Carrots, Sticks and Other "Smart" Tricks in Making Energy Consumption Smarter
Capturing human behavior in engineering models is challenging, in part because humans themselves are challenging. This talk will discuss a series of pilot experiments run with utilities in Vermont, the goals of which were to understand how investments in a smarter grid—primarily advanced metering and distribution systems—could help residential customers conserve energy during peak demand periods. Quantitative and qualitative data from this experiment revealed substantial randomness in the response of consumers to time-varying electricity prices, consumers exhibited preferences over rate structures that did not align with conventional views of economic costs or rewards, and that consumers place a very different value proposition over advanced distribution system investments than utilities might. The lessons from these experiments are that people need technology to make smarter energy consumption decisions, and that the promise of monetary gains may make energy consumption decisions harder rather than easier.