Reducing Energy Consumption by Changing Behaviors in Targeted Segments

Behavioral science and energy consumption rates have become partners in a world where people and businesses must act consistently to reduce energy usage. Bringing change is more effective when efforts are customized to meet population segment needs.
— By Wilfred Smith

How people behave has a lot to do with the rate of energy consumption in any particular country. In the developed countries, lowering demand is often left to the government and energy producers to develop the policies and technologies that reduce consumption without requiring people to voluntarily change their behaviors. Unfortunately, there are limits to the impact of this approach, so the next step is reducing demand by finding ways to encourage people to reduce energy consumption because it benefits them and the environment.

It is increasingly apparent that reducing energy demand requires changing people's behaviors, but it takes more than legally requiring them to do so and more than incentives from energy companies. Experts call this increasing energy efficiency vs. sufficiency or behavioral approaches through interventions. Developing people who consciously address the need to lower energy usage in their homes and workplaces is not simple because people are at various stages of awareness and willingness.

There is increasing effort to find ways to persuade people and businesses to use less energy that do not rely on traditional approaches like financial incentives or subsidies.

Beyond Traditional Methods to Embracing Social Change
Financial resources at the government and energy company level are limited. They can only afford a set amount of subsidies or financial incentives based on available revenues or the need to cover operating costs and make a profit. Technologies, like smart meters, can only do so much, too. All this together means that reducing energy consumption of fossil fuels is limited via these strategies, so making additional progress depends on changing behaviors.

One of the newer approaches uses the social aspect of today's society. “Oracle Utilities Opower Home Energy Reports” is a print-friendly newsletter that provides personalized information about energy use that includes information about energy history and tips for energy efficiency behaviors, and neighbor comparisons. It is a motivational tool that works by giving people information they would not have otherwise, like the methods people use to lower energy use. The methods include managing heating and cooling, only washing full loads of clothes and dishes, turning off lights, and being more aware in general of activities that require energy.

To determine the impact of HERS, ideas42 partnered with Opower to complete a randomized field experiment involving 600,000 households. The HERS program reduced the average energy consumption by 2 percent. Personalization of information works.

One of the issues energy companies face is that people get used to energy-reduction campaigns, so they become less effective over time. People tune out advertising campaigns, or they may weatherize once or replace older appliances with energy efficient ones and do not need to do so again for many years.

Research studies have shared important information that found that energy consumers can be segmented based on their motivational level, which in turn influences potential for future behavioral change in response to various methods to change behaviors.

Segmenting Motivations
Different researchers have identified energy-consumer segments in different ways, but the principle is the same. The groups range from the idealistic or self-motivated environmentalist, who considers energy reduction as a goal because it is the right thing to do, to people who simply do not care about participating in energy reduction practices or technologies. In between these two groups are people motivated by the idea of saving money, people who are thrifty, and people who will only take easy steps that do not require much thought.

The conclusion is that a particular energy reduction effort will impact different groups differently, and a one-for-all program is not likely to be very effective. One reason the HERS program is so successful is due to the fact it is personalized and plays to people's need to be part of a social group – in this case the group of "energy savers."

In the UK, an interesting project concerned discovering the best way to convince consumers to change energy suppliers so they could save money. Informative letters comparing different energy suppliers were sent by Ofgem, the Great Britain government regulator for gas and electricity markets, to some consumers. Other households received supplier-branded letters. The supplier-branded letters were much more effective at convincing people to switch energy suppliers, and the people relying on the letters for decision-making saved more money than consumers who switched without the information in a letter.

Energy companies and suppliers offering communication products can take advantage of this kind of information to benefit their businesses and consumers while lowering energy consumption.

Social Works in the Workplace, Too
In the workplace, researchers found that interventions that create physical and social opportunities to save energy are most successful. The successful interventions are giving direct support and more control to employees (enablement), retrofitted and automated technologies that create context for energy saving behaviors (environmental restructuring), and social influence (modelling). In the workplace, group dynamics play a large role in influencing behaviors.

Engaging employees in an energy saving program is one strategy for combining socialization and goals for energy reductions. Social influencers can have a major impact on people's behavior. The social aspect includes an emotional appeal, but the message still needs to specifically appeal to the segments.

The bottom line is that changing behaviors among consumers at home and employees at work is not something that is accomplished with broad strategies designed to appeal to a single audience. Though this was effective in the past for changing behaviors, the modern consumer is much more savvy thanks to technology and access to information. Messaging and strategies require a higher level of sophistication.

A better strategy is to select population segments to target and address topics with broad appeal within the segment.