How can I convince you to conserve energy? I could remind you that using less power saves money and helps the environment, but you won’t listen. Studies have proven that appeals to cost and conservation have no impact on people’s energy consumption.
But what if I told you everyone in your neighborhood is reducing their energy consumption—except you? Would competition and a little fear of judgment convince you to switch off your air conditioner?
That’s the theory driving Opower, a company that’s helped millions of people lower their energy bills. Rather than sell or produce energy, it makes software—software that is changing the way Americans consume energy by setting them in a contest against their neighbors. In the process, Opower has discovered that when it comes to energy efficiency, conscientiousness doesn’t inspire nearly as much change as competition (and a little judgment).
At the heart of Opower’s software is the behavioral nudge—a gentle push toward the right decision. Perhaps the most infamous such example was implemented in the Amsterdam airport, where painting flies on urinals reduced spillage by 80 percent. (If you give a man a target, he can’t help but aim.) In the same vein, Google’s cafeteria is brimming with nudges toward a healthy diet: Healthy foods are coded in green, guilty pleasures in red; plate sizes are smaller-than-average; and the most indulgent desserts are banished to a far corner of the room. Similarly inspired fitness apps encourage you to out-exercise your friends. But using behavioral psychology to encourage energy efficiency has been more difficult, in part because while almost everyone wants to save energy (for both environmental and financial reasons), the resolve to do so wavers once the thermostat climbs. Turning intent into action requires a special kind of push.
Robert B. Cialdini, a well-regarded researcher and author of Influence: The Psychology of Persuasion, began thinking about that in 2001. When a summer heat wave in California led to blackouts, he decided to investigate why the state seemed unable to prevent the grid-frying overuse. The big problem: While 90 percent of Californians ranked energy conservation as “very” or “extremely” important, and 98 percent claimed to “try to conserve energy,” virtually no one was taking the necessary steps in their own homes.
To learn why, Cialdini and his team placed door hangers on thousands of homes near San Diego. Three of these hangers provided standard rationales for energy efficiency: saving money, protecting the environment, and helping future generations. A fourth merely listed strategies for saving energy. These hangers each had only a negligible effect on energy consumption.
But another hanger tried a different tack, reporting that a certain percentage of the neighbors were using fans instead of A/C. It was, in essence, altruistic peer pressure—and it worked. The houses that received that hanger showed a 6 percent average drop in consumption, massive in the world of energy efficiency (and more than three times as much as the other homes targeted for messaging).
That study buttresses Opower’s strategy. Since its founding in 2007, the company has been teaming with energy producers to monitor customers’ energy consumption. Opower processes information from companies, then produces detailed energy consumption reports sent to each household, like when they use the most energy and what appliances are most wasteful. The reports are mailed to homes on paper—a seemingly counterintuitive medium for a company whose mission is cutting waste. Yet Opower has discovered that virtually no one will go out of their way to read an online energy report or take the time to parse its often-dense details. That’s because energy use is considered “low interest” information: Unless your electricity is out, you probably don’t care about it that much. Similarly, Opower requires customers to opt out of these reports rather than opt in. According to Ogi Kavazovic, vice president of product and strategy, an opt-in system will result in 1 percent of customers opting in, while an opt-out system results in 1 percent of customers opting out.
In addition to giving you feedback on your energy use, the report includes a bar graph that compares your own energy consumption with your community’s average and that of your community’s most energy efficient households—all of which can be helpful. But the real key is one last box: a grade assessing your energy consumption. You receive two smiley faces for great conservation (that is, using less than 80 percent of what your neighbors do), one for good (using less than most of your neighbors do), none for bad (using more than most of your neighbors). As soon as customers recived their first reports and saw the smiley face box, they began increasing their energy efficiency.
Without that box, “people will just regress back to the mean” once they’ve beat their neighbors, says Kavazovic. “We have to tell customers we approve of them.” It’s a strategy called “injunctive messaging,” and it’s the core of the company’s own behavioral nudge Opower also used to include a frowny face for wasteful consumers, but they received too many complaints. “People would call us and yell, ‘Who do you think you are?’ ” says Kavazovic. “Now your punishment is no smiley face.” And that appears to be punishment enough. The habit acquired through nudges, moreover, can last a lifetime: According to W. David Stahlman, a professor of learning and behavior at UCLA, though “trying to change behavior is difficult, trying to maintain already-learned behavior is pretty easy.” Once “people train themselves to behave in a certain manner”—saving energy, avoiding desserts—“their behavior has become habitual.” That means that even if Opower’s customers lose interest in competition, they’ll likely retain the energy efficiency habits they acquired when striving for the prized smiley.
Regardless of the psychology behind them, Opower’s strategies have been incontrovertibly successful: By the end of February, the company has already helped customers save a total of more than $220,135,000 on energy bills, 3,170,710,000 pounds of CO2 emissions, and 2,066,950,000 kilowatt hours. A family of four saves about 2.5 percent more energy on average once their utility company teams with Opower, a figure that stays fairly steady across income levels. Without appealing to money or the environment, Opower is helping to save both.
So, how can I convince you to save energy? By telling you I’m already saving more than you are.