Our Thinking

New McKinsey study finds that small behavioral changes can slash home energy use by 16-20%

  • By Barry Fischer
  • November 12, 2013

The next big wave of residential energy efficiency improvements in the US may not require installing efficient lightbulbs, putting insulation into walls, tuning up your air-conditioner, or even investing in quadruple-paned windows. Instead, a large chunk of the nation’s energy savings in the coming decades may come from a decidedly less technical resource: human behavior.

A new study from McKinsey & Company finds that straightforward behavioral adjustments around the house, including savvier thermostat setpoints and more efficient hot water usage, represent an enormous untapped energy savings opportunity — on the order of 1.8-2.2 quadrillion British thermal units per year. That translates into 16-20% of current residential sector energy use. 

Today McKinsey shared the details of their new behavioral energy efficiency study as part of our webinar series.

If you’re afraid that these behavioral changes will be a pain in the neck and jeopardize your comfort…fear not. The report’s authors emphasize that the energy-saving actions they considered in their analysis are not expected to impact lifestyle.

Their estimate of national behavioral savings potential relies not on homeowners turning off the heat and putting on 3 sweaters, but rather a combination of no-nonsense solutions — like automating thermostats to go into “away mode” when people aren’t home, using occupancy sensors that shut off lights in vacant rooms, and washing clothes in cold water instead of hot (yes, your clothes will be just as clean).

The waterfall chart below, taken from the McKinsey study, summarizes the potential energy savings contributions from a range of household usage categories (both electricity and gas end-uses), and how they sum up to produce an aggregate savings potential of 16-20%.

Behavioral approaches to drive energy savings are on the up across America, as more states have begun to pursue efficiency goals and the utility sector is correspondingly increasing their investment in demand-side energy management ($6.7 billion in 2012, compared to $4 billion in 2008). Because some traditional utility efficiency programs (e.g. promoting compact fluorescent light bulbs) are beginning to max out on their potential and thus becoming less cost-effective, the importance of behavioral initiatives is greater than ever.

How can US households start tapping the massive opportunity to adopt more energy-efficient behavior? One big part of the equation, as identified by the McKinsey study, is simply engaging consumers about the opportunity. Utility companies in particular are in an ideal position to drive that engagement — by providing consumers with usage feedback, savings advice, and energy management tools in a way that is personalized, data-driven, and actionable.

The study was based on a range of ethnographic in-home interviews and supplemented with a 2,500-person national survey to quantify behavioral trends.

Stay tuned for more news and details about the full McKinsey study, “Sizing the potential of behavioral energy-efficiency initiatives in the US residential market.” To learn more about Opower’s ongoing efforts to unlock the potential of behavioral energy efficiency in the US and abroad, check out our Behavioral Energy Efficiency Potential research microsite – opower.com/beepotential.

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