Time to change habits, as well as light bulbs?

We are bombarded daily by advertisements selling us soft drinks, pharmaceuticals, cars, insurance, junk food, teeth whitener, diet programs, and on and on. But when was the last time someone tried to sell you on using more electricity?

I cannot think of a single commercial that encourages us to plug-in, even though electricity is the chief product of 3,000 utilities in the United States.

This speaks to how easy it is to access and use electric energy; its relative cheapness, invisibility, and integral role in daily life. No need exists for utilities to market electricity; we devour electrons blindly.

So how do you convince people to conserve something that they use so much, yet hardly even notice they buy?

Behavioral science may hold the answers, as pointed out in a new report by the American Council for an Energy-Efficient Economy, “Visible and Concrete Savings: Case Studies of Effective Behavioral Approaches to Improving Customer Energy Efficiency.”

Getting consumers to save energy is as much a people problem as a technology problem. Or as the report puts it: “To achieve greater energy savings through energy efficiency, we need to design and build programs that change habits as well as light bulbs.”

The report highlights 10 energy efficiency programs that have done so. The programs include: building operator certification, in-home energy monitoring, media messaging, keeping up with the Jones emotional pressure, ATM-like energy purchasing, in-home energy displays, employer cheerleading, corporate energy management, green recognition, and feebates – fees or rebates for cars based on their energy efficiency.

What do these programs tell us about human behavior when it comes to energy efficiency? For one thing, we need to see how much energy we use, clearly displayed in our homes as we use it. And we need proof – true measurement and verification – that our efforts to conserve pay off. Such data also encourages political support for efficiency programs.

The report finds we worry about social norms – if we learn our neighbors save more energy than we do, we try harder. And believe it or not, money doesn’t really motivate us very much. Or at least we do not always make rational economic decisions. We are more apt to act based on values, curiosity, self-esteem, and other non-economic motivators. When money is used as an incentive, bonuses need to be large and immediate, not spread out over time.

The report is available here. http://www.aceee.org/research-report/e108

Elisa Wood is co-author of “Energy Efficiency Incentives for Businesses 2010: Eastern States,” available at www.realenergywriters.com.

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Comment by Silas Inman on December 2, 2010 at 12:04pm
I agree completely with your deductions in this blog entry. The company I work for actually specializes in energy monitoring that allows users to see their usage in real-time. That is my primarily focus. I think it is extremely important! And will end up being something that comes standard in every home, especially if EVs become more popular.

You see everything else in real-time, cell phone minutes, you can stream videos on demand, you see exactly how much gas is going into your car and how much you are using, why not your energy? Especially if you get charged time of use charges or peak charges.
Comment by Jon LaMonte on November 25, 2010 at 9:47am
This is the very reason that I stopped focusing my marketing efforts on energy efficiency, but more on improving comfort, durability, and indoor air quality(sad, but true). Here in the suburbs of Atlanta, people aren't really concerned with energy efficiency. They will be happy to complain about their high energy bills, but they usually aren't willing to spend money make them lower. What they are concerned with is the fact that there A/C runs all day, but the temperature upstairs never drops below 78 degrees. The other big one is the wooden framed single paned windows that were used in the 90's. Even though this isn't always the major cause of their issues, they are more than willing to drop $15 to $20 grand replacing them, and oh by the way "it will cut my utility bills also".

I always remind the homeowners that an added benefit they will get when they complete the improvements is lower utility bills which will help pay for the improvements over time. That part always produces a smile, but its usually followed by "but these improvements will make my home a lot more comfortable right?". So from a marketing stand point, it doesn't take a marketing degree to figure that one out (again, sad but true).

From the commercial stand point, Georgia Power is now running a large campaign on energy efficiency, including rebates from the utility company, and Energy Star products, which is encouraging. Unfortunately most of us in the metro area are under EMC's and very few of them do any promoting or offer rebates.

So as you say, it comes down to adjusting consumer behavior. Funny thing is, I do have a marketing degree and actually took a class called "Consumer Behavior". One of the things we learned, even in the early 90's, is that it takes some pretty significant events to change behavior (9/11 and $4/gal gas are good examples). Prosperity had some negative effects on people's attitudes toward energy conservation and spending habits. Thats one of the reasons we are in the economic situation we are in now. Maybe, a combination of this and a push by both the private and public sectors will help to change consumer attitudes and habits.
Comment by Steve Waclo on November 24, 2010 at 5:09pm
Hello Elisa:

Thanks for you thoughtful summary of the American Council for an Energy-Efficient Economy report.
(Had to Google those folks...I really need to get out of the house more...:-).

"For one thing, we need to see how much energy we use, clearly displayed ..."

Found some additional comments on this within the report, and while monitoring is needed in homes, they point out how it already applies to automobiles. Our '08 Altima Coupe has a bar graph showing fuel economy, that can be selected from the menu. It's a real eye opener and I've used it to coax 32mpg from the 3.5 V6 @ 70mph on a flat road. Instant, real time feedback! Also, I understand the dash readout in the Prius can be mesmerizing, as well.

Along the same lines, recall what happened to small car sales when gasoline approached, and in some exceeded $4/gal a few years back. Fuzzy on the details, but was that the beginning of the SUV death spiral?

"And believe it or not, money doesn’t really motivate us very much..."

The report explores this concept in greater detail as well, and while the statement is generally true, "lots of money, immediately" does change minds and behaviors". (see gas comment, above).

One more item, and I shall depart.

Early on, above, you made this comment:

"I cannot think of a single commercial that encourages us to plug-in, even though electricity is the chief product of 3,000 utilities in the United States."

While I will admit, the video that follows is second order encouragement to buy electric power (Reddy Kilowatt does not appear in the commercial :-),

http://www.youtube.com/watch?v=0xQtEmISMhQ

...if slick marketing can persuade folks to drop $300 + on what is essentially a glorified electric toaster oven, (apologies to the Amish) there are lessons to be learned. The mind recoils at thoughts of how those $$$ could be better spent on simple weatherization techniques...or the services of a qualified auditor. And don't get me started on operating costs.

Thanks again for bringing this to everyone attention...at very least, I encourage a quick read of the executive summary.

Steve

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