Saving Energy With Some Simple Information

(MoneyWatch)  The cheapest form of electricity is often "negawatts" -- reducing demand rather than generating new energy. But there's a dizzying array of ideas for how to do so, from smart meters to home efficiency upgrades to informational campaigns. Some projects turn out to actually be quite expensive.

So it's nice to hear from Opower, formerly Positive Energy, which has a decidedly cheap, low-tech way of reducing energy consumption: they send people a letter.

Opower popped up last week with an announcement of 20 utility partners, including some big names like Dominion and Xcel Energy. One customer, the Sacramento Municipal Utility District, found that it was on track to achieve an average 2.8 percent reduction in electricity usage using Opower. In some areas, that could be enough to allow utilities to forgo building a new plant.

"If you look at the numbers, we're achieving reductions in consumption that others are hoping to achieve with devices that cost 30 to 40 times as much," Alex Laskey, the company's president, told me in an interview. In-home displays can be a viable solution, Laskey says, but "we're just providing more digestible information through the mail."

So what's this magical mail they're sending out? An eco-conscious version of keeping up with the Joneses, it turns out. Here's an example of a prominent panel from one of their mailers:


The information is also online, but few customers are motivated enough to change their energy usage to seek it out. "People are far less interested in real-time data than one would think," he says.

Curiously, the mailer itself works better when sent separately from a household's monthly energy bill. People are used to tossing the incomprehensible stats they get along with their bill, which doesn't help Opower's goal of being catching people in an open frame of mind, so they just send it separately (sorry, trees).

The other important information Opower sends to people, besides neighborhood comparisons, is suggestions on how to reduce power usage. It's here that extra equipment like smart meters really helps; if Opower can see, for instance, that the refrigerator is an energy hog, it can confidently tell the customer to upgrade.

However the customer goes about cutting their usage, the end result looks pretty good for the utility. Opower's estimates of how much its negawatts cost comes in at less than half the cost of coal, currently the cheapest stuff we have. The company compares itself here to other in-home power savers:


Even if customers are effectively be subsidizing the utility by paying for some of the above energy-efficient items out of their own pocket, they should still save on their power bills.

Some of Opower's potential competitors have yet to reach as wide a customer base (Opower mails to a million households), and the full picture of what's effective has yet to become totally clear. But Opower's design philosophy should be a useful standard for everyone to keep in mind for interacting with the average customer: less is more, and a little information can go a long way.