Australia – a leading solar energy producer
Dr Breda McCarthy is fascinated by the thought processes behind consumer decisions. Recently, Breda has examined how solar energy may have led to some households making wasteful decisions, and how this could be remedied with strategic marketing techniques.
“I'm interested in consumer psychology, what motivates consumer behaviour, and especially potentially irrational behaviour”, Senior Lecturer in Economics and Marketing, Dr Breda McCarthy, says.
“People make trade-offs, or their motives are often in conflict. I'm trying to explore why we behave as we do, and why we behave irrationally in some respects.”
Solar rooftops in Australia, for instance, are a great example of irrational consumer behaviour.
Australia is the number one country in the world when it comes to solar energy produced per capita. In 2022 alone, almost 1,500 kilowatt hours were produced per person, which is just under 20 per cent of the average energy consumption of those who live in a two-person household.
Breda says that Australia has become a top solar energy producer over the years for a reason. “After the introduction of government support, such as the Queensland Solar Bonus Scheme in 2008, solar power adoption started accelerating,” she says.
“Now that more than one in three households have solar on their roofs, it’s a fairly mature market.”
Supporting coal and solar energy
Even though so many homeowners have solar rooftops, Breda noticed that this does not necessarily mean that they are environmentally conscious.
“In Townsville, for instance, many people support coal mining as a means to create jobs. But at the same time, they rely on solar panels as a way of reducing their electricity bill,” Breda says. “I became interested in teasing out those debates, which led me to look into researching solar households.”
In her research paper, “Moral licensing and habits: do solar households make negligent choices?”, Breda looked at ‘moral licensing’, which is a certain kind of irrational behaviour. “People mentally balance good deeds with bad, and so they feel that if they are doing the right thing by producing solar energy, they are permitted to waste this energy as well.”
Interacting with an invisible resource
Given that 257 homeowners with solar roofs participated in Breda’s study, the findings are quite significant. Breda found, for instance, that even though people install solar because they feel it helps them cut their bills and because it's good for the environment, this doesn’t change how they interact with electricity on a daily basis.
Breda says it all comes down to how people are used to behaving. “Electricity is invisible, and we take it for granted. We might be taught to turn off the lights when we leave the room. This behaviour is very much habitual.”
This habitual behaviour might lead to bad decisions, such as using a lot of electricity during peak periods when the power grid is already under stress.
“This is when solar householders might succumb to thinking that they've done their bit for the environment by buying solar panels,” Breda says. “They think that gives them a license to use more electricity.”
Breda stresses that this is an important finding, because one would assume that people who are in favour of solar are always environmentally conscious, and she says that there is still a lot to be done to change that.
Sensitising solar households to save energy
“Policy makers or solar installers, for instance, could give us some ideas on how to change our behaviour, or reorientate behaviour, and how to conserve electricity,” she says, and it might be as easy as using persuasive marketing slogans.
“These messages have to resonate with people and reflect their reality. A slogan that captures the message of, 'do you think that having rooftop solar gives you a license to use as much energy as you like, think again – don't make excuses for not saving energy' might help,” Breda says.
“Or reminding people 'okay, you've got your panels now, and you might think now that electricity is free. But you may still want to conserve energy.’
Breda says the focus is still on the sale alone. “Solar retailers could focus more on the post-purchase phase and try to build up more loyalty or spread word-of-mouth,” she says. “If retailers care about what happens post-installation, that could benefit them as well as the customer.”
Solar batteries in the family home
Breda says that if solar retailers would stay in contact with customers in the post-purchase phase, customers might recommend them to others, and potentially consider buying additional products, such as a home battery energy storage system.
For now, relatively few solar households own a battery, but the numbers are growing, especially as the QLD Government is now offering up to $4,000 to eligible homeowners planning to install a battery.
“Battery ownership can help with stabilising the grid, as it can ease pressure on the grid, especially during the peak hours,” Breda says. “Battery ownership would also support the broader diffusion of electric vehicles as the solar battery could recharge one’s electric vehicle.”
Breda is currently finalising a related research article that covers battery ownership in solar households, and she expects that her findings will be published later in 2024.