Methodological Considerations Regarding The Segmentation Of Household Energy Consumers

Over the last decade, the World has shown increased concern for climate change and energy security. The emergence of these issues has pushed many nations to pursue the development of clean domestic electricity production via renewable energy (RE) technologies. However, RE also comes with a higher production and investment cost, compared to most conventional fossil fuel based technologies. In order to analyse exactly how Romanian electricity consumers feel about the advantages and the disadvantages of RE, we have decided to perform a comprehensive study, which will constitute the core of a doctoral thesis regarding the Romanian energy sector and household consumers' willingness to pay for the positive attributes of RE. The current paper represents one step toward achieving the objectives of the above mentioned research, specifically dealing with the issue of segmenting household energy consumers given the context of the Romanian energy sector. It is an argumentative literature review, which seeks to critically assess the methodology used for customer segmentation in general and for household energy users in particular. Building on the experience of previous studies, the paper aims to determine the most adequate segmentation procedure given the context and the objectives of the overall doctoral research. After assessing the advantages and disadvantages of various methodologies, a psychographic segmentation of household consumers based on general life practices is chosen, mainly because it provides more insights into consumers compared to traditional socio-demographic segmentation by focusing on lifestyles and not external characteristics, but it is also realistically implementable compared to more complex procedures such as the standard AIO. However, the life practice scale developed by Axsen et al. (2012) will need to be properly adapted to the specific objectives of the study and to the context of the Romanian energy sector. All modifications will be based on the results of previous research performed by us and on a qualitative study among industry experts and consumers.