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Video: Alex Laskey of Opower on the Power of Peer Pressure in Energy Conservation

2 min. read

Research has shown that "appeals to cost and conservation have no impact on people’s energy consumption." What does have an impact? Peer pressure from neighbors.

At the heart of Opower’s software is the behavioral nudge—a gentle push toward the right decision. Perhaps the most infamous such example was implemented in the Amsterdam airport, where painting flies on urinals reduced spillage by 80 percent. (If you give a man a target, he can’t help but aim.)

That’s the theory driving Opower, a company that’s helped millions of people lower their energy bills. Rather than sell or produce energy, it makes software—software that is changing the way Americans consume energy by setting them in a contest against their neighbors. In the process, Opower has discovered that when it comes to energy efficiency, conscientiousness doesn’t inspire nearly as much change as competition (and a little judgment).

...the real key is one last box: a grade assessing your energy consumption. You receive two smiley faces for great conservation (that is, using less than 80 percent of what your neighbors do), one for good (using less than most of your neighbors do), none for bad (using more than most of your neighbors). As soon as customers recived their first reports and saw the smiley face box, they began increasing their energy efficiency.

That peer pressure - we might call it the "nudge effect" - is what social scientists have found to move and influence people to reduce their energy consumption, at least at the consumer level -- more than financial motivations or anything else. And that's exactly what Alex Laskey of OPower is talking about in this February 2013 TED talk (see video above). The question: is Laskey correct? Well, if business success is any indication, he certainly seems to be. As this article points out, Opower is "one of Washington’s fastest growing companies," a company whose "rise has been meteoric," which has "gone from a rented desk in San Francisco to employing 350 people in offices internationally—in just 6 years." Clearly, Opower must be doing something right.

Could there be other methods even more powerful than peer pressure to persuade people to conserve energy? We don't know, but we'd certainly be curious to hear readers's thought on this subject. Thanks.