Power prices are causing many consumers to cut back on home heating. In our latest energy satisfaction survey, 38 percent of respondents said their home wasn’t as warm as they’d like because they had to restrict how much power they used.
The price of power remains a cause of complaint for many households. Sixty-two percent of respondents said they were concerned about their household’s energy costs. Most said they tried reducing their use some or all of the time.
Consumers in rental accommodation were more likely to be turning down the heat. Forty-four percent of renters said they’d cut back on heating because of the cost compared with 33 percent of homeowners. Renters were also more likely to feel their home was hard to heat in winter.
Power prices remain a key factor influencing customer satisfaction in the electricity industry.
Forty-six percent of respondents said they were very satisfied with their power company. However, companies seen as less likely to offer competitive prices and value for money scored lower marks.
Genesis Energy, the largest electricity retailer with 22 percent of the residential market, ranked last. Less than half of its customers felt they were getting good value and just 36 percent were very satisfied overall.
None of the other big power players – Contact Energy, Mercury Energy, Meridian Energy and Trustpower – managed to rate above average.
Following the trend seen in previous years, smaller brands were more likely to gain favour with respondents.
The majority of Nova Energy (72 percent) and Powershop (71 percent) customers were very satisfied. Both retailers – which have less than eight percent of the market between them – also rated above average for customer support, comfortably beating out the big five.
However, regardless of retailer, the majority of respondents (72 percent) thought their power company could boost its customer satisfaction ratings by lowering prices. Low earners, with income below $40,000, were more likely (81 percent) to want a price drop.
Price was the main reason customers switched: 73 percent of those who had changed company in the past 12 months said they switched to get a better price. Those who made a change were more likely to be very satisfied overall (53 percent) compared with those who hadn’t (44 percent). But the effect didn't last. After three years with the same company, the respondents were no more likely to be satisfied than the average.
Electricity retailers invest heavily in advertising and marketing but our survey results suggest it’s done little for the industry’s public image.
Only 12 percent of respondents felt power companies have customers’ best interests at heart. Less than a quarter agreed companies offer fair contracts (20 percent) and prices (16 percent).
Results also suggest many consumers believe companies aren’t as transparent about their prices as they should be. Although 65 percent agreed it pays to shop around, just 21 percent felt companies make it easy to compare what’s on offer.
Less that half (44 percent) said they clearly understood their retailer’s terms and conditions. These results were largely consistent across all retailers in our survey, suggesting power companies have significant room to move to ensure they’re providing information that’s easy for consumers to understand.
The rental trap
Compared with homeowners, renters are much less likely to think their home is easy to heat during winter (82 percent v 64 percent) and less likely to agree they can heat their home comfortably for the price they pay (52 percent v 37 percent).
Renters in our survey (274 respondents) were also less likely to know how well their home was insulated. Of those able to comment:
- 54 percent said they had ceiling insulation vs 90 percent of homeowners
- 36 percent said they had wall insulation vs 61 percent of homeowners
- 28 percent said they had underfloor insulation vs 50 percent of homeowners
- 11 percent said they had double-glazing vs 26 percent of homeowners
- 52 percent said they had efficient heating vs 76 percent of homeowners.
While the government has introduced requirements for rental properties to have ceiling and underfloor insulation, it’s stopped short of mandating heating.
The majority of respondents in our survey (64 percent) felt rentals should be required to have an efficient form of heating, such as a heat pump or modern woodburner. Renters were significantly more likely to agree: 81 percent thought heating should be mandatory compared with 58 percent of homeowners. Landlords were less enthusiastic: just 47 percent agreed.