Driving Sustainable Behavior in the Mainstream Consumer: Leveraging Behavioral Economics to Minimize Household Energy Consumption

Abstract

This project reviews and evaluates the effectiveness of behavioral economic interventions on household energy consumption, as utilized by non-intrusive energy monitoring services such as our client company, PlotWatt. Through our assessment of the landscape of relevant academic literature and interviews with experts within the fields of behavioral economics and environmental psychology, we identify five principles of behavioral economics that are most salient for this sector: awareness, learning, social norms, goal setting, and framing. These five principles are examined through six case studies of companies within the client’s peer group: OPOWER, Earth Aid, Microsoft Hohm, Google PowerMeter, Wattvision and GreenLite Dartmouth/TELLEMOTION. In each case study, particular attention is paid to how effectively the behavioral economic intervention is implemented and best practices are highlighted. The paper concludes with tailored recommendations for PlotWatt. Our research suggests that a few behavioral economic tweaks to the user interface and reporting systems could lead to unique, measurable and significant behavior change that not only saves money for the household but also, in some case, motivates a deeper interest in conservation and curtailment of energy consumption.