Keeping Up With the Joneses

Our nation's electricity grid is overstretched. Our greenhouse gas emissions continue to climb. What could possibly reverse this trend? Look no further than over your fence.

In a Senate hearing last week we heard from Adrian Tuck, CEO of fast-growing technology start-up Tendril that helps consumers understand and manage their energy use. When consumers see their energy consumption information on their Tendril iPhone app or in-home energy display they make smarter decisions and waste less energy. Tuck testified that, generally speaking, consumers are motivated to save energy in one of three ways: saving money, saving the planet, and beating their neighbors.

Which one was the most effective at driving consumers to cut their consumption? Yep. You guessed it. It turns out many consumers are more motivated to beat their neighbor in energy savings, rather than save money or save the world. It makes sense when you think about it. We're social beings, and often make decisions in social contexts. The science behind this is called behavioral economics. There is a rich panoply of motivations (social, cognitive, emotional) that drive the economic decisions we make. Think Malcolm Gladwell's Blink and Dick Thaler and Cass Sunstein's Nudge.

OPOWER, another fast-growing start-up, is an example of a company that uses behavioral science to improve electric utility energy efficiency programs. How does it work? Working closely with a utility, OPOWER mails a color, one-page report to customers. Although it's branded with the utility logo, the report deviates from the hard-to-understand bill we're accustomed to receiving. To start, less is more. They provide simple graphs that make it easy to understand how much energy you used last month, and how that compares to the months prior. Next, it's not really a bill. OPOWER doesn't show a total bill amount or ask you to send money—it's simply a supplemental information sheet about your energy usage.


Keeping Up With the Joneses