There are many situations where utilities call on customers to conserve energy, including efforts at peak load reduction, responses to fuel shortages and extreme weather. Some of the issues are persistent, while some are more situational — and for utilities, how they ask customers to turn down their energy use matters a lot.
New research from the University of Chicago concludes price-based incentives are the most effective and consistent way to tweak customers’ energy use. But because of the difficulty in developing new electricity rates, the study also highlights the usefulness of non-price incentives. Utilities are also experimenting with incentives that use a mix of the two ideas, with strong results.
