Saturday, July 03, 2010

Your utility thinks you are lazy and stupid

Someone was wrong on the internet.  That’s certainly not news nor something I want to try to battle every day. But in this case, the problem I discovered appears to be spreading and it is affecting important decisions in the real world.

The energy industry is selecting which technologies to implement based on the belief that consumers are “stupid and lazy”.  I’ve tracked down the source of this problem.
A little over a year ago, I went to a community meeting to discuss what Oregon could do to attract federal economic stimulus dollars.  The theme was to find ways to leverage Oregon’s “green” reputation.  We hoped to identify projects that could use stimulus money to show the rest of the country the viability of new ideas and technologies in areas such as health, renewable energy and energy conservation.

I went to a breakout session on energy.  We were supposed to brainstorm some ideas on energy generation and conservation.  The group included educators, technologists, inventors, and some people from the energy industry.

Any idea (including all of mine) that involved consumers was immediately shot down by the industry insiders.  They told us none of our ideas would work because consumers are “stupid and lazy” and “they can’t even figure out how to program a setback thermometer”.  They insisted that the only things that would work were those that could be done without depending on the consumer to do anything.  I passed it off as the usual crap spewed by people that are trying to get money for themselves, and don’t want anyone to actually brainstorm new solutions that might take dollars away from their pet projects.

A week later, at a different meeting with a different set of people, I heard similar words from some people involved with the smart grid.  “Consumers are too stupid and lazy to even program a setback thermometer.”  I was beginning to see a trend.  I asked them where they came up with that assertion.  “Oh, there’s a study out that proves it.”  I gave them my card and asked them to please send me a copy or link.  I never heard back from them.

Over the course of the next few weeks, I ran into this attitude every time I was in a meeting with anyone in the energy industry.  Apparently, it is a meme that has developed within the energy industry.  I can tell you that it is actively stifling any innovation that involves consumers.  The utilities are using it to justify decisions like not providing consumers with real-time data on energy use from the smart meters that are being installed.  Their attitude is that smart meters are only for instrumenting of the smart grid for the utilities use, not for the stupid lazy consumers.  Believe me, “stupid lazy consumers” is almost a chant with these guys.  I wouldn’t be surprised to hear they use a three letter acronym for this in the office.

Eventually, I found what I believe to be the source of this attitude.  I found a article titled “The Smart Grid Vs. Grandma”.

The meme apparently originated from statements being made by Richard Thaler, a behavioral psychology economist at the University of Chicago's Booth School of Business and co-author of Nudge, a how-to book on influencing decision-making.

Quotes from the article include: "Thaler points to Americans' adoption and use of programmable thermostats as an example of laziness trumping logic."  and "People tend to be passive," Thaler says. "For smart meters to work, they'd have to be pre-programmed."

He bases his assertions in the article on “a 2005 survey by the Energy Information Administration”.  I tracked down the actual survey: the Energy Information Administration’s “2005 Residential Energy Consumption Survey, home energy uses and costs”.

Given the actual numbers in that survey, his analysis and conclusions are pretty bizarre.

Thaler states that "only a third of Americans own the devices and less than a fifth use them to change their homes' temperature during the day, even though half of Americans leave their houses empty from morning until evening". This is a very misleading interpretation of the data in the report.

While it is numerically accurate, 18.6/111.1 is the number of homes that use a programmable thermostat to lower temperature during the day, he is misinterpreted this to imply that 80% of consumers are too stupid or lazy to even program a thermostat to save energy.

His statement ignores a few facts mentioned in the report: many homes are not empty during the day; some homes are in climates where heat isn’t typically needed; some homes have heating systems (example wood burning stoves) that are not regulated by a thermostat; some of the homes in that 111.1 million don’t even have a heating system.

Here are a few of the numbers from the report (in millions):

    * Total US housing units: 111.1
    * Use space heating equipment: 109.1
    * Have a thermostat: 95.8
    * someone home all day: 56.4
    * Lower temperature setting when no one is home: 40.5
    * Have a programmable thermostat: 33.1
    * Use programmable thermostat to reduce temp during the day: 18.6
    * Use programmable thermostat to reduce temp at night: 21.5

The study points out that only half (111.1-56.4/95.8) of all homes are empty during the day, and would thus even be interested in reducing heating during the day.  Yet 56% (18.6/33.1) of people with programmable thermostats do indeed program them to lower temperatures during the day.  The correct conclusion is that homes which are empty during the day have a higher probability of having a programmable thermostat, and it is indeed programmed.

This statement also bothered me: "If it involves people actually doing something, it won't happen," Thaler says. "Just look at everyone who never figured out how to program a VCR."

The VCR is a poor analogy, based off a bad joke from the 70's.  In reality, VCR user interfaces in that era (in case you are too young to have seen them) were very poorly designed, and quite frankly often had poorly translated instructions.  The failure was with product development and user interface design, not with the consumers.  So yeah, if the energy industry does a terrible enough job, people won’t be able to use the technology.

21 million (40.5-18.6) homes are manually lowering the temperature settings and may benefit from installing programmable thermostats.  People are obviously motivated enough to lower temperatures manually.

My conclusion: Consumers are smart enough to program their thermostats when it is needed.  Consumers are motivated enough to manually control their thermostats.  Isn’t this the opposite of Thaler’s position?  Consumers are neither stupid, nor lazy.

There are also quotes in the same Forbes article from Marti Doneghy, supposedly a spokesperson for the Association for the Advancement of Retired People.   Simply put, this lady should be fired.

"We vigorously oppose the mandatory imposition of these smart meters in peoples' homes," Doneghy says. "Everybody has to pay for this change, and a lot of the 50-plus population simply isn't that interested."

Even the simplest online interface for controlling those smart meters, Doneghy points out, is beyond the grasp of plenty of Americans. "Internet access is not a fact of life for every person in the country," she says.

I’m not going to even bother to look for statistics to refute her first statement.  The 50-plus population is most certainly interested in anything that can save them money. 

Doneghy has no idea what "the simplest online interface" might be.  No one is proposing consumers "control those smart meters".  "Plenty of Americans"  can read a thermometer or gas gauge, and they can understand a display of their real-time energy usage.

As the last statement, the reality is that broadband access is at 74% and internet access is at 85% according to U.S. Census Bureau numbers for 2008. Not quite everyone has the internet, but it’s obvious that enough use it to make it useful. 

This “spokesperson” obviously believes people over 50 are "stupid and lazy", and people in the energy industry that I talked to agree with her.

This meme that "consumers are stupid and lazy" is helping the energy industry to make poor, self-serving decisions.   Maybe not everyone in the energy industry has bought into this thinking, but certainly those I talked to back in May and June of 2009.

I checked out Thaler’s book, Nudge.  It is full of interesting theories on how to manipulate consumer decision making.  He backs up his theories with data from various studies and surveys.  After looking into his interpretation of data in the residential energy consumption survey, I have to be skeptical about everything said in that book.

Unfortunately, I don’t have time to track down everywhere someone is wrong on the internet.  I am too busy with ideas about monitoring and reducing home energy use that I need to work on instead.

1 comment:

ThaNerd said...

This post is really interesting. I came upon your blog after i was actually trying to learn "stuff about electronics". I live in Europe, and i must agree some people are not actually too stupid for something, but the lazyness can be an argument. I know people who invest quite a bunch of money to reduce their energy consumtion, but i know some other people who just think "why would i bother doing all this for sparing a few bucks per year?"...