What If the Neighbors Are Watching?

How peer pressure can be used to lower energy bills
Light bulb
Light bulb Pexels

By now, most of you likely are receiving those energy efficiency reports in the mail from your local utility company — the ones with the colorful bar graphs that show you how your energy use stacks up against your neighbors. This isn’t an idle “FYI’’ exercise, but a carefully designed strategy aimed at encouraging you to cut back on the power.

The approach is grounded in social science research, based on the belief that if you find out your neighbors are doing the right thing, you will want to do the right thing too. “This isn’t about pushing or prodding people into a choice, but informing them about a choice,’’ said Robert Cialdini, professor emeritus of psychology and marketing at Arizona State University.

“Simply learning what people around you have chosen to do about their energy consumption informs you about what is appropriate, and influences you to do the same,’’ he adds.

The bar graphs compare your individual energy consumption with the overall use among 100 of your closest neighbors, and also shows you a subset of how well you are doing compared to your most efficient neighbors. (They also provide some helpful energy saving tips so, if you’re a flop this time around, you can do better in the next report.) Moreover, when you earn a “good’’ or “great’’ you get rewarded with one or two smiley faces.

Neighbor Comparison
Bar graphs compare customers energy usage with their neighbors’. Opower

Don’t dismiss or underestimate the impact of these reports. Studies show they are working.

The Arlington, VA-based company behind the reports, Opower (recently purchased by Oracle), announced in June that the program thus far has saved more than 11 terawatt-hours (TWh) of energy working with 100 utilities across four continents.

The figure represents enough energy to power more than 1 million American homes or take 1.6 million cars of the road for a full year, according to the company. Moreover, it amounts to more than $1.1 billion in savings on customers’ energy bills, Opower said.

It may seem at first that this is about competition, but there is a larger dynamic at work. The approach originates from the sociological concept of social norms, which holds that members of a group will respond to appropriate — or inappropriate — values, beliefs, attitudes and behaviors held by others within their group.

Cialdini and P. Wesley Schultz, professor of psychology at California State University at San Marcos, conducted a study “in which we showed that simply informing people with a door hanger that their neighbors were undertaking energy savings reduced their own energy savings dramatically in the next month,” Cialdini says.

“They had been using about 14.5 kilowatt hours per day, which dropped to about 12 kilowatt hours per day,’’ he adds. “It made a huge difference. People want to do right by simply following what those around them are doing. It doesn’t require a lot of cognition. You don’t have to think about it. It’s fundamental to human behavior, and you see it in nature. Birds flock together in beautifully coordinated systems, cattle herd together, even social insects swarm in a patterned way.’’

Birds of a feather, flocking together. Pexels

This research and other studies by Cialdini, demonstrating how social norms can influence environmental issues, prompted the founding of Opower, which was launched in 2007. Opower works with utility companies to convince consumers that saving energy is good for society — and that doing so is part of a belief system practiced by their closest neighbors. Cialdini served as the company’s chief science officer during its first three years.

Dozens of utility companies here and abroad have signed on. They provide Opower with their customers’ energy consumption, and the company uses a variety of additional data sources and computer algorithms to assess household characteristics, derive their estimates, and draft periodic reports for utilities to send to their customers.

“Their approach to reducing household energy consumption is so effective for a simple reason — they followed the evidence when developing their norms-based tools,’’ says Ezra Markowitz, assistant professor in the department of environmental conservation at the University of Massachusetts, Amherst.

“They looked at what experts in human decision-making have learned about the underlying drivers of behavior and applied those insights at scale,’’ Markowitz adds. No one had really done this in the utility world before Opower. “Utilities are excited because Opower offers an approach to reducing demand that costs almost nothing to implement and is enjoyed by many of their customers.”

He is one of them. “We usually go back and forth between

good’ and

very good,’ one smiley face or two,’’ he says.

Bar Graphs
Utilities designate Energy Saving Days. Opower

Opower cooperates with some of the largest utility companies in the world, including Exelon, Pacific Gas & Electric, National Grid, Con Edison, Southern California Edison, E.ON UK, ENMAX Energy, ComEd, and TNB in Malaysia. Last year alone, Opower and its partners saved 3.2 TWh of energy — twice as much energy as America’s largest residential solar company generated over the same time period, the company said.

What’s in it for the utility companies? Initially, you might think they would want consumers to use more energy in order to increase profits. But there are more powerful incentives at work for them, making them eager to get on board. Most utilities are either required to reduce energy consumption by a certain amount every year, and are compensated by the public utility commission for doing so, or they are interested because they are looking for ways to avoid building new power plants, which can be very expensive. Also, they are trying to reduce peak demand when there are spikes in energy use, often between 3 and 6 p.m.

While social norms may be the major force, competition likely also influences consumer behavior. I know when my reports come — and mine consistently say “good’’ — I’m nevertheless frustrated over the fact that they don’t say “great,’’ and that some of my neighbors are doing better than me. This goads me into trying harder.

“I don’t think competition can be easily teased apart from social norms,’’ says Shahzeen Attari, assistant professor in the school of public and environmental affairs at Indiana University, Bloomington, who says she too is doing “really well’’ on her own home energy reports.

“One can argue that a person who is using a lot of energy and finds out her neighbors are not, may try to compete with them to decrease,’’ she adds. “In my opinion, social norms are complexly formed, and competitively keeping up with the Jones is part of it.’’

Marlene Cimons writes for Nexus Media, a syndicated newswire covering climate, energy, policy, art and culture.