Utilities can change the game by becoming trusted advisors to their clients. This will have effects that include more than just better efficiency.
Behavioral energy efficiency programs combine insights from social sciences with the customer information utilities already have. They can, “improve the performance of traditional efficiency programs,” as the US Department of Energy says in its introduction to behavior-based energy efficiency.
A report profiling US Behavior Based Energy Efficiency (BBEE) programs lists several “strategies and tactics,” that these programs use to encourage behavior change:
Marketing and Communications – Use of traditional marketing channels and newer social media options (ie., Facebook, Twitter, You Tube, etc.) and devices (computers, mobile phone apps, etc.) to communicate messages and encourage dialogue that stimulates customers to be more efficient.
Tips and Assistance – Customers may not know what behavior changes make the most sense and are likely to have the biggest impact on their energy consumption. Educating customers on the most effective actions to take, and assisting them in taking those actions, can help them move forward.
Goal Setting – Once a customer or community commits to an energy reduction goal they may be more likely to change some of their energy use related behaviors.
Rewards and Recognition – Monetary rewards or prizes can be motivating in stimulating behavior change, as can recognizing customers (or communities) that have been successful. Rewards can be fixed or random, with random rewards adding an entertainment component that customers may find appealing.
To this list, some utilities have added gamification, which adds challenge, goal-setting, entertainment, and social dynamics to the list of motivating factors.
Behavioral energy efficiency programs can yield more than efficiency improvements. Each of the above generally entail interactions with customers that have additional benefits, for instance in customer engagement and customer satisfaction.
The benefits of behavioral energy efficiency programs extend well beyond the efficiency gains. Customers are not equipped, nor do most of them have time, to understand their usage data the way that utilities do. A utility that can help its customers understand how to save money and be more environmentally responsible is able to provide an additional level of service that customers value.
Behavior-based energy efficiency allows wise utilities to become “trusted advisors” as their customers continue to look for ways to reduce power consumption, said John McCue, vice chairman and leader of Deloitte's U.S. Energy & Resources practice in a 2014 Utility Dive article. That role is still available for many utilities and their customers.
According to Jamie Wimberly, CEO of DEFG EcoAlign, interviews with utility managers reported behavioral programs were:
Advanced Energy Economy adds two more important benefits in a post about BBEE noting that they:
Schedule a demo to see how Brilliency makes your utility into just this kind of trusted advisor with an effective customer engagement strategy.
On top of this, they are cost effective. A December article in EnergySmart states that, “Behavioral programs [are] some of the most cost-effective energy efficiency measures for energy consumers…, and consumers want to participate.”
But, you might object, we’re already implementing programs that give our customers the latest, smartest, and most efficient tech available. Won’t that solve the same problems? Short answer, no. Long answer, yes, but…
Even the best hardware is better with customers who know how to use it. There is no guarantee that people will use new technology in a way that increases efficiency.
The importance of user behavior is easy to see in managed residential and commercial buildings where managers track and compare actual energy use changes to those predicted by models. It is not uncommon in these scenarios to find that actual usage is twice what the models predicted. Of course models have inherent limits. They can only do so well at anticipating what occupants’ behaviors will be, but the performance gap also underscores the importance of keeping users in the loop. BBEE can make utilities effective advisors and teachers. (More on that below.)
One of the most dramatic illustrations of this fact is the programmable thermostat. The Washington Post described the difficulties associated with them, and it is an example of the behavioral complications that can frustrate the purposes and capabilities of new hardware or devices:
The Nest smart thermostat solves some of these problems, but does it in part by learning from the customers usage patterns. If the customer behaviors that smart home products learn are inefficient, they cannot save as much power. So it still pays to teach good habits.
What makes a good BBEE program?
Behavioral science is an established field, but its application to energy is relatively new. Just a few years ago, Naomi Cole, Program Manager at CLEARresult, which is North America’s largest energy efficiency consulting firm wrote, “We are testing this model within our client’s energy efficiency programs to better understand what best motivates people to act.”
Already, though, the BBEE research tends to show that it is worth having an efficiency strategy. “Researchers in the energy efficiency and energy policy fields have started to take notice of how these concepts might be used to better understand consumer behavior when it comes to energy use.”
The American Council for an Energy-Efficient Economy’s, “field guide,” to utility-run behavioral programs lists the different types of BBEE programs. This “taxonomy of behavior programs,” is informed by analysis of 238 programs from 104 energy providers. “20 major behavioral program categories,” fell into three, “families:”
The ACEEE found that the strongest programs were multimodal, meaning that they combined strategies from more than one of the 20 categories. Programs that combined strategies from at least one of each of the three families, they called, “stacked programs.” So stacked programs combined more diverse strategies than multimodal ones.
It appears that utilities should use multiple approaches and each of those approaches should be quite different from the others. Utilities should choose them strategically.
These, “stacked programs [were] not simply a fortuitous assemblage of elements; they involve[d] a deliberate design decision to incorporate social and behavioral science insights into energy efficiency programming.” The ACEEE report said.
The field guide study recommended, “holistic, stacked programs with a conscious eye toward engaging multiple facets of decision making and behavior, most importantly, emotions, reason, and social interaction.” This, they hypothesized, would, “activate multiple complementary drivers of human behavior and thereby yield deeper, more consistent results.” The ACEEE noted that, “social science theory on material culture,” and, “marketing studies of media and consumption,” backed up this recommendation.
The ACEEE made several other interesting findings: First, utility-run behavior programs appeared be cost effective. Second, larger utilities reaped larger efficiency gains — meaning that scaling up helps cost effectiveness. Third, utilities could improve their results by coordinating their programs with other utilities.
Fourth, the report also pointed out that another important measure of success was market effects, “Behavior programs contribute to long-term structural shifts in how people use energy and make decisions about energy consumption, shifts that are important beyond the simple kilowatts saved.”
As more utilities get involved, as BBEE budgets increase, and as additional research helps build better programs, the future of behavior-based energy efficiency programs is bright… (especially in the rooms customers are using, since we can assume they’ve turned off lights in all the others).
See how we Brilliency’s behavioral tools help your customers be more efficient with their energy use.
Earlier we mentioned that BBEE can help a utility to teach customers better efficiency practices and habits. By engaging and educating users, behavioral energy efficiency programs complement new equipment. Whoever brings the technology, behavioral programs can help customer make it all work.
In order to do that, utilities need to connect all the information for customers, notes Jamie Wimberly, CEO of DEFG EcoAlign: "Behavioral approaches should be considered in a strategic context, tying together pieces of the DSM portfolio, leveraging real-time information from smart grid systems and then further tying into customer service and marketing/communications efforts."
Utilities can help users reduce consumption by helping them understand the impact of their usage. Educational, behavioral customer engagement allows utilities to improve energy efficiency and at the same time improve customer satisfaction and loyalty.