Smart Thermostats, Automation, and Time-Varying Prices
This study evaluates an experiment in which randomly encouraged households activate a smart-thermostat feature that automates responsiveness to time-of-use electricity pricing.
Can automation complement economic incentives? We explore this question by randomly encouraging households to activate a feature on their existing smart thermostat that automates responsiveness to time-of-use electricity pricing. The feature reduces air-conditioning use during the highest-priced afternoon period, raising indoor temperatures above a household’s preferred temperature, primarily for customers who are typically home during the day. Customers infrequently override the feature when they experience discomfort, suggesting that they are willing to trade off monetary savings for small increases in discomfort. Automation thus enables low-cost changes in household energy use, with potentially large electricity supply-cost reductions at scale.
Federal Reserve Board of Governors
Karen Palmer is a senior fellow at Resources for the Future and an expert on the economics of environmental, climate and public utility regulation of the electric power sector.
Casey J. Wichman
Casey Wichman is a university fellow at RFF. He performs research at the intersection of environmental and public economics, with an emphasis on examining the ways in which individuals make decisions in response to environmental policies.
Derek C. Wietelman
University of Maryland, College Park
On the Issues — Jan 19, 2024
On the Issues: New Magazine, City-Splitting Highways, and More
A biweekly newsletter connecting global current events, pressing climate and energy policy news, and economics research from RFF scholars. This week: US emissions trends, city-splitting highways, and more.
Resources Radio — Jan 2, 2024
2023 Year in Review: Energy and Environmental Policy, with Karen Palmer and Joseph Majkut
Karen Palmer and Joseph Majkut discuss the important and overlooked stories in energy and environmental policy from 2023, along with stories and issues to watch for in 2024.
Working Paper — Dec 18, 2023
Widening the Scope: The Direct and Spillover Effects of Nudging Water Efficiency in the Presence of Other Behavioral Interventions
This working paper describes the results of a social information campaign designed to nudge water conservation.