Ofgem has published the findings of a major research programme examining whether standing charge rebates can encourage households to reduce electricity consumption during peak demand periods. The study provides valuable insights into how innovative tariff structures could support a more flexible and efficient energy system while improving customer engagement with energy usage.
The research involved two large-scale randomised controlled trials with more than 43,000 customers from British Gas and ScottishPower. Using half-hourly smart meter data, surveys and customer interviews, Ofgem assessed whether linking standing charge rebates to reduced peak-time electricity consumption could influence consumer behaviour.
Key findings indicate that standing charge rebates can encourage some households to lower electricity usage between 4pm and 7pm, although the overall impact was modest and observed consistently in only one of the two trials. Increasing the value of the rebate produced only limited additional reductions in peak-time consumption, suggesting that larger financial incentives alone may not significantly increase participation.
Notably, customers in vulnerable circumstances, including some prepayment meter users and those registered on the Priority Services Register, demonstrated relatively strong responses to the incentives. Participants also reported that the rebate structure gave them greater control over their energy use and helped address some of the negative perceptions associated with standing charges.
The research identified several barriers to sustained behavioural change, including household routines, competing commitments, forgetting peak periods and difficulties recognising potential savings. These findings suggest that future flexibility programmes may need to combine financial incentives with clear communications, customer engagement and user-friendly technologies.
For the metering sector, the trials demonstrate the continuing importance of smart meter data in enabling innovative tariff designs, understanding customer behaviour and supporting the transition to a more flexible energy system. The research will help inform future decisions on standing charges, consumer flexibility propositions and wider retail market reforms.