Nonprice incentives and energy conservation

Abstract

In the electricity sector, energy conservation through technological and behavioral change is estimated to have a savings potential of 123 million metric tons of carbon per year, which represents 20% of US household direct emissions in the United States. In this article, we investigate the effectiveness of nonprice information strategies to motivate conservation behavior. We introduce environment and health-based messaging as a behavioral strategy to reduce energy use in the home and promote energy conservation. In a randomized controlled trial with real-time appliance-level energy metering, we find that environment and health-based information strategies, which communicate the environmental and public health externalities of electricity production, such as pounds of pollutants, childhood asthma, and cancer, outperform monetary savings information to drive behavioral change in the home. Environment and health-based information treatments motivated 8% energy savings versus control and were particularly effective on families with children, who achieved up to 19% energy savings. Our results are based on a panel of 3.4 million hourly appliance-level kilowatt-hour observations for 118 residences over 8 mo. We discuss the relative impacts of both cost-savings information and environmental health messaging strategies with residential consumers.

Keywords: decision making; energy conservation; environmental behavior; health information disclosure; randomized controlled trials.

Fig. 1.

Effects of informational messages on study households (n = 490,994 hourly kWh observations, 118 apartments by random assignment into treatment and control groups). Mean treatment effects are reported versus control households before and after treatment following a 6-mo baseline monitoring period. The cost savings information group shows no significant conservation behavior after the 100-d treatment period. The health group shows significant conservation behavior of 8.2% energy savings (significant at **P < 0.05) after the 100-d experimental period. Health-related information treatments are particularly effective on families with children, achieving 19% energy savings relative to control (significant at **P < 0.05). All panel regression estimates include statistical controls for household characteristics (apartment size, apartment layout, and building floor), occupancy (number of persons living in the household), hourly weather controls (e.g., heating and cooling degree hours), time fixed effects, and environmentalist ideology (head of household reports being an active member of an environmental organization). Materials and methods are available in SI Appendix.

Fig. 2.

Quantile treatment effects on the treated (n = 490,994 hourly kWh observations, 118 apartments). We observe significant conservation effects in the health treatment group across all quantiles of electricity use, except for the lowest decile (most energy efficient observations). By contrast, by the end of the experiment, we observe no significant conservation effect with the monetary savings group and observe splurging behavior, particularly among the highest use quantiles. Significance levels are as follows: ***P < 0.01, **P < 0.05, *P < 0.1.

Fig. 3.

Appliance-level electricity measurements (n = 490,994 hourly kWh observations, 118 apartments). Plug load is the largest share of household electricity use. The average kWh consumption is 230.4 kWh/mo across one-, two-, and three-bedroom units ranging from 595 to 1,035 square feet. Appliance-level data for multifamily residences in this study are among the first field demonstrations of comprehensive appliance-level metering capabilities not previously available. Results above represent a weighted average of all household electricity uses obtained by direct measurement and are not based on engineering estimates by modeling.