Residential energy demand and the interaction of price and temperature: British experimental evidence

The responsiveness of heating energy demand to pricing is shown to be dependent on temperature and vice versa. This is investigated empirically using residential electricity demand data obtained under conditions of price variation from a British time-of-use pricing experiment. Results confirm that consumer responses to higher electricity prices are conditional on temperature levels, particularly during the daytime and for households with high overall levels of electricity consumption and previous experience of time-of-use tariffs.