DP14954 Disaggregate Consumption Feedback and Energy Conservation

Author(s): Mark Andor, Andreas Gerster, Lorenz Goette
Publication Date: June 2020
Keyword(s): consumption feedback, Disaggregation, energy conser- vation, randomized controlled trial
JEL(s): D12, D83, L94, Q41
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=14954

Novel information technologies hold the promise to improve decision making. In the context of smart metering, we investigate the impact of providing households with appliance-level electricity feedback. In a randomized controlled trial, we find that the provision of appliance-level feedback creates a conservation effect of an additional 5% relative to a group receiving standard (aggregate) feedback. These conservation effects are largely driven by reductions in electricity use of 10% to 15% during peak hours. Consumers with appliance-level feedback hold more accurate beliefs about the energy consumption of different appliances, consistent with the mechanism in our accompanying model. Our result suggests that conservation effects from a smart-meter rollout will be much larger if appliance-level feedback can be provided. Based on a sufficient statistics approach, we estimate that appliance-level feedback could raise consumer surplus by about 570 to 600 million Euro per annum for German households.