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Energy Conservation by Peer Pressure

by Xcel Energy. Published Fri 15 Apr 2011 15:11

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.


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.


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