Exclusive: Households in energy cashback program nearly double, but actual power savings fall

The number of households enrolled in Korea Electric Power Corporation's residential energy cashback program has nearly doubled over three years, but the average electricity saved per household has actually declined, data show. Observers say the program's effectiveness should be judged not just by enrollment figures but by whether it is delivering real reductions in power consumption — especially as operating and promotional costs have risen and cashback eligibility requirements have been loosened.

According to data submitted to the office of People Power Party lawmaker Park Su-min, a member of the National Assembly's Climate, Environment and Energy Committee, the average electricity savings per participating household fell from 54 kilowatt-hours in 2023 to 41 kWh in the first half of this year — a 24 percent drop in roughly three years. Over the same period, the average savings rate per household declined each year, from 19.4 percent to 17.8 percent.

The residential energy cashback program rewards households that reduce their electricity consumption below the average for the same month over the previous two years. Participants receive cashback based on how much they save, which is then deducted from their electricity bill. The program aims to cut power consumption while easing the burden of electricity costs on households.

The government and Korea Electric Power Corporation have been lowering the bar for participation and expanding benefits. The Ministry of Climate, Environment and Energy and the utility announced they would raise the cashback rate for meter readings from July through December this year, from the existing range of 30 to 100 won per kWh to 30 to 120 won. Previously, households had to reduce consumption by at least 3 percent to qualify; going forward, those who cut usage by between 1 and 3 percent will also receive 30 won per kWh.

Enrollment has grown rapidly. The number of participating households rose from 930,000 in 2023 to about 1.82 million in the first half of this year, nearly doubling in that span.

Costs have climbed alongside the expanding enrollment. Operating expenses grew from 30 million won ($22,100) in 2022 to 140 million won last year. Promotional spending rose over the same period from 29 million won to 138 million won. Of last year's promotional budget, 60 million won went to SNS and online advertising, while 55 million won was spent on outdoor advertising and similar channels.

Meanwhile, the average cashback payment received by participating households has fallen. The average payout per household dropped 23.6 percent, from 3,960 won in 2023 to 3,025 won in the first half of this year, a decline attributed to the simultaneous decrease in both average savings volume and savings rate.

Some observers argue that expanding the program's reach through higher operating and promotional spending is a separate matter from assessing whether the program is achieving its core purpose of reducing actual power consumption. "The number of households in the energy cashback program has grown significantly, but the average payout and savings rate per household have actually fallen," Park said. "With operating and promotional costs more than doubling, the program should not simply aim to grow enrollment — it needs a thorough review of whether it is producing real electricity savings and benefits that people can actually feel."