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Cost Focus versus Comfort Focus: Evidence from a Discrete Choice Experiment with Swiss Residential Electricity Customers

Based on a discrete choice experiment with 582 households in Switzerland, we find, that about 30% of the customers focus on price risks (cost focus) when they choose an electricity tariff, while 70% of the customers are more worried about volume risks (comfort focus). Customers with a cost focus, prefer contracts with low price risks and automatic load control, even when these contracts increased their volume risks and may lead to discomfort, while customers with a comfort focus are unlikely to choose a contract that exposes them to either price or volume risks. All customers prefer direct load control of individual appliances to capacity subscriptions or other demand response approaches which limit their total electricity demand. While customers with a cost focus likely accept direct load control even if this reduces their comfort, enrolling customers with a comfort focus will require further efforts and contracts avoiding comfort loss.

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Keywords: Residential electricity demand, Consumer preferences, Demand Response

DOI: 10.5547/01956574.45.2.cwin

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Published in Volume 45, Number 2 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


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