Analysis of Residential Consumers’ Attitudes Toward Electricity Tariff and Preferences for Time-of-Use Tariff in Korea

Abstract

In recent years, a Time-of-Use (TOU) tariff for residential consumers has received much more attention with the increasing deployment of smart meters for residential consumers in Korea. The introduction of the TOU tariff for residential consumers is expected to allow residential consumers to have a choice of electricity rate plans in addition to load management. An analysis of residential consumers’ preferences for the TOU tariff is needed to identify TOU attributes’ levels. This paper analyzes Korean consumers’ attitudes toward current residential electricity tariff and preferences for TOU tariff using demographic characteristics collected by a face-to-face survey. Consumers’ preferences on key attributes of TOU tariff are analyzed using the conjoint analysis, and attitudes toward current residential electricity tariff are estimated by the multiple indicators multiple causes (MIMIC) model. The analysis results of this study show that based on their attitude toward electricity tariff, consumers’ attitudes can be divided into three latent variables, and preferences for TOU tariff are discrete by group rather than continuous by individual consumer.

Keywords

• Time-of-use tariff
• consumer attitude
• consumer preference
• structural equation model
• conjoint
• mixed-logit model