Findings from academic studies in decision making suggest that a phenomenon known as choice overload often occurs when decision makers are presented with a long list of potential options for moving forward. When this happens, people often choose no options at all—effectively making a choice for maintaining the status quo. Traditionally, commercial energy audit reports have delivered energy assessments that only provide a long list of recommended options, perhaps reducing the likelihood of implementing any of the measures.
The objective of this CARD grant, awarded to Franklin Energy Services of Port Washington, Wis., was to test whether emphasizing a single best option, or a small group of best options, for saving energy would result in the achievement of more savings than not emphasizing any particular option at all, or simply providing the customers with a list of all energy saving opportunities. The field work took place from February 2012 to February 2013. Data were collected until April 30, 2013.
The study was overlaid onto the Xcel Energy On-site Energy Assessments offering for commercial customers. Customers calling Xcel Energy for an on-site assessment who were assigned to Franklin Energy by Xcel were randomized into two groups. Customers in Group 1 (the treatment group) received an assessment report with a cover letter that mentioned their single best option, or options, for saving energy. Customers in Group 2 (the control group) received an assessment report with a cover letter that did not mention any particular options for saving energy. The formal written assessment reports for both groups followed an identical format that included a full list of recommendations for saving energy at the customer facility. Customers were randomized into the two groups for a period of 12.5 months, and installed measures and the associated first-year savings were tracked through incentive applications received by Xcel Energy through the 12.5 months and for 2 months beyond. Group 1, which had received the best option recommendations, achieved a higher mean savings in electricity per customer than Group 2 (the control group). However, as the sample size ended up being too small to draw clear conclusions, the results were not statistically significant.
An ancillary finding was that there are some definite interactions between Xcel Energy efficiency and solar programs. A number of customers appear to have requested energy assessments for the sole purpose of gaining eligibility for the Solar Rewards incentives. On the other hand, several customers installed both solar measures and energy efficiency measures, implying that some cross-selling between programs may be occurring.
A recommendation of the study is for Minnesota energy utilities to consider stressing one or more of the best options for energy savings when submitting recommendations in energy assessments. While the results of this study were not statistically significant, they do provide anecdotal evidence of increased savings from this practice. Since the costs of emphasizing the best options when delivering an energy assessment report are so low, it makes sense to incorporate it into common practice despite the inconclusive results from this study. The strategy appears to be a no-regrets approach, with an upside available at little cost, and no down side.
Full details regarding the methodology and findings of this study are given in the final report, “Emphasizing the Best Options for Saving Energy” (pdf), available on the Commerce website. For more information on this CARD project, contact project manager Bruce Nelson or CARD grant program administrator Mary Sue Lobenstein.