Potential role of frugal innovation for diffusing energy management systems in Japan

TLDR: In this article, the authors investigated whether and in what respects frugal innovations might help in overcoming barriers for the adoption of home energy management systems (HEMS) in Japan, and they found that while potential users appreciate the need for using HEMS, the actual adoption of HEMS in the country has remained low, suggesting a gap in consumer intention and its actual implementation.

Abstract: Increasing energy consumption is associated with major negative impacts on the climate. The Japanese government has sought to promote home energy management systems (HEMS) in private households as a measure to enhance energy security in the country. Reports suggest that while potential users appreciate the need for using HEMS, the actual adoption of HEMS in the country has remained low, suggesting a gap in consumer intention and its actual implementation. High upfront investment, high switching/operating costs and the perceived technological complexity are reported as inhibiting the adoption of HEMS in Japan. The objective of this chapter is to investigate whether and in what respects frugal innovations might help in overcoming barriers for the adoption of HEMS. Frugal innovations offer affordable excellence for significantly lowered prices, are focused on core functionalities, and enable optimized performance levels. Frugal solutions may enhance the consumer perception of benefits of HEMS, while reducing negative perceptions regarding high technological complexity or expensiveness. Although frugal innovation could help in solving the attitude-behaviour gap, to date, there is little research to argue the effect of frugal innovation on consumers’ decision making process. This research contributes to the innovation adoption or resistance literatures by applying frugal innovation, which allows innovation researchers and managers to understand the mechanism of the innovation diffusion more effectively.