Consumer Misperceptions Regarding Energy Efficiency

A recent survey published in the Proceedings of the National Academy of Sciences indicates that consumers are misinformed about how best to realize energy savings.  Marketers have the opportunity to make a significant impact on energy use by filling in knowledge gaps, correcting misperceptions and helping consumers prioritize actions that generate the greatest impact.  (Attari et. al., “Public Perceptions of Energy Consumption and Savings” August 2010)

As Attari et. al. point out, consumers can typically realize greater energy savings through structural improvements in energy efficiency (e.g., switching to fluorescent light bulbs) than from behavior changes that curtail energy use (e.g., turning off lights).  Yet, more than half of survey participants held the mistaken view that behavior changes such as turning lights off (nearly 20%) or reducing driving/biking/taking public transportation (15%) were likely the most effective way to reduce energy.  By contrast, only 12% of participants pointed to a structural change such as use of efficient light bulbs (4%) or appliances (3%).

Attari et. al., also explored consumer perceptions regarding the relative potential for energy savings through behavior changes or structural improvements in low and high energy intensive devices (e.g., heaters), appliances (e.g., cloth dryers) or activities (e.g., washing clothes at a lower temperature).  Interestingly, survey participants systematically underestimated the energy use and savings potential from energy-intensive options – with actual energy use or savings potential nearly 3x consumer estimates.  With little knowledge or reference points to make an informed decision, participants seemed to rely on heuristics like “anchoring” to make educated guesses regarding the impact of appliances and devices relative to a more familiar one, the 100 watt bulb. 

Such survey results should not come as too much of a surprise to most utility marketers, as consumers have traditionally lacked a detailed understanding of their energy bill and options for mitigating it. 

For marketers, such a knowledge gap provides a clear opportunity to engage consumers across new dimensions by:

Providing more details regarding household energy use: Consumers would take more action if they better understood the impact that each appliance, device and activity had on their aggregate bill.  While smart meter deployments make providing this level of transparency a snap, marketers may be able to improvise by providing likely usage patterns extrapolated from consumers with similar historic consumption patterns or surveys.

Leveraging more relevant heuristics: Marketers should focus on dollars rather than kilowatt hours of energy saved.  Money is more easily understood by consumers, especially when comparing products and product investments across categories.  For more significant investments, provide a personal return on investment or payback period to facilitate consumer decisions.

Benchmarking individual energy use against the community: Whenever possible, utilities should provide comparative data regarding personal energy use relative to the average in a community.  Such social marketing may provide an added level of urgency to act for consumers who use more energy than their neighbor (though marketers must take care in their messaging so as not to promote added energy usage by those already using less than the average).

Partnering to extend reach: Utilities should partner with others also interested in selling more efficient appliances and devices including retailers and OEMs, as well as those that interact with consumers at key trigger points for purchase such as real estate brokers, mortgage brokers and contractors. Such arrangements are mutually advantageous and can greatly extend reach and amplify messaging in market.