Do Consumers Know How Much Electricity Is Used By Their Appliances?

Centre for Decision Research
Socio-Technical Centre

Vedran Lesic is a second year postgraduate researcher at Leeds University Business School. He is a recipient of one of the University of Leeds 110 Anniversary Research Scholarship and works within the Consumer Data Research Centre and the Centre for Decision Research. Vedran’s research focuses on understanding consumers’ decision-making, behaviour and perceptions of energy consumption in the residential sector. He has conducted a study with colleagues on the difference between consumers’ perceived and actual residential electricity use for specific appliances. His interdisciplinary team included Wändi Bruine de Bruin, Professor with Leadership Chair in Behavioural Decision Making, and co-director of the Centre for Decision Research (Leeds University Business School), Inês Azevedo, Associate Professor at the Department of Engineering and Public Policy and co-director of Centre for Energy Decision-Making (Carnegie Mellon University), Matthew Davis, Lecturer at Socio-Technical Centre (Leeds University Business School) and Tamar Krishnamurti, Assistant Research Professor at the Department of Engineering and Public Policy (Carnegie Mellon University). You can view a YouTube clip of Vedran presenting at GESAx Bern Talk on “Why consumers’ (mis)perceptions matter?”.

Vedran Lesic presenting at GESAx Bern Talk

There is an emerging interest in understanding consumers’ perceptions of electricity use and their potential savings since electricity use is one of the biggest sources of greenhouse gas emissions.

The Intergovernmental Panel on Climate Change (IPCC, 2014) warns that global greenhouse gas emissions from the electricity sector must be drastically reduced within the next 50 years to curb the risks of climate change. Policy makers are increasingly encouraging households to save electricity, so as to promote both a reduction of greenhouse gas emissions and improvement of the reliability of the electricity grid.

The deployment of smart meters (electronic devices that record electricity use in intervals of an hour or less and communicate that information at least daily back to the utility for monitoring and billing) and associated services (devices that will display how much energy you are using) enable consumers, as never before, to better understand their electricity consumption and potential behavioural and energy efficiency changes. However, such efforts may be ineffective if consumers are unaware of how much electricity is used by different appliances (such as their air conditioner or refrigerator).

Research suggests that once consumers have a better understanding of their electricity use, they might be more willing to invest in specific energy efficiency technologies that will in the long-term effectively reduce their overall consumption and provide savings for the household.

Consumers were recruited from Texas households with appliance-specific electricity meters installed by the Pecan Street Research Institute. The institute is a research organisation focused on advancing university research and accelerating innovation in water and energy. All the people who moved into the Pecan Street neighbourhood over the last couple of years had an opportunity to opt-in to this voluntary program where those electricity meters were installed. Actual electricity use for this study was measured over the course of three summer months (June, July and August of 2014). 

Members of the Pecan Street neighbourhood

Appliances included the volunteers’ air conditioner, refrigerator, dryer, washing machine, dishwasher and oven. Participants received our survey about electricity use in October of 2014, at the end of the three month period in which the electricity usage was measured.

Participants were randomly split into two groups: one was assigned to assess their appliance-specific electricity use for an average summer month in terms of dollars, and the other was asked to measure the use in kilowatt-hours (a unit of energy equivalent to one kilowatt of power expended for one hour of time). Each participant estimated the electricity use or cost by six appliances over the course of an average summer month with a 100-W incandescent light bulb as a reference point. They also provided open-ended responses to explain their assessments.

Participants’ assessments of their appliance-specific electricity use for an average summer month were compared with their actual appliance-specific electricity use as averaged over the course of three summer months, by transforming all observations into kilowatt-hours. All the results were converted into both dollars and kilowatt-hours so a comparison could be made (see Figure). 

Participants who assessed their use in dollars overestimated their electricity use for all appliances and were less accurate in perceiving their electricity consumption. Their open-ended responses revealed salient memories of high electricity bills due to blasting air conditioners during hot Texas summers, following the availability heuristic (ie making a judgement on an immediate memory, rather than examining all the information).

By contrast, participants who assessed their use in kilowatt-hours underestimated their electricity use for high electricity consuming appliances (such as their air conditioner) and overestimated their electricity use for lower energy consuming appliances (such as their refrigerator). Their open-ended responses suggested a more reasoned approach.

Using a combination of behavioural decision research and big data, the findings of this study suggest that consumers may not be aware of how much electricity is used by specific, individual appliances in their households.

The study shows that when consumers think about their electricity use in dollars, their assessments are especially inaccurate, due to the availability of unpleasant past experiences with high electricity bills. By having more accurate and precise measures of actual use it was possible to assess discrepancies between perceived and actual electricity use.

This is the first time in this type of perception study that electricity consumption has been measured by using electricity meters installed for each appliance. Ultimately, this study aims to have implications on design of better electricity feedback for consumers and utility companies, thus potentially reducing greenhouse gas emissions, improving the reliability of the electricity grid, and keeping costs down for consumers.

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The views expressed in this article are those of the author and may not reflect the views of Leeds University business school or the University of Leeds.