Keeping Green With The Joneses
It’s generally acknowledged that it’s fairly difficult to get humans to change their bad behavior: witness the billions of dollars spent on weight loss and quitting smoking aids each year. Inducing people to go green in their household is another task for which gentle prodding, moralizing and even outright guilt are unlikely to produce results. But what about time-tested peer pressure?
Virginia-based software provider OPOWER has a peer-pressure green solution: an “advanced customer engagement platform” that works with utility providers to keep track of household or small business power use in a neighborhood and makes the information available to all utility subscribers in a given neighborhood. Essentially, via OPOWER’s data tracking, households can see how much power they are using compared to the neighbors. The incentive? OPOWER rates your household with first-grade-style icons: smiley faces for reductions in power usage. The company calls its solution “a unique combination of an all-channel communication approach, highly targeted messaging, energy usage analytics and applied behavioral science.”
Consumers can receive the reports, which keep track of both gas and electric use, even when they come from different utilities, in the mail, online or even delivered as graphic reports to their wireless devices. More than 35 utility companies in the U.S. use the service (it’s easy for utilities to deploy the program), and it currently has about one million households as subscribers. The reports also include tips for reducing energy usage, covering energy-reduction actions both quick and easy and more complex and long-term.
Does it work? According to OPOWER (and their methods of measurement have been verified by academic and professional measurement and verification organizations), nearly 85 percent of people exposed to the service take action in their household to reduce power consumption, resulting in an average energy savings among participating households of between 1.5 and 3.5 percent. So chalk up another task for maintaining your image in your neighborhood: buy a nice car, keep your lawn green, make sure your children are wearing clean clothes, and reduce your carbon footprint.
Given that one of the most important features in the creation is a smart grid is a way to increase awareness of energy usage for power consumers (usually in the form of smart meters), the OPOWER solution, as its use spreads, will become an important component in smart grid technology. Consumers may not run out and buy smart meters for themselves, but they will certainly pay attention to personalized power usage data, particularly as it compares to that of friends and neighbors. Utility partner companies of OPOWER also benefit: according to OPOWER, which leaves space on reports for the promotion of energy-reduction incentive programs offered by utilities, a 20 percent increase in the participation in such programs occurs.
To be fair, the technology isn’t only about inspiring people’s base human competitive instincts. Through greater awareness of the energy use patterns, people may begin changing their behavior. For instance: realizing that their energy use does not abate when they’re not at home during the day or when they are on vacation, households may be more likely to begin turning off computers and lights or turning off the air conditioning, rather than merely turning it up, when the house is empty. Consumers may also become more interested in replacing their traditional light bulbs with energy saving bulbs, or choosing more energy-efficient appliances when it’s time to replace old ones, just to see how it affects their OPOWER rating (“Honey, we really need to earn our smiley face!”)
One big challenge to a technology like this – and ensuring that people respond appropriately to it – is striking the right tone. Too passive, and no one will notice the efforts. Too didactic or dictatorial, and consumers will resent the morality tale. (One California utility participating in the program began using “frown” faces for households that either used very high amounts of power or failed to reduce their use relative to neighbors, but had to abandon the icon when consumers complained.) In addition, it was found that consumers who initially used less power than their neighbors in some instances actually increased their power use, possible figuring that they could afford to be a little less spartan. This is where the behavioral science comes in. In an interview with National Geographic, OPOWER executive for client solutions Patrick Stanton said, “We’re using behavioral science that’s straight out of the university to get people to cut their energy use.” The company would know: OPOWER’s chief science officer, Robert Cialdini, is the author of “Influence,” an popular 1984 book on the science of motivation behind consumer behavior. The book has been reviewed as, “the best book ever on what is increasingly becoming the science of persuasion.” According to Dr. Cialdini, the program is effective because it successfully engages all customer segments, regardless of income, age, educational level, or access to technology.
The concept is well studied. Last year, MIT researcher Hunt Alcott of MIT and NYU released the results of a study of household energy use with and without the program. Using data from 80,000 households in Minnesota, Alcott concluded that the program reduces energy consumption by nearly two percent relative to baseline. Given the coverage of OPOWER’s program, this two percent has already translated to about $16 million, or 134 million kilowatt-hours, of savings, equivalent to the power used by about 12,000 households in one year. The problem, however, is that with each quarter that passes, the effects begin to wear off for many households. The study concluded that by using a statistical decision rule to profile customers most likely to keep up with their changed behaviors (in other words, finding the motivated consumers and discarding the “fad” victims) and aim conservation efforts at them, the program would be more successful and cost-effective.
The company sees big things for the future. Said company spokesperson Ogi Kavazovic, “If we could take this nationwide — and there’s no reason why we can’t — we can take three million homes off the grid and have as much impact as the entire renewable [energy] sector.”
– Tracey E. Schelmetic