Disaggregate Consumption Feedback and Energy Conservation

• Departmental Seminar

Date and Location

Tuesday, January 7, 2020, 3:40 PM - 5:00 PM
ARE Library Conference Room, 4101 Social Sciences and Humanities

Abstract

The development of information technologies reduces information acquisition cost and promises to improve decision making. In the context of smart metering, we investigate the impact of providing households with appliance-level electricity consumption feedback. We derive testable implications of appliance-level feedback and employ a randomized controlled trial to estimate its causal effects on households’ electricity use. We find that the provision of appliance-level feedback results in a large conservation effect of around 5% compared to a control group without any feedback. We also find that effect sizes are significantly larger compared to providing aggregate smart-meter feedback alone and that monetary incentives do not increase the effectiveness of the intervention. Consumers hold more accurate beliefs about the energy consumption of different appliances, consistent with the mechanism in our model. Our result suggests that conservation effects from a smart-meter rollout will be much larger if feedback on specific behaviors can be provided. Building on a sufficient statistics approach, we estimate that appliance-level feedback could raise consumer surplus by about 520-600 million Euro per annum for German households.