Energy consumers are concerned about climate change — and their pocketbooks. How can companies interpret these potentially conflicting messages?

Across the US, energy consumers are caught between two desires: protecting the environment while keeping energy costs in check. These competing dynamics have also flummoxed energy companies as they attempt to serve two masters — keeping shareholders happy by delivering the profitability they demand while meeting consumer energy needs in a dynamic market.

The US Fuels of the Future survey — based on responses from 1,500 consumers and 102 corporate energy decision-makers (EDMs) across the US — shows that despite significant concern over the environment and climate change, Americans overwhelmingly focus on price first.

Feelings on fuels

As consumers have more options — from fueling vehicles to powering homes and businesses — consumer preference and the willingness to put their money behind those preferences become increasingly important. So how do American consumers feel about their fuel choices?

The majority of consumers believe natural gas is the most affordable and reliable fuel. This is important since 41% of consumer respondents ranked affordability as the most important quality of a fuel source (whereas 28% ranked reliability as the most important quality). While a majority of consumers agree environmental friendliness is important, only 10% of respondents ranked it the most important quality of a fuel source.

Although energy costs in the US are lower than many parts of the world, many consumer survey respondents struggle to make ends meet — one in five respondents said affording energy for their car (18%) or home (22%) is difficult each month.

At the same time, environmental concerns are growing in priority. Around three in four consumers expressed concern about the environmental impact of their transportation or home energy use. Further, respondents said they were willing to pay more for less carbon from the fuel source they use in their vehicles and on their electric bills. Interestingly, concern for environmental impact is higher among those who have difficulty affording energy compared with those who easily afford it, and the former are also willing to pay more, up to a point, for offerings with a reduced carbon impact.

From the corporate perspective, not surprisingly, EDMs prioritize reliability and then affordability in a fuel source, and are similarly keen on natural gas. Interestingly, EDMs rank all nonrenewables (natural gas, oil, nuclear and coal) as more affordable and reliable options than their renewable counterparts. Yet even they are willing to pay a bit more for an option that has less of a carbon impact, as the chart below indicates. 

According to respondents, the primary hurdles to electric vehicle ownership are expense and the lack of charging stations. In fact, 50% of those who do not wish to own an electric vehicle in the future believe there will never be enough places to charge electric vehicles, and 42% believe the range of electric vehicles will never equal those using traditional fuels. Further, among those who want an electric vehicle, 68% say they are too expensive — even though there are currently 22 models for sale in the US, half of which have a list price below $39,000. The survey shows there is a definite need for public education about the progress manufacturers have made on electric vehicles.