Impact of monetary incentives on the adoption of direct load control electricity tariffs by residential consumers

Last registered on July 01, 2024
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Pre-Trial

Trial Information

General Information

Title
Impact of monetary incentives on the adoption of direct load control electricity tariffs by residential consumers
RCT ID
AEARCTR-0013847
Initial registration date
June 26, 2024

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
July 01, 2024, 11:59 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
Switzerland
Region
Ticino

Primary Investigator

Name
Davide Cerruti
Affiliation
ETH Zürich
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Other Primary Investigator(s)

PI Name
Massimo Filippini
PI Affiliation
ETH Zürich
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PI Name
Jonas Savelsberg
PI Affiliation
ETH Zürich
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PI Name
Flora Marchioro
PI Affiliation
Università della Svizzera Italiana
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Additional Trial Information

Status
Completed
Start date
2022-10-18
End date
2023-01-04
Keywords
Environment & Energy
Additional Keywords
direct load control, electricity tariffs
JEL code(s)
Q41, L94
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
In this RCT we implemented an online survey with a sample of owners of electric vehicles, organized in cooperation with the company that owns and manages the public charging stations in the region. Within the survey, we first illustrated the purpose of a direct load control (DLC) tariff as a measure to prevent episodes of peak electricity demand. Then, we presented the general characteristics of this type of tariff: maximum frequency of blocks, duration of each block, installation costs of the DLC remote control system, and annual electricity discount. Afterward, we gathered the yearly willingness to accept compensation to adopt a DLC tariff via a single-bounded dichotomous choice question. We randomly selected different levels of annual compensation to the participants of the experiment, and whether the remote control system required for a DLC tariff was paid by the consumer or by the company.
External Link(s)

Registration Citation

Citation
Cerruti, Davide et al. 2024. "Impact of monetary incentives on the adoption of direct load control electricity tariffs by residential consumers." AEA RCT Registry. July 01. https://doi.org/10.1257/rct.13847-1.0
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Experimental Details

Interventions

Intervention(s)
The goal of the study is to measure how different DLC tariff formats affect the interest and the adoption of the tariff from customers in a stated choice setting.
Intervention (Hidden)
We implemented an online survey with a sample of owners of electric vehicle owners. The owners faced the choice to adopt a DLC tariff in a stated choice setting. The DLC tariff would have the following characteristics:
*It affects charging stations for electric car (fully electric or plug-in). If a respondent did not have a charging station, they would be asked to imagine owning one.
*Each day, the charging station can be disconnected for a maximum of 3 times, with a maximum duration of 2hrs per block;
*Between each disconnection there is a guaranteed free time of at least 2hrs;
When adopting the DLC tariff, consumers would receive a discount on their annual electricity bill. In addition, a remote control system (cost of 100 CHF) must be installed.

The respondents would then be asked if they would be willing to adopt such a tariff with these conditions.

Intervention Start Date
2022-10-18
Intervention End Date
2023-01-04

Primary Outcomes

Primary Outcomes (end points)
1) Whether customers declared the willingness to adopt the DLC tariff
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The respondents of the survey would face the same DLC tariff description, with the exception of the size of the annual discount on the electricity bill, and of whether the company or the consumer would pay for the installation of the remote control system.
Experimental Design Details
Each respondent of the survey would receive the same baseline description of the DLC tariff, with two aspects changed randomly. These are:
1) Whether the consumer or the electricity provider would pay for the installation of the remote control system
2) The size of the discount on the annual electricity bill (24, 48, 72, 96 or 120 CHF per year)
Randomization Method
Randomization done in office by a computer
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
No planned clusters
Sample size: planned number of observations
649
Sample size (or number of clusters) by treatment arms
333 (control group), 316 (installation treatment group)
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Ethics Commission ETH Zürich
IRB Approval Date
2022-05-11
IRB Approval Number
EK 2022-N-85
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Abstract
To overcome the inherent clash between the ever-increasing push for electrification in the transportation and heating sectors, and the intermittent nature of renewable energy sources, demand response solutions such as direct load control (DLC) tariffs are receiving growing attention from researchers and policymakers. The present study aims to investigate the impact of two measures (i.e. a video intervention and an upfront subsidy) in increasing the acceptance rates of an existing DLC tariff targeted at electric vehicle charging stations and heat pumps in Switzerland. To achieve this, we combine two randomized controlled trials: (1) a stated-choice contingent valuation on electric vehicle owners to confirm the validity of the upfront susbidy, and (2) a revealed-preference field experiment on an existing DLC tariff proposed to the clients of a local distribution system operator. Results suggest that both measures of video and monetary intervention increase contact and subscription rates to the proposed DLC tariff, although the monetary intervention appears to be more convincing to consumers. Further, we use these results in combination with a bottom-up electricity market model to simulate the consequences on the level of system cost of a large-scale implementation of a DLC tariff.
Citation
Davide Cerruti, Massimo Filippini, Flora Marchioro and Jonas Savelsberg, Impact of monetary incentives on the adoption of direct load control electricity tariffs by residential consumers, Working Paper, Center for Economic Research at ETH (2023)
URL
https://doi.org/10.3929/ethz-b-000648877

Reports & Other Materials