How much electricity do you think you use in a year? If you had to guess, what would you say? Hold that number in your mind for a second. Now, if I told you the average Irish household uses 4,200 KWh a year, and asked you the same question, how much would you guess you use? Would you say you use more or less than the average Irish household?
How people think about their electricity consumption
Understanding how people think about their energy consumption can help us understand what might be effective for encouraging people to engage in more energy efficient behaviours.
A large amount of research exists examining how people think about their energy usage. Previous efforts (Lesic et al., 2018) have attempted to measure people’s energy literacy to assess what people do and don’t understand about energy. Some of this research has highlighted that there is a large gap between what people think they know about energy and their actual knowledge levels.
How can people be motivated to reduce their energy use
Other studies have focused on understanding whether people are more motivated to engage in green behaviours depending on how communications are framed to them. For example, past research (Asensio and Delmas, 2016) has compared a financially framed message (you could save €x by reducing your use) and a health framed message (you could reduce air pollution and associated diseases by reducing your use) to try to determine what works for motivating people to save energy.
Testing people’s perception of their energy use
However, we thought it would be interesting to explore how people think about the amount of electricity they use, how they believe their energy use compares to that of others, and whether their perceptions of their own energy use are influenced by behavioural biases such as anchoring.
To answer these questions, we conducted a survey experiment by randomly assigning 50% of survey respondents to version A of the survey and 50% of respondents to version B of the survey. Versions A and B of the survey were identical in every sense apart from one key piece of information in question 1.
In version A of the survey, respondents were told “the average Irish household uses 4,200 Kw/h of electricity a year.” They were then asked, “how many KWh's of electricity do you think your household uses each year?”
In version B of the survey respondents were told “the average Irish household uses 7,000 Kw/h of electricity a year.” They were then asked, “How many Kw/h's of electricity do you think your household uses each year?”
This means that the only difference between the two groups was whether they were informed that the average Irish household uses 4,200 KWh a year or 7,000 KWh a year of electricity. It is important to point out that the correct figure for electricity consumption of an average Irish household usage is 4,200 KWh and that respondents were informed of this on the last screen of the survey.
We suspected that respondents to the survey would be influenced by the amount they were shown and that while they would anchor to this figure, that they would estimate that their own usage was lower than the “reported average” in each case.
The results, as shown in figure 1 above, are consistent with our expectations. People reported consuming more electricity each year (an average of 5,765 KWh) when exposed to the high anchor of 7,000 KWh compared to those who were shown the lower anchor of 4,200 KWh who reported an average use of 3,889 KWH. This suggests that people are unaware of their annual electricity consumption, and that they have no real reference point to understand how much energy they are using. Their answers are largely influenced by the anchor they are exposed to.
More interestingly, when we conducted further analysis, we discovered that self-reported characteristics like gender, age, income, employment status, house type, or fuel type were not predictive of people’s average reported electricity consumption. While a lot of these characteristics have been shown to contribute to actual electricity consumption, they do not seem to be important when people are thinking about how much electricity they are using. Put more simply, the data seems to suggest that people do not think about the type of house they live in or the fuel source they use, for example, when trying to estimate how much electricity they use. The only self-reported characteristics that were significantly predictive of people’s reported electricity consumption were the number of adults and the number of children in the home.
Another interesting finding from our experiment was that regardless of whether people were shown the higher or the lower anchor, people were more likely to report that they used less energy than the average consumption figure they had been exposed to. While this may be evidence of optimism bias, we would caution this interpretation given that we do not have access to respondents’ actual electricity consumption.
It Is also worth noting that because the respondents were homeowners who had benefitted from SEAI’s home energy grants, they may have been more likely than the general population to think that they used less energy than the average home. This may have occurred because they may have reasonably believed that by upgrading their home they should now be using less energy than the “average” home. While this could be interpreted positively as reflecting people’s confidence in the effectiveness of SEAI’s supported upgrades, it is important to note that this positive belief may impact how people think about participating in future energy conservation efforts.
Future energy awareness communications
Our findings suggest that when communicating with homeowners to encourage energy efficiency in the home, it is important to consider that most people are unaware of how much energy they use and are likely to believe that they are using less than the average homeowner.
Finally, we believe that this data provides further suggestive evidence that Irish consumers could potentially benefit from more detailed feedback from their energy provider. Such feedback could be in a similar format to Opower style Home Energy Reports (See Figure 2, below). More detailed feedback may help people learn about how much energy they are using and help them compare their energy use with that of people like them, motivating them to save energy.
Previous evidence suggests that sending physical home energy reports to homes can reduce home energy use by between 0.8% and 3% and may encourage people to make other larger home energy upgrade investments. Of course, we would recommend that an appropriately powered randomised control trial should be carried out before widespread introduction of feedback devices like Home Energy Reports in Ireland. As Ireland differs significantly in terms of climate, average KWh used, and appliances used, to countries where Home Energy Reports have been previously evaluated, conducting a randomised control trial to estimate savings from Home Energy Reports in Ireland would be particularly important.
Karl Purcell is the Programme Manager of the Behavioural Economics Unit in the Sustainable Energy Authority of Ireland (SEAI). Using behavioural insights, the Behavioural Economics Unit at SEAI aims to deliver programmes that are carefully tailored to make it easy and attractive for citizens and businesses to avail of the advantages of clean energy – both in terms of energy efficiency and renewable energy. This will have a range of benefits for people in Ireland, including lower energy bills, warmer homes, improved energy security, and reductions in our greenhouse gas emissions