Duke Energy received regulatory approval this week to offer a novel energy-efficiency program based on a potentially vast but untapped energy resource: one’s emotional need to fit in.
Later this year, Charlotte-based Duke will begin mailing its residential customers monthly energy reports showing how their energy usage compares with “peers” who live in similar homes.
A low ranking among neighbors could be what it takes to lower the thermostat, turn off the lights or invest in getting air ducts cleaned out and sealed.
In common parlance, it’s known as peer pressure. And it apparently influences electricity-consumption habits just as it shapes taste in clothing, popular music and SUVs. More than 75 utilities in the nation now send these customized shame sheets to some 14 million customers.
“We know that customers compare bills,” said Duke spokeswoman Paige Layne. “What we find is that customers who are not as efficient as their neighbors make changes to keep up with the Joneses.”
Progress Energy introduced a similar program last year on a limited basis to 50,000 customers. Duke is more ambitious: Later this year the company plans to start mailing out energy reports to all eligible residential customers in the state, or 500,000 households. Duke has about 1.9 million total customers in North Carolina, including about 180,000 in Durham, Chapel Hill and other parts of the western Triangle.
The neighbors are not identified by name or address – they are composites of area homes that share a similar profile. But for some that’s sufficient to take action so as not to be an outlier.
The expected savings are about 2 percent a year, or about $20 annually, Layne said. That’s based on pilot projects in South Carolina and Ohio with 18,600 customers. Progress has experienced similar savings since introducing its program in July 2011.
Duke will target residential customers on a single utility meter, who have at least 12 months of usage, and are not participating in other energy-efficiency programs.
Raleigh-based Progress has about 46,000 households in its program. Some asked the company to stop sending the reports, but most dropped out because they moved away, said spokesman Jeff Brooks.
Customers don’t apply for this program – they receive automatic mailers. Their usage is compared with similar homes by size and age and location. The data are crunched by a multi-variable regression analysis and customized to each customer, according to a white paper written by developers of the energy-efficiency program at Arlington, Va.-based Opower.
The company administers more than 75 utility programs, including Progress Energy’s, said Opower spokeswoman Carly Llewellyn. Customers include Baltimore Gas & Electric, Pacific Gas & Electric, Orlando Utilities Commission, National Grid and Gulf Power.
Opower’s mailers show a house labeled “YOU” next to a house labeled “All Neighbors,” leaving no mistake as to which is the energy hog and which one has energy smarts. The mailers include energy conservation tips and information about cash incentives for buying energy-efficient appliances.
A typical mailer might say: “Last winter, you used 27% MORE energy on heating than your neighbors.”
Tapping into emotional insecurity as an energy resource draws on the work of famed marketing researcher Robert Cialdini of Arizona State University and author of the best-seller “Influence: The Psychology of Persuasion.”
His research showed that most people are not motivated by cutting utility bills or helping the environment or some other rational goal. Most are preoccupied by their peers, a psychological weakness that determines their self-esteem and steers many life decisions.