Promoting energy efficiency

The problem:

The enormous potential for increased energy efficiency is outlined in a new report from the National Academies chaired by Center investigator, Lave. This report distinguishes bottom-up from systems approaches to energy saving. The former examines saving from more efficient lighting, plug-in hybrids, etc. System-level analysis suggests that much more can be saved through an integrated design for energy service delivery. While there is now more funding for technological breakthroughs, our proposed research will focus on the causes of the low adoption rates of existing efficiency measures and energy conserving behaviors. Prices and standards are only part of the story. U.S. households, facing 3x differences in electricity prices, have the same basic consumption patterns. Standards have led to dramatic gains in efficiency for refrigerators but not cars – where > 30% gains in efficiency have been sacrificed for market appeal (a modern exemplar of “takeback” or the Jevons Paradox. We argue that energy efficiency/conservation depends on stakeholder decision-processes with limited capacity to notice and react to energy and appliance prices, new information, and social cues, all in the face of existing habits.

The research:

We will use a decision-process approach to energy efficiency investments building on a successful synthesis of: economics, psychology, sociology and technology diffusion developed by Wilson in a Ph.D. supported by CDMC. We will work at three scales:

  1. developing decision-aids assessing new technologies from perspectives beyond direct energy use;
  2. partnering with electric utilities to analyze and refine different methods for bringing about and measuring energy conserving behavior change; and
  3. developing choice architectures that address decision-process limitations that often lead to diminished benefits of interventions through free-riders and the rebound effect.

Using engineering-economics to estimate the potential for energy efficiency, Inês Azevedo will extend the CDMC-supported Regional Residential Energy Efficiency Model (RRHEEM) to build a model appropriate for decision makers that shows the environmental quality implications of device adoption. Using expert elicitation models, Azevedo will extend the model using the judgments of experts as to the effectiveness of proposed policies. Using engineering-economics, Hadi Dowlatabadi and Morgan will explore system-wide effects of shifting key energy services to more appropriate primary and secondary energy forms.

Lave, Fischhoff, Dowlatabadi and colleagues will examine data from a number of real-time pricing/metering experiments to isolate determinants of conserving behavior change and recidivism. For example, we will be working with BCHydro who completed a two-year 2000 household experiment with various peak-pricing and real-time metering at different homes in 2008. Using household level information on appliance purchases and their hourly consumption data for 2007-2009, we will be able to distinguish behavioral change from energy efficiency investment effects and assess changes in the stickiness of energy conserving behavior. Sustained behavioral change is highly uncertain, and a key determinant of the portfolio of energy efficiency measures that can be supported as part of resource planning by energy providers.

In partnership with the BC Housing Association, and student housing at CMU and UBC, Dowlatabadi and colleagues will explore alternative supplier strategies and choice architectures in appliance purchases for rental housing (targeting student and low-income households). Using expert interviews and economic analysis we will identify a small selection of best performing appliances, then create a non-profit buyer’s co-op which can provide these units at cost to landlords, students and low-income families. The landlords will be sampled carefully to allow exploration of key factors that can remove agency effects in appliance purchases including: knowledge, scale, social network and economics. We will use the findings to propose how best to influence the adoption of high efficiency appliances.

The decision makers:
A123, AEP, BPA, CAT, EPRI, EPA/ENERGY STAR, IRGC, Metro Vancouver, NRDC, Ontario MoE, PA PUC, PJM, SustPgh, Toyota, Westinghouse.