Energy Conservation Through Peer Pressure

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If you had proof that you use more energy than 78% of your neighbors, would you take steps to cut back?

Turns out that most of us would.

Through a pilot with OPower, Xcel Energy has been sending customized home energy reports to 50,000 customers in Minnesota. The reports compare each customer’s energy use to that of 100 neighbors with similar sized homes.

OPower uses a statistically rigorous algorithm that factors in addresses, property tax data (including home square footage) and Census data to select the most relevant peer group. This is especially important in urban areas that have diverse housing types. The houses on our block are half the size of those across the alley, so a comparison based solely on address wouldn’t be helpful in our case.

Social norms can be a powerful motivator

How do you get people to use less energy without using price as the primary motivator?

I would like to think our household uses far less energy than others, but I’m sure it would be eye-opening to see where we really stand. OPower has found that customers who receive the report reduce their electricity use an average of 2% over those in the control group. That may not sound like a lot, but it adds up quickly.

I wish we could get similar reports in other spending categories. My husband can’t go to the garden store without buying ridiculous amounts of landscaping material. We really don’t need another variety of fescue grass. I bet he would think twice if he knew how much more he’s spending than our neighbors are. (Not that I have any areas where this applies, of course….)

Smiley faces

As any casino owner knows, intermittent positive reinforcement is more motivating than negative reinforcement. When OPower first started the home energy reports, they included a frowning face on the report if the customer’s consumption was higher than others’.

That didn’t go over too well. OPower has since refined the reports so there are only smiley faces – no frowning ones.

As B.F. Skinner discovered, intermittent positive reinforcement is even more powerful than constant reinforcement. OPower has found that customers are more motivated to reduce their energy use when they receive a home energy report every other month instead of every month.

Backlash?

Researchers were concerned that if people discovered they use less energy than their peers, it would give them “permission” to use more. We’ve found that’s not the case.

People who start in the top (best) quartile tend to stay there. On the other end of the spectrum though, we’ve had a few customers opt out of the program because they were consistently ranked lowest and didn’t want to be reminded of it.

We’re expanding the program to 100,000 customers in Minnesota, 50,000 in Colorado and 15,000 in New Mexico. I’m hoping our house gets chosen. If I find out we’re using more energy than 78% of our neighbors, I’ll be turning the conservation screws even tighter, and I can guarantee you that we won’t stay ranked 78th.

Article by Sheila Knudtsen, appearing courtesy Xcel Energy Blog.

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About Author

Walter’s contributions to CleanTechies over the past 4 years have been instrumental in growing the publications social media channels via his ongoing editorial and data driven strategies. He is the founder and managing director of Sunflower Tax, a renewable energy tax and finance consultancy based in San Diego, California. Active in the San Diego clean technology community, participating in events sponsored by CleanTech San Diego, EcoTopics, and Cleantech Open San Diego, Walter has also been a presenter at numerous California Center for Sustainability (CCSE) programs. He currently serves as an adjunct professor at the University of San Diego School of Law where he teaches a course on energy taxation and policy.

2 Comments

  1. Sheila, this is very interesting, thanks for sharing. At the Sustainable Performance Institute, we’ve found that providing emotional-based incentives can be nearly as powerful as other incentives such as financial. For instance, some of the firms we are working with have a sustainability or green guru or team, but oftentimes this isn’t open in the way that it encourages employees to share wisdom, actively participate, etc. Even non building industry companies such as 3M have great stories about the value, in terms of employee happiness and product innovation, of empowering employees. Finally, I was at a presentation by Buro Happold on their Living Building Challenge project at Hawaii Preparatory Academy, and they identified that one of the most important keys to success on the project was the buy in from students and employees, because as building users they had such a critical impact on building operations. This is all to say that OPower’s project really hits the nail on the head and I hope it expands to Massachusetts soon.

  2. If I understand this Peer Pressure idea, the Utility (Xcel Energy) is sending feedback to customers because the Utility wants them to use electricity more efficiently (read: use less). Really? They want to try behavior modification to achieve the reduced demand.

    So, my first reaction is that I like conserving energy and our Utility bills show it. But then I’m troubled about the loss of free choice. I don’t like being hassled and I doubt my neighbors do either. I’m delighted with the Utility’s enlightened posture but I’m dubious and curious.

    Then I wonder what else the Utility might be thinking. For example, if there were projects available that would reduce energy usage, would the Utility publish this information? Would they provide an attachment to the billing document with known projects? I’m thinking of more that just replace your refrigerator with Energy Star or hire someone to clean your ducts or go build a new house and do it right this time. The project list would be dynamic and reflect where the best returns are. Think: best available technology for either existing buildings and/or new ones.

    Let’s assume good projects become known and supported by the Utility. Now, in this context, where would the best economies occur? Would you pick behavior modification or the project list? Let’s say I don’t leave the lights on any more. Next, I think if I were movitated by the behavioral tricks and bought in, the next thing I’d need would be a good list of options to do something constructive and get the peer pressure people off my back … like maybe a project list. Yes? No?

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