Consumer engagement with smart electricity tariffs
Executive Summary
Consumers have a pivotal role in the UK’s goal to hit net-zero carbon emissions by 2050. One necessary change will be for consumers to become more flexible in their energy use to balance demand for electricity with supply as renewable generation varies with the time of day and weather. Demand-side response (DSR) tariffs are designed to encourage this flexibility by rewarding consumers for using electricity at a time of day when power is plentiful and cheap.
While DSR tariffs offer consumers cost-saving opportunities through smarter energy usage, their adoption remains limited to date. To ensure this rate of take-up grows, and that the market develops competitively and in the best interests of consumers, it is important to understand how consumers currently engage and what needs to improve. This research aimed to improve understanding how consumers find, choose and use DSR tariffs and the challenges they currently face. To achieve this we conducted a mixed-methods study, which included 25 in-depth interviews with consumers currently on or considering DSR tariffs, as well as an online survey of c.1,000 Which? members. [1]
The research found diverse consumer experiences with DSR tariffs, shaped by their individual confidence and familiarity with the energy market. Some consumers rely on and value supplier guidance, while others proactively seek out what tariff would best suit them through research on their current provider’s websites, third party websites, or social media. Despite these differences, three key challenges emerged:
- Consumers often miss out on DSR tariffs - there was a general lack of awareness of DSR tariffs, even when consumers have the technology which would allow them to benefit from them e.g. cheaper energy costs for off-peak times of day. This means many consumers, such as those who have an electric vehicle and a smart meter, are paying more for their electricity than necessary.
- The process being time consuming and stressful - consumers find the process of researching the different energy tariffs available both time consuming and mentally overwhelming, often meaning there is a reluctance to engage with more complex tariffs. This is further exacerbated by consumers being unable to use comparison sites to aid in the switching process for DSR tariffs as they often do when looking for standard tariffs.
- Consumers are not always able to see if they’re benefiting - people struggle to understand whether they are benefiting financially from their tariff or not, which leaves them feeling uncertain about their decision.
Despite these challenges, many early adopters report positive experiences once they are on DSR tariffs. This suggests that the primary friction lies in the research and decision-making stages. Without addressing these issues, widespread adoption may stall, competition could weaken, and some consumers may miss out on accessing the best deals, exacerbating inequality in the energy market. To address these challenges and support broader adoption, three changes are needed:
- Improving awareness and prompts to engage - awareness of DSR tariffs is still low, but the research has shown consumers value tariff recommendations from their current supplier, particularly consumers who usually have low engagement in this sector. Whilst this signposting by suppliers could encourage certain groups of consumers to switch to a DSR tariff, it could lead to an overreliance on suppliers and a failure to explore other potentially more beneficial tariffs from across the market. Therefore policymakers should be exploring how to broaden awareness and prompt engagement.
- Reducing barriers to making comparisons - the time and mental burden finding and choosing a DSR tariff has on consumers can often act as a deterrent for consumer engagement. Expanding the capability of the current price comparison services to allow consumers to personalise searches to effectively evaluate the different DSR tariffs available should be a priority. Most price comparison services do not include DSR tariffs, while those that do are typically restrictive and don’t include all options. Currently consumers feel these are falling short of consumer expectations and needs, including the level of personalisation available in regards to the features involved within DSR tariffs. There may also be potential for the government to advance a smart data scheme in energy via the smart data powers in the Data (Use and Access) Bill. However, progress is slow and needs to speed up, particularly with Marketwide Half Hourly Settlement due to begin rolling out from September 2025.
- Improve visibility of cost savings - even amongst the early adopters in our research, there are those who cannot say whether they are saving money from being on a DSR tariff. This risks undermining trust in the market if consumers later find out they could have been on a cheaper tariff. Improving understanding is not just about avoiding bad experiences, but also about helping consumers to share good experiences, which we know from the research is valued by consumers. Suppliers should consider how to make it much clearer for consumers whether they are on a suitable tariff and how much they are saving compared to a standard fix.
Next steps
Using the insights from this research, we will continue to work on identifying the key policy changes required to address the challenges highlighted and to support the development of a consumer-focused DSR market. These recommendations will be detailed in a forthcoming policy report and we invite engagement with all interested stakeholders as we shape these proposals.
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Introduction
The UK’s goal to hit net-zero carbon emissions by 2050 will have its most noticeable impact on households through the way they consume energy at home. The vast majority of British homes are heated by gas, and 96% of cars on the road run on fossil fuels [2]. To achieve zero carbon emissions for these will require mass electrification at the same time as decarbonising the sources of power generation. This will mean much higher household electricity consumption, mostly from sources which cannot be dispatched at will (like gas-fired power stations), but instead depend largely on the wind blowing or the sun shining.
These goals are achievable but require significant change. New generation, such as wind farms and solar farms, will need to be built, and the electricity grid will need to be upgraded to carry the additional electricity to homes and businesses. Consumers will also play a role by becoming more flexible in their consumption to help match demand for electricity with variable supply. Consumers can access cheaper electricity if they are able to move more of their electricity consumption to the times of the day when power is plentiful and cheap. This is alternatively described as ‘flexibility’, ‘demand-side response’ (DSR) or ‘smart’ energy use. We use all three terms throughout this report.
Consumers able to shift more of their consumption to off-peak or high-generation times can benefit directly by substantially reducing their bills. In addition, higher take-up of flexible consumption can reduce costs for all consumers by lowering overall peak demand, requiring fewer network upgrades and less generation capacity to be built. If realised, the benefits could save consumers billions of pounds per year by 2030, and potentially tens of billions by 2040. [3]
Currently, the vast majority of consumers do not regularly use electricity flexibly, meaning that levels of awareness and experience with DSR are low. Basic time-of-use pricing, with a day and night rate has traditionally been the most common way consumers engage with DSR, however these have mostly been ‘legacy’ time-of-use tariffs like Economy 7 and Economy 10, originally designed for households with electric storage heaters and which had special meters. It is estimated 3 million consumers are on such legacy tariffs, with concerns around fair treatment raised in recent years. The roll-out of smart meters has enabled the introduction of more tariffs which encourage flexibility, but they are still only used by a minority of consumers. Overall the Which? Sustainability Tracker 2024 found 8% of adults across the UK said they had a static time-of-use tariff, 5% said they had a dynamic time-of-use tariff and 3% a type of use tariff.
However, market and policy developments should mean take-up increases over time. Take-up of electric vehicles or heat pumps for example will increase the amount by which a typical household can actually benefit from shifting usage, while the rollout of market-wide half-hourly settlement from 2025 will mean that suppliers face a greater incentive to offer tariffs to consumers which more accurately reflect the real-time costs of supply. In 2023, Ofgem outlined its aspiration to ‘grow the role of domestic DSR to something that is utilised by the majority of consumers.’
There is also already substantial choice available to consumers with an array of different tariff structures and incentives in the market. Most suppliers offer at least one electric vehicle tariff with cheaper overnight charging, some of which involve automatic smart charging. New types of tariffs are also emerging, such as those designed for heat pumps, smart storage heaters or fully dynamic tariffs. We have also seen schemes from suppliers which build incentives to shift usage away from peak times into existing tariff structures, for example giving consumers free or discounted electricity when the grid is greener [4] or demand lower [5], or giving discounts to customers who move a certain proportion of their usage outside of peak times. [6] It is not only suppliers who offer DSR to consumers for example, some non-supplier businesses participate in NESO’s Demand Flexibility Service, offering consumers payments for reducing electricity use at particular times of high national demand.
To increase takeup of DSR tariffs, more consumers will need to know about the different tariffs and schemes on offer and understand how they work. Furthermore, if consumers are to be offered the full benefits of DSR, they will need to engage with competitive markets where suppliers or other providers of DSR have incentives to offer the best prices. Such markets can only develop if consumers are empowered to engage and compare offers, and have the necessary tools to assist them.
There is a substantial opportunity for DSR to improve levels of consumer engagement in the energy market, and to deliver substantial financial benefits to consumers. However, unless we understand how consumers currently engage and what needs to improve, there is a risk that take–up would be stymied and that benefits would be left on the table or only received by a highly engaged subset of the population.
Purpose of the research
This research aims to explore and better understand the consumer journey for individuals switching to tariffs that incentivise flexible electricity use (henceforth ‘DSR tariffs’). We focus on electricity tariffs offered by energy suppliers in particular, rather than other types of DSR, as these are currently the most common way in which consumers are consistently incentivised to use electricity flexibly. By examining the processes consumers have gone through to choose, switch to and use a DSR tariff, the research provides insights into the challenges and behaviours associated with comparing and selecting different energy tariffs.
The research focuses on:
- Consumer Comparison Behaviour: How consumers are made aware of DSR tariffs and how they compare tariff options, including their willingness to look beyond their current supplier.
- Challenges in Comparison: The obstacles in comparing DSR offers, such as difficulty accessing and evaluating relevant information.
- Decision-Making Process: The resources involved in choosing DSR tariffs, noting potential issues around the investment of time this requires and the uncertainty consumers face.
By exploring these steps in the consumer journey the research provides valuable insights into current consumer behaviour in the market, the challenges consumers face and what this might mean for how the market develops. Our findings improve the evidence base available to policymakers and energy providers aiming to improve transparency, accessibility, and consumer confidence in DSR markets in order to support the transition to net zero.
Methodology
To achieve these objectives, a mixed-methods study was conducted between July and August 2024 to explore the customer journey of researching and purchasing DSR tariffs.
The research was carried out in two stages, as illustrated in Figure 1.
Figure 1: Overview of research stages
The first stage explored the journey consumers took when researching and purchasing DSR tariffs. Twenty five consumers were recruited, all of whom were either considering or already using a DSR tariff. All participants owned at least one of the following technologies: a home electric vehicle charger, a ground or air source heat pump, or a storage or electric heater. These participants were selected as they are thought to be the consumers who stand to benefit immediately from a DSR tariff. For those on a DSR tariff, we included a variety of tariff types (see Figure 2).
Figure 2: Sample breakdown
| Type of tariff | Definition | Number of participants |
| Static Time-of-Use Tariff | Static time-of-use tariff offers two or more rates for electricity at fixed times of the day. For example, a lower price during the day and overnight as compared to weekday evenings. | 16 |
| Dynamic Time-of-Use Tariff | A dynamic time-of-use tariff offers a different price per unit of energy depending on the time of day. The times and rates can change from day to day. | 3 |
| Actively considered but not on a DSR Tariff | Looked into DSR tariffs but chose not to move onto one. | 6 |
| Total | 25 | |
The second stage builds on the findings from the in-depth interview through an online survey of 1,136 Which? members in August 2024, 21% of respondents reported being on a DSR tariff. We selected this sample because the demographics of the panel indicate that Which? members are more likely than the general population to either be on a DSR tariff or have explored the option.
Outline of report
Chapter 1 explores the journey consumers went through when looking into and moving onto DSR tariffs. It begins by identifying the triggers that started their journey and then how they went about researching, comparing and making a decision.
Chapter 2 outlines challenges that arose for consumers during their journey which can cause harm to consumers and could negatively affect the future growth of the DSR model.
Finally, Chapter 3 which covers what our findings mean for the future of DSR tariffs. This includes both a summary of early adopters’ experience of being on these tariffs and key areas we believe need to be addressed.
Chapter 1: The consumer journey
This chapter explores the consumer journey of those adopting DSR tariffs, from what initially motivated engagement to the steps consumers take in researching and selecting tariffs. Exploring the steps in this journey is crucial in understanding consumer experiences and how they differ by types of consumers, in order to shape future development in this industry.
Through the research we identified the different stages taken by consumers when deciding to switch to a DSR tariff. An overview of these stages can be seen in Figure 3. For each stage - triggers, research and decision making - the figure summarises the key influences and tools used.
In the remainder of this chapter we will explore the key points from each of these stages and how different types of consumers experience them.
Figure 3: The consumer journey for DSR tariffs
Awareness and triggers to engagement
How consumers first become aware of and are prompted to begin engaging with DSR tariffs is an important influence on the next steps consumers take on their journey and their overall levels of engagement. Current consumer awareness of and familiarity with DSR tariffs is low, with the DESNZ Public Attitudes Tracker finding two-thirds of consumers know at most ‘a little’ about time-of-use tariffs. Understanding how consumers initially find out about and are encouraged to explore DSR tariffs sheds important light on the opportunities for growing the sector. It also affects how stakeholders can better engage with consumers in the future.
The three main routes into DSR tariffs for consumers were: supplier influence, social recommendations and self-initiated triggers (Figure 3).
Less active consumers tend to be influenced by suppliers
Many consumers first learn about DSR tariffs through their suppliers, with 3 in 10 (31%) Which? members on a DSR tariff surveyed identifying their energy supplier’s guidance as the primary reason for their initial awareness of the tariff. [7] This initial exposure is often through communications such as targeted emails offering initiatives, letters and messages.
“I didn’t know much about them in the first place… I wrongly presumed it wasn’t something for me… I received a marketing email from my provider which changed this.”
For many of these consumers, the recommendations are key to engaging them with more innovative tariffs. The communications provide a straightforward path to discovering new options that they may not have considered independently, and often act as their only trigger for DSR uptake.
For these consumers within the research, they said energy providers made enrolment in DSR tariffs clear and simple, often only requiring them to sign-up online.
Recommendations from peers
Friends and families sharing their experience of these tariffs can act as a powerful influence on consumers, often in combination with another trigger (e.g. supplier recommendation). Hearing from friends and family whom they trust offers a sense of security for consumers who prefer not to be the ‘guinea pig’ but instead follow the tried and tested path of others.
“My best friend loves finding ways to save money and telling me things and she said have you received an email from the provider about this tariff and that she had signed up for it.”
“My neighbour said she uses the provider and saves so much money so I switched.”
However, the relative novelty of DSR tariffs and the technologies that make them appealing mean that most of the participants we interviewed were not triggered by friends and family when choosing their energy tariff. Instead, as tech-savvy adopters, they were often the ones guiding and supporting others in making their decisions. They noted the power of their recommendations, and how they had introduced more people to the benefits of DSR tariffs.
“Not saying I’m a trend setter (but I am!), both of my neighbours now have an electric vehicle and they are now both with Octopus. I was speaking to them about who I’m with and how much I pay to charge [and they were shocked how much less I pay].”
Self-initiated triggers often come down to money and technology
Self-driven triggers, where the consumer actively chooses to look into energy tariffs, are often prompted by a recent technology purchase or the aim of saving money.
Although it is not the most common trigger - only 10% of Which? members on DSR tariffs in our survey mentioned it - buying new technologies such as electric vehicles (EVs) or solar panels often sparks interest. This is particularly true for tech-savvy consumers looking for tariffs to complement their new purchases.
“As we were purchasing the EV, we knew it was going to cost a lot to charge at home, and the first point of call was to look around.”
Purchasing an EV triggered a few participants to look into DSR tariffs, however, a number of participants we spoke to with an EV were not aware for a long period of time after purchasing their EV that they could benefit from a DSR tariff. These participants only considered DSR tariffs after another prompt, such as a supplier informing them or when their current tariff expired.
Another trigger that often leads consumers to DSR tariffs is cost saving motivations. The financial pressures caused by recent energy bill rises were directly impacting household budgets, driving many to reassess their energy tariffs in search of savings. One participant shared how the sudden increase in their direct debit payments prompted them to take action:
“I only started looking around because my direct debit almost doubled… I wasn’t happy so I needed to look around.”
These self-initiated consumers tend to be more confident and knowledgeable when it comes to making decisions about their energy tariff. This tends to result in them proactively seeking information and independently discovering different alternatives, including DSR tariffs. Their curiosity about new products, coupled with a keen focus on finding the best deal, drives them to stay up to date with the latest trends, especially when contracts are coming to an end. For this subset of consumers, the trigger was often part of their routine.
“I do a bit of an audit to see whether my energy provider is up to date and a better deal… I switched to my current provider and then saw they had a lot of different tariffs available so called them up.”
Research pathways
Once consumers have been introduced to DSR tariffs or taken the decision to look into them, most choose to spend some time researching and comparing their options.
The exception to this, as shown in Figure 3, are consumers who were prompted by their provider. These consumers rarely did their own research beyond looking at the tariff they were being recommended in more detail on their energy providers’ website.
More proactive consumers use many online resources to research and compare their latest energy tariff options. Some consumers actively sought out DSR tariffs when they began their information search, while others discovered them incidentally during their search for a cheaper energy tariff. Some of the different research methods are explored below.
Provider websites are the most commonly used resource
When we asked Which? members how they searched for information about available tariffs, the most common action was visiting energy providers’ websites, with nearly half (47%) reporting doing so. We found that consumers used these websites in different ways.
Consumers who were triggered by recent technology purchases (e.g. an electric vehicle, heat pump) used energy providers’ websites the most. This group of consumers were ultra-engaged, actively looking into the details of each tariff, such as the day and night rate, standing charge, off and on peak times and other metrics. Some participants used this information to produce their own spreadsheets.
“Because there wasn’t a place where you could stick in all the information and it would spit out a price, that is where I had the spreadsheets I was using to work it out like, if we use 80% at night it would cost us this much etc.”
In addition to using energy provider websites, some of these consumers actively telephoned energy providers to find out more information about the available tariffs.
“They were extremely helpful. The guy knew what he was talking about, he seemed to come through confident so therefore I had confidence in him. It didn’t feel like he was reading through a script like you should have this one… He understood our situation.”
For others, energy provider websites tended to be the final destination after they had been on comparison websites and reached their purchasing decision.
Comparison tools were frequently used by those looking to save money
Consumer advice websites, like Which?, and comparison platforms, such as Money Supermarket and uSwitch, were popular for researching tariffs, with 29% of Which? members using consumer advice sites and 24% using comparison sites for information on DSR tariffs.
For those motivated by saving money on their energy bill, this was often where their search began - and for many, it was the first time that they discovered information about DSR tariffs.
“It was only when I started looking did I hear of [DSR tariffs]. That’s when I realised as you see different tariffs and wonder what these words mean.”
The consumers who knew about DSR tariffs before their comparison of options frequently reported using comparison websites to find information on the available tariffs for their specific needs. While traditional energy comparison websites don’t tend to list DSR tariffs in their quotes, they do have articles about these tariffs and links to the tariffs available, such as on Which?, uSwitch or Money Saving Expert.
Additionally, a number of participants reported using a third party tool which allows consumers to compare energy tariffs based on their smart meter consumption readings. The most common example mentioned within the research was the Octopus Compare app which is a third party tool that uses smart meter consumption readings to compare Octopus Energy tariffs. This tool is currently only available for Octopus tariffs and customers, who can provide their account number and an API key to make the comparisons. The participants that used these tools said they were extremely useful.
“Octopus Compare was the one that basically put the figures side-by-side, black and white, actually it was red and green because it showed if it was cheaper (green) or more expensive (red). And Agile was green based on my past usage.”
“The calculators were key in comparing across Octopus, that helped.”
More engaged consumers used an array of bespoke resources
Finally, a number of participants reported using relatively niche resources to further their information gathering. These included Facebook groups such as a BMW drivers group, YouTube, podcasts and forums. One participant reported using an Octopus Energy subreddit which “was very useful because it was filled with screenshots of stories from people’s actual experience with being on the different tariffs available”.
The use of these resources were primarily amongst tech-savvy consumers who wanted to make the most of their household technology (e.g. EV, heat pump, storage heaters). These consumers tended to report higher levels of knowledge and interest in energy tariffs, often enjoying the exercise of getting into the details and learning more about what tariffs are available.
“I am a bit of a geek… technology is my thing. So I do look around, I do look at tariffs. I’m the kind of person that even when I was getting the [EV] I was watching Youtube reviews every night”
Decision making
Once consumers have been introduced to DSR tariffs and they have done their research they have to decide which tariff to take up. The primary factors that appear to influence this decision are cost and their relationship with their current provider (as shown in Figure 3).
For those learning about DSR tariffs through their provider, their decision making often came down to their trust in the provider. This consumer group felt more confident switching to these energy tariffs when guided by a trusted provider. They preferred this support because many did not feel confident doing their own research. [8]
“I didn’t have the time or the knowledge to do my own research but I knew I could trust my provider, I could leave any time and it didn’t cost me anything extra.”
Even the more active consumers often stuck with their current provider. Common reasons for this included trusting the brand, having had a good experience with their provider to date or liking their customer service. Some consumers chose not to consider other providers due to perceived difficulties switching or because they used the Octopus Compare tool to pick their tariff, thus discounting other providers.
All participants were motivated by picking the tariff that would be the cheapest. This was however weighed against the time it would take them to work out which tariff would be cheapest. This moves us onto the different decision making styles of consumers.
Low vs high search effort
Consumers considering DSR tariffs were able and willing to dedicate different amounts of time and resource to their purchase journey. The more technologically enthusiastic consumers were typically willing to invest a lot of time and resources into working out the best deal for them and being confident in comparing different tariffs. Other consumers decided on their tariff much more quickly, with some recognising this might not be the cheapest tariff for them but feeling it was not worthwhile to dig deeper, either due to the time involved or the complexity of trying to work this out.
“I don’t know if I made [the best decision]. There is a lot of information out there and you can make a better decision if you spend time on it.”
This can be seen in the amount of time consumers spent researching their options. In our survey of Which? members, 44% reported spending under an hour in their journey, most of whom did so in a single session. Conversely, a third (35%) of Which? members on DSR tariffs reported spending multiple hours researching, often over multiple sessions.
Figure 4: Time spent researching electricity tariffs
Source: Which? survey with Which? members. "Q. How much time did you take researching and purchasing the electricity tariff you are on?" Base: Those surveyed on a DSR tariff (n=234)
After this process, some consumers choose not to move onto DSR tariffs. This was for an array of reasons. Some consumers discounted these tariffs for practical reasons, such as feeling the tariffs would not align with the specific energy usage patterns of their household or because they were already locked into their current tariff. Others discounted them due to the information they encountered, either finding these tariffs financially unappealing (e.g. higher day rates) or feeling they needed to dedicate more time in the future to better understand these tariffs and be able to make an informed decision.
Chapter 2: What are the frictions in the journey
In Chapter 1 we established the range of paths consumers take when joining a DSR tariff, highlighting how this may vary based on consumers' needs, knowledge and experience of the energy market. This variation is particularly evident when comparing more active early-adopters with those who have adopted tariffs through their providers’ recommendations or initiatives.
Our research has identified several challenges that arise across these different DSR entry points, affecting consumers at various stages of their journey. These challenges can emerge at any stage in the researching process, but are particularly apparent when attempting to compare the options and in evaluating the impact of these tariffs.
Three main challenges emerged through the analysis:
- Consumers often miss out on DSR tariffs;
- The process of finding a suitable DSR tariff being time consuming and mentally stressful; and,
- Consumers are not always able to see if they're benefiting from a DSR tariff.
Each of these three challenges is briefly described in Figure 5 below.
Figure 5 - Three key challenges identified in consumers’ DSR decision making journey
In this chapter we will explore each of these key challenges in more detail, linking back to where in the consumer journey they may be more prevalent and who might be impacted.
Consumers often miss out on DSR tariffs
Many consumers have historically struggled to engage meaningfully with the energy sector due to its complexity and inclusion of jargon. This has been illustrated by consumers within the current research, finding that engaging with energy options requires detailed knowledge, which can often deter consumers.
“We could do it but you have to be reasonably intelligent to interpret what it is telling you. They don’t make it easy, you put in your scenario but then you can’t compare like with like. It’s almost like apples and pears. It isn’t really presented in the same format.”
These challenges are also present, and evidently more pertinent, when consumers could benefit from DSR tariffs. Many consumers who have technologies that mean they could benefit the most from DSR tariffs are either not aware of or not considering DSR tariffs. In our Sustainability Tracker Survey in June 2024, only half of consumers with an EV said they were on a DSR tariff (51%). In this research we spoke to multiple participants who were not aware for a long period of time after purchasing their EV and charging their vehicle at home that they could benefit from a DSR tariff. For example, the quote below comes from a consumer that had an EV for over two years before they became aware of DSR tariffs.
“I started looking because someone said I get cheaper electricity overnight and that started to make me think that I should be getting cheaper electricity overnight and that is when I started to inquire.”
During this period, consumers like the one above were likely paying significantly more for their electricity than necessary.
As most of the traditional comparison websites are not currently set up for consumers to see and compare more complex tariffs, this general lack of awareness of DSR tariffs is likely to continue. Unless DSR tariffs become a much more visible option to consumers, the consumer detriment of missing out on cheaper energy tariffs will grow as EV and heat pump ownership increases.
The cognitive and time demands of research
Another common issue in the energy sector which looms larger when consumers attempt to switch to DSR tariffs is the time and mental engagement it can take to research and compare options.
“It is just one of those things you have to do in life.”
“We are lucky we have got the time to do this type of research. It can be time consuming doing this thing.”
DSR tariffs often come with specific eligibility requirements and variable unit rates that change based on the time of day, making them harder for certain consumers to understand and evaluate than standard tariffs. Many express the need for mental ‘headspace’ to thoroughly explore their options, often stretching this process over multiple sessions and extended periods.
“I dipped in and out for roughly a month… It was quite time consuming, I put in a lot of effort. It was constantly in my head for that month, ‘you should do something, you should do something’. Every weekend I spent 30 minutes to 1 hour.”
“I spent tens of hours, spread over several months. That was getting knowledgeable about this space and then it is a sort of an ongoing thing comparing options.”
Consumers described feeling overwhelmed by the complexity and volume of information, leading to what some described as ‘decision paralysis’. This can make it challenging for consumers to arrive at a clear decision in which they feel confident about.
Most consumers rely heavily on tools like comparison websites to identify the best tariffs for their needs. As mentioned previously, comparison tools for more complex DSR tariffs are severely limited, either they don’t include them at all or lack the ability to personalise searches according to what technology consumers use, or their patterns of consumption, which would help them find the best tariff. As a result, consumers are unable to make straightforward, like-for-like comparisons between DSR tariffs and other energy tariffs.
“I found it quite challenging, I am quite tech savvy but there wasn’t really a central place where everything was. It took a lot of time, there wasn’t a site where you could go ‘we use this much per day, we do this many miles, this is the best tariff’. There was none of that and that would have been much easier.”
“Having the information presented in a standard format, so you can literally see on say line two it shows kilowatt hours, line three etc. would help a lot to compare.”
Whilst there are some tools available to help make this comparison easier, such as those developed for specific suppliers (e.g. the Octopus Compare app), they typically limit consumers to evaluate only that provider's tariffs. [9] This restricts consumers from making fully informed choices across a range of providers and options, hindering their ability to engage with the sector.
As a result of this cognitively difficult exercise of comparison and evaluation, consumers tend to spend varying amounts of time researching and comparing DSR tariffs. Some consumers are less able or willing to spend time on this activity and, as a result, there is a risk they may end up choosing tariffs that do not align with their needs and behaviours or are more expensive than other options.
This combination of time investment and cognitive load highlights the need for more user-friendly resources to support consumers in making these informed decisions.
Consumers have difficulty assessing the benefits of DSR tariffs
Whilst some consumers are aware of the cost savings achieved by switching to DSR tariffs, this understanding is not universal.
Less engaged consumers and those with lower confidence in navigating the energy market are often uncertain about whether they are actually saving money as a result of switching to a DSR tariff. Many are also unaware if they are on the best tariff for their household.
This uncertainty was often due to external factors in the energy sector, such as recent large changes in the price of electricity, which has made it difficult for some DSR consumers to know if they have saved money, or not. In addition, the complexity of DSR tariffs such as varying rates based on time of day, makes it challenging for consumers to directly compare them with standard tariffs. As a result, many consumers find it difficult to understand if they are saving money or if they are better off since switching from standard tariffs.
“It's difficult to say because the time when energy prices went up and then they put the energy cap on. So energy prices have changed so much I couldn’t really tell you if I’ve saved money. I would need to really dig into the bills and look at the kilowatt hours etc. And there is just no way I have the either willingness or time to do that. So I have no real way of knowing if it is costing me more or less.”
This lack of clarity creates a barrier to engagement, leaving many consumers without a clear understanding of their potential savings, reducing their confidence in their decision and making them less likely to endorse DSR tariffs to others.
Chapter 3: What does this mean for the future of demand side response tariffs?
Throughout the last two chapters we have explored the various consumer decision-making processes associated with DSR tariffs and highlighted common challenges experienced by consumers who have explored making the switch.
Despite these issues, it’s important to note that early adopters of DSR tariffs are generally very satisfied. Many consumers on DSR tariffs spoke positively about their experience, largely due to these tariffs fitting within their lifestyle. Some participants mentioned initial challenges in shifting their mindset and habits to use energy during off-peak times. However, these challenges were typically overcome as new habits became more integrated into their daily routines.
“It has been seamless other than the odd couple of nights where we forget to press the schedule button on the dishwasher. That’s it really, it's just your own actions and remember to actually press the buttons etc.”
Those who are more engaged and confident also saw financial savings. Some could see the savings directly reflected in their bills and apps, while others are able to calculate these savings themselves.
“I’ve probably saved about £40 a month by doing stuff overnight.”
These consumers often enjoyed getting the tariffs to work for them, frequently using apps and smart technology to maximise these savings.
“It has been great so far, super simple… Octopus are quite clear on their bills so we can compare to two years ago and see the savings.”
Some even found it rewarding to monitor real-time rate changes and observe their energy costs drop, underscoring the satisfaction among those who actively engage with and understand their DSR tariffs.
Key changes needed
However, as highlighted in Chapter 2, there are significant frictions throughout the customer journey, from low levels of initial awareness and narrow understanding of options, through to difficulties in the research and decision-making processes. Making changes to address these frictions could substantially improve the wider take-up of DSR tariffs beyond early adopters and lead to more customers being able and willing to access the benefits available. These frictions are also limiting the extent to which consumers can compare prices and options effectively. The retail energy market has already had long-standing issues with consumer engagement damaging competition in the market, and the issues we identified with tariff comparison are even greater for DSR tariffs than standard tariffs. If these comparison frictions can be improved, there is a much better chance that the market develops more competitively, with fewer consumers excluded from accessing the best deals.
Our research also found substantial diversity between consumers in the triggers for engagement, types of research taken and decision-making processes. Recognising these diverse consumer approaches will be essential for energy providers, comparison websites, and policymakers to ensure that services are tailored to meet the needs of different users.
Improving awareness and prompts to engage
Awareness of and familiarity with DSR tariffs are still low across the general population, with the DESNZ Public Attitudes Tracker finding two-thirds of consumers know at most ‘a little’ about time-of-use tariffs. Our research further identified issues with consumers knowing or understanding about whether DSR tariffs were a suitable option for them. However the experiences of our participants also show there are effective means to prompt consumers to engage, commonly via contact from a supplier, feedback from peers, opportunities to save money or the purchase of new technology.
Our research suggests suppliers will continue to play an important role in prompting further engagement with tariffs. However, policymakers should be exploring how to broaden awareness and prompt engagement. This is particularly important in light of our findings that consumers contacted by suppliers commonly did not shop around or compare options afterwards. An overreliance on suppliers for information on DSR tariffs could lead to weaker competition, with worse outcomes for less engaged consumers who may end up on tariffs which are not best value. Further, without broader means to prompt consumers, there is a risk that too few consumers take up DSR tariffs even when they could be substantially cheaper for their circumstances.
Reducing barriers to making comparisons
Many of the frictions we identified in our research relate to the process of comparing options. Many of our participants found the process cognitively difficult, time consuming, experienced decision paralysis, or were put off comparison altogether. Without improvements, these problems are only likely to get worse as less engaged consumers enter the market as technologies which make DSR tariffs more attractive, like EVs, spread. Take up could even be lower if consumers are not confident they can navigate the complexity.
Improving price comparison services should be a priority. Our findings highlighted that while there are resources available to help consumers compare, they either don’t offer direct financial comparisons between tariffs or are limited to offerings from a single supplier. The government did make some progress on this with the Smarter Tariffs Smarter Comparisons project, including the development of an open source tool. However, it does not seem to have had a galvanising effect on the comparison options actually available to consumers. The government and Ofgem need to urgently identify what the barriers are to more effective services coming to market.
Ofgem’s recent consent solution proposals could improve the opportunities for smart data information to be used by third parties to securely offer consumers better tariff comparisons. There may also be potential for the government to advance a smart data scheme in energy via the smart data powers in the Data (Use and Access) Bill. However, progress is slow and needs to speed up, particularly with Marketwide Half Hourly Settlement due to begin rolling out from September 2025.
Improvements to price comparison services would be a big step forward, but there is also scope for consumers to have better access to expert advice and guidance to help them compare options. This might involve a more active role for the government or charities to assist consumers directly. However, it is likely most consumers will still turn to their energy provider for information in the first instance. Having well-trained staff available to answer questions in a clear and non-pressuring manner will be vital.
Improve understanding of cost savings
Even among the early adopters in our research, there are those who cannot say for sure whether they are saving money by being on a DSR tariff or by how much. This issue risks undermining trust in the market if consumers later find out they were not on a suitable tariff and might have been saving money on an alternative offer. Improving understanding is not just about avoiding bad experiences, but also about helping consumers to share good experiences. Consumers are more enthusiastic about DSR tariffs if they understand their savings well, and these people are more likely to tell their family and friends about tariffs if they do, something we identified as an important prompt for others when moving to a DSR tariff. Suppliers should consider how to make it much clearer for consumers whether they are on a suitable tariff and how much they are saving compared to a standard fix.
Next steps
Using the insights from this research, we will continue to identify the key policy changes required to address the challenges highlighted and support the development of a consumer-focused DSR market. These recommendations will be detailed in a forthcoming policy paper, and we invite engagement with all interested stakeholders as we shape these proposals.