Using Peer Pressure To Improve Energy Conservation

Software company Opower teams with utilities to provide customers with reports showing how well they're doing compared to their neighbors. These and other small nudges have worked to reduce costs as well as environmental impacts.

What's the Latest Development?

Software developer Opower works with utility companies to reduce customers' energy use through reports sent to each household that not only describes how they're using their energy, but how well they compare to their neighbors and the rest of the community. It also lists a grade: Two smiley faces is the equivalent of an A and means that the household is using less energy than most of its neighbors, while no smiley faces is the equivalent of an F. According to Opower vice-president Ogi Kavazovic, the grade is what really motivates customers to make changes: "[Without it], people will just regress back to the mean...We have to tell customers we approve of them."

What's the Big Idea?

Although many people recognize the value of energy conservation, very few take real steps to modify their own usage. Opower's approach involves gentle "behavioral nudges" that over time help customers to change their habits. The approach seems to be working: As of the end of last month, customers whose utility companies use Opower software have saved over $220 million on their bills. In addition, carbon dioxide emissions and kilowatt-hours of use have gone down by just over 3 billion and 2 billion respectively.

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