Opower, Alex Laskey, & Keeping Up (Well… Down) With The Joneses

Are people more inclined to take action on an issue (one of the major consumer issues of today — energy consumption) when they think other people are doing better than they are? Alex Laskey and his company, Opower, believe so. Matter of fact, Lasky and Opower allied with utility companies to deliver personalized home energy reports, all based off this acumen.

Characteristics of human behavior can incite a consumer to change because of social norms. Keeping up (well… down) with the neighbors, you find out that your neighbors are running their fans in order to turn off the air conditioner — saving energy and saving money — and guess what, that you are likely to do the same thing to follow their lead. “Oh, for sure, our bill went down, too!” The neighborhood is doing better for the planet, and we all feel better, too.

Helen Walters’ post this topic, “The psychology of energy savings:Talking behavioral economics with Alex Laskey and Sendhil Mullainathan,” starts out:

“For the past five years we’ve been running the largest behavioral science experiment in the world,” says Alex Laskey in today’s TED Talk, given at this year’s 2013 conference in Long Beach. “And, it’s working.”

Energy waste is simply not a funny thing. Take coal — it produces energy, but how much water does it take? An Annals of the New York Academy of Sciences report, “Full cost accounting for the life cycle of coal,” is pretty direct in talking about the cost and waste to produce such stuff:

“We estimate that the life cycle effects of coal and the waste stream generated are costing the U.S. public a third to over one-half of a trillion dollars annually. Each stage in the life cycle of coal—extraction, transport, processing, and combustion—generates a waste stream and carries multiple hazards for health and the environment.”That should be the reason we all say no to energy waste, however, it is social norms that spur us to act.”

The problem with coal is exponential as Laskey points out, “Laskey shows the amount of coal that should be able to power a light bulb for a year. However, because of massive energy waste, 90% of the coal’s energy is wasted.” The up side of this is through energy conservation — if you save on energy, you are saving all that would-be-wasted energy. So, the message remains — save on energy. To make this message effective, Opower notes that behavioral science work is as successful as applied science.

People’s energy consumption changes for the better after receiving these reports — either in the mail or through their app and website — and the effects appear to be long-lasting. This year, Laskey says, Opower expects to inspire 2 terawatt hours (TWh) in saved electricity. That’s enough to power a city of more than a quarter million people for a year.

On Opower’s blog, a team of Opower staffers write, “extensive research has shown that people often respond more strongly to so-called social norms (like altruism and peer pressure) than to market norms (like cash bonuses or discounts).” Working with over 80 utilities serving about 15 million customers on 3 continents, Opower has helped save customers $200 million or 2 terawatt-hours (TWh) of electricity since it launched in 2008.

This year, Opower is set to help us save another 2 TWh of electricity, approximately half what the US solar power industry generated in 2012.

Ever notice if someone mows their lawn, others start doing the same? Let’s use that sort of human response to help save energy, money, and our climate.