The innovative tools discussed in this section - smart meters, smart bills, and dynamic pricing- provide additional feedback on energy consumption and costs, helping owners, residents, and property managers to better understand the impacts of their behavior and identify opportunities for small adjustments that can make a big difference.

Click on the links to learn more about technological tools for influencing behavior change:

• Smart meters
• Smart bills

Smart meters

In homes that have traditional electric or gas meters, energy usage is determined each month either through an on-site reading by a meter-reader or the homeowner, who submits a report to the utility company; or through an estimate based on usage levels in previous years during the same period. In contrast, smart meters provide real-time reports on energy usage that are electronically transmitted to energy companies. From an energy- and cost-saving perspective, this approach may offer advantages for both the consumer and for the utility.

Smart meters still compose only a small share of all meters installed, but their presence has grown significantly in the past few years. With passage of the American Recovery and Reinvestment Act of 2009 that trend will continue: the bill set aside some $3.4 billion for investment in smart grid technology, including $200 million in funds for the installation of 2.6 million smart meters in homes and businesses. [1] Awareness of energy use When paired with in-home displays or linked to an interactive website, smart meters can help consumers to quickly and easily monitor their energy usage. Increased awareness will not, by itself, reduce usage or utility bills; however, consumers who can compare current consumption levels with the previous day, week, or month and track their monthly utility bill as it builds may be more likely to adjust their behavior in order to avoid high bills and conserve energy. Additionally, with data on actual energy consumption readily available, consumers with smart meters should receive more accurate utility bills, rather than estimates that may over- or under-estimate actual usage.

Solutions in Action

The affordable Central Park Apartments in Stapleton, part of a master-planned community in Denver, CO developed on the site of an old airport, include many energy-saving features. The 18-unit development, which serves households earning up to 50 percent of AMI, features roof-top solar panels and has received LEED for Homes gold certification for its superior performance. Residents pay for their own heat and hot water - each apartment has its own thermostat, furnace, and hot water tank - and each unit includes a digital monitor that displays the amount of energy being used at any time (in dollars). While not technically a meter - the display does not transmit information to the utility - the screen allows residents to monitor their usage throughout the day and make adjustments to keep bills low. [2]

Concerns about smart meters Smart meters and displays range in cost from about $200 to $500 per home, and in many cases are financed by a surcharge on consumers' monthly bills. Consumer advocates have raised concerns about the fee and its impact on low-income households, and in some communities advocates have been able to secure financial assistance for these families. [3] Failure to pair the installation of smart meters and displays with consumer education can leave customers frustrated and unaware of steps that they can take to reduce energy consumption. When dynamic pricing models have been adopted, these families may actually experience higher utility bills if they fail to adjust their behavior in response.

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Smart bills

A recent publication from Enterprise Community Partners notes that "many homeowners and rental property managers pay [electricity, gas, and water] bills without knowing if their usage is above average, normal or below average when compared to local norms." [4] Smart bills feature visual cues that enable customers to quickly and easily assess how their energy consumption levels measure up with the neighbors. For example, households that use significantly less energy than neighbors in similarly-sized homes may see a smiley face on their bill, indicating superior performance. Smart bills may also include bar charts that graphically compare one customer's energy use during the billing period with that of his or her neighbors and, in some cases, a subset of highly energy-efficient consumers. In one pilot study conducted in Sacramento, California, consumers who received a personalized billing statement cut their energy consumption by two percent more than those who received a traditional bill. [5]

Dynamic pricing
Smart meters also enable the adoption of dynamic pricing models in addition to, or instead of, the traditional average monthly rate. Under dynamic pricing plans, energy rates "peak" during periods of heavy usage and fall during off-peak times - a system similar to that used in communities that have adopted peak-hour toll rates to reduce highway congestion. Already common in the industrial and commercial sectors, variable pricing encourages customers to direct energy-intensive activities, such as running the dishwasher, to off-peak times when rates dip. Consumers who arrange their schedules accordingly benefit from lower utility bills; the shift in usage may also reduce pressure on the grid, helping to avoid blackouts and potentially to mitigate the need to build new energy-generating facilities.

Source: GreenTerraFirma.com

There are many ways to structure a price policy that rewards customers who reduce their consumption during critical periods. Some energy companies provide a menu of options and offer consumers the option of switching or retaining traditional billing.

Under an arrangement variously known as Variable Peak Pricing, Time-of-Use, and Dynamic Peak Pricing, utilities designate on a daily basis blocks of time during which "on-peak" and "off-peak" will be assessed. (Rates are typically announced one day in advance.) Consumers can alter their energy consumption patterns to avoid heavy usage during on-peak periods, when higher rates will prevail, and engage in more energy-intensive activities during off-peak times. Based on a similar premise, Real Time Pricing establishes rates for the next day on an hourly basis. Residential customers in Illinois can participate in ComEd's Residential Real-Time Pricing program, in which they charges are based on wholesale hourly market prices. Energy companies that use a Critical Peak Pricing model notify customers of peak "events" a day in advance. During these critical periods, participants are asked to reduce energy consumption as much as possible. For example, PG &E's will ask customers who enroll in its SmartRate Summer Pricing Plan to minimize their energy consumption between 2:00 p.m. and 7:00 p.m. on up to 15 "SmartDays" between May and October, when demand for electricity is expected to peak. Surcharges apply for energy use during that period, but customers enjoy discounted rate for all other hours. Peak-Time Rebates take this concept to this next level by offering rewards to customers who reduce their energy use on "event days," when energy consumption and costs spike upwards. Consumers who use less energy compared with previous years may earn a cash rebate for energy saved (below a baseline amount).

Solutions in Action

Between June and August 2009, 3,000 volunteers took part in Connecticut Light & Power's Plan-It Wise Energy pilot program. The utility randomly assigned participants to one of three dynamic pricing models. In addition, a subset of participants received "enabling technologies," including in-home display monitors, smart thermostats that automatically increase temperatures during peak periods, and basketball-size "energy orbs" that provide visual cues about price levels by changing in color from green to red as rates increase. Seventy-seven percent of the participants enrolled in the pilot program were homeowners and 23 percent of participants were renters. Evaluation of the pilot study indicated that enrollees reduced their energy use during peak hours by an average of 1.6 to 23.3 percent, depending on the rate type and enabling technology, if any, to which they were assigned. Click here to access the full pilot program report.

 

Concerns about dynamic pricing Failure to pair the installation of smart meters and displays with consumer education can leave customers frustrated and unaware of steps that they can take to reduce energy consumption. When dynamic pricing models have been adopted, these families may actually experience higher utility bills if they fail to adjust their behavior in response. Households that have small children or a family member with a medical condition may be unable to reduce utility use during peak hours. For these households, an average monthly rate plan would probably be most appropriate.

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Click on the links below to learn more about tools to promote behavior change: Technological tools for behavior change Two tools, smart meters and smart bills, provide feedback on energy consumption and costs, helping owners, residents, and property managers to better understand the impacts of their behavior Education and Training Education and training enables homeowners and residents, property owners, and managers of multifamily properties to get the most out of energy-efficient retrofits and other energy-saving features, leading to behavior change

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You are currently reading: Tools for promoting behavioral change The tools discussed in this section include technological innovations to help monitor energy-use, as well as educational and training programs to inform tenants, homeowners and building managers on reducing energy costs Other pages in this section: Influencing market values This section covers steps the public and private sectors can take to stimulate interest in energy-efficient homes and reward those who choose to undertake improvements

[1] Applicants say investments will create tens of thousands of jobs, save energy and empower consumers to cut their electric bills. White House Press Announcement.
[2] Green Takes Flight at Stapleton. April 2008. By Bendix Anderson. Affordable Housing Finance Magazine.
[3] Smart Meter, Dumb Idea? April 27, 2009. By Rebecca Smith. Wall Street Journal.
[4] Incremental Cost, Measurable Savings: Enterprise Green Communities Criteria. 2009 [PDF]. By Dana Bourland. Columbia, MD: Enterprise Communtiy Parnters, Inc.
[5] Utilities Turn Their Customers Green, With Envy. January 30, 2009. BY Leslie Kaufman. New York Times.