer appeal?
- Target markets
- Where will my marketing dollars be most effective?
- Policy impact
- R&D appropriations, taxation incentives
- And many more . . . . . .

## A consumer’s dilemma . . . 

- Taste/Brand
- Cost
- Packaging
- Volume/Size
- Nutrition
- On sale?

***EXAMPLE:  Factors involved in purchasing drinks***

***Most products don’t offer the best of everything.***
***Trade-offs must be made.***

## Conjoint Analysis

- Respondent choices mimic real life purchase process
- Models the human decision-making process
_**Con**_sidered _**joint**_ly
- Tool for measuring _Importance_ and _Preference_ for products and product attributes
- Family of techniques and methods
- Based on premise that consumers evaluate the value of a product by _combining the values of each attribute_
- Allows market simulations (“what-if“ scenarios) for different products and market segments

## Sample Traditional Survey Question

***Involves ranking attributes individually . . . . ***

## Sample Conjoint Question

## Sample Conjoint Question

## Rating vs. Conjoint Results

***Rating vs. Conjoint Results***

- Visual appearance not included in conjoint analysis.

## Key Terminology

**Attribute** = product feature
- Cost, Maintenance Required, Back-up Capability, Emissions, Noise, Warranty, (and Appearance)
**Level** = Choices/options within features
- Example: No, Low, Moderate, and High Maintenance
**Utility** = _*value*_ of each level of each attribute—estimated/calculated based on respondent choices
**Importance** = measures each attribute’s influence on  a product’s total utility/value
**Share of Preference** = the percentage of the respondent population that would prefer one product over another in the market simulator
*NOT* the same as market share

## Project Flowchart

- Literature Survey

- Develop Survey Design Parameters & General Questionnaire

- Program Survey at Antares Group

- Program for Online Application at Harris

**Data Collection, Analysis, Reporting**

*Team review*

- 2 rounds of Beta testing

- Select Target Audience

- Select Respondent Sampling Technique

*Team review*

- Harris Interactive’s Internet Panel

- -  General Questions
- -  Conjoint Analysis & Market Simulations

- Select Software and Conjoint Method

## Why Online Survey?

- Faster collection, analysis and distribution of data
- Respondent convenience, thus potentially higher response rate
- Geographic diversity of sample
- Ease of future replication for other target audiences
- By employing *Harris Interactive :*
- gained access to their pre-screened online panel
- minimized bias concerns
- were able to specify the audience we wanted

## Literature Survey

- Of > 20 documents reviewed, the most useful ones provided:
- Description of survey methodology and residential perspective on PV-DG systems in CO
- Comprehensive study of range of DG systems, end-user attitudes toward DG, and suppliers’ perceptions
- Discussion of conjoint survey used to evaluate service and provider characteristics
- Our project is unique because it looks at residential preferences for a range of DG systems across the U.S.

## Survey Design Parameters

- Target market
- residential population representative of U.S. population
- Sample size
- 1,221 total (400 each from 3 regions)
- Sample location (3 regions)
- West/lower Midwest, Northeast, remaining states
- Sampling technique
- panel chosen from Harris Interactive’s Internet consumer panel
- Survey length
- ~ 20 min. per respondent

## Why Residential Sector?

- Largest single group and most likely near-term market for small DG systems
- Broad enough to encompass range of characteristics/viewpoints
- Heterogeneous sample reduces analytical bias
- Hard to get statistically valid sample of smaller markets (e.g. agriculture sector)
- No current publicly-available data on residential consumer preferences for DG systems for the U.S.

## Attribute Importances

**Attribute Importances for Total Respondent Base**

- (1221 respondents representative of average U.S. consumer population over 18 years old)

## Attribute Utilities

## Market Simulator Input

## Market Simulator: Example

## Market Simulator: Example

## Market Simulator: Example

## Market Segmentation Variables

- Geographic region / state
- Level of electricity service satisfaction
- Household income
- “Discretionary” income
- Education
- Age
- Gender
- Race
- Knowledge of general electricity issues
- Electric bill reviewer?
- Household decision responsibility

- Unsatisfactory number of outages?
- Recent electricity cost increases
- Rural / Urban / Suburban
- Strict homeowner standards/codes?
- Willingness to pay for DG system
- Personal priorities w.r.t. DG
- Emissions, cost, backup, etc.
- Home office or business

***Data can be analyzed for various market segments***

## Preliminary Conclusions

- Methodology
- Conjoint is a very useful tool for market studies
- Allows more productive use of input from respondents
- On-line survey technique worked _***extremely***_ well
- Quick, convenient, can specify audience
- Technical
- Consumers have _**high**_ preference for back-up capability (and are willing to pay for it)
- Almost as important as cost
- PV and wind system strengths are not the most “*important”* consumer drivers
- however, those combined strengths are worth $$
- 85% of consumers would be willing to pay a monthly premium for one of the DG systems presented
- Weighted average was $19/month

## Next Steps

- Complete analysis and final report
- Publish peer-reviewed paper
- Prepare data set for public release and use
- Conduct more detailed analysis of this data set
- Consider other subjects in need of this type of information
- Consumer preferences for green power
- Preferences for DG systems in other markets
- Utility
- Industrial/Commercial
- Policy analysis
- CAFÉ standards vs. Clean Fuels Mandates vs. Gasoline Taxation
- Technology-specific analyses
- Small-scale fossil powered DG
- Solar
- Wind
- Biomass

## THE END

## Banner-Stub Table

## Demographic Results

## Demographic Results

## Demographic Results

## Demographic Results

## Demographic Results

## Demographic Results

## General Electricity Data

## General Electricity Data

## General Electricity Data

## General Electricity Data

## General Electricity Data

## General Attributes Data

## DG Systems Data

- Average premium amount = $19/month