Soft incentives and energy consumption

Most research into energy-related behaviour focuses on monetary incentives such as price effects, but little is known about the effect of soft incentives. Moreover, most studies are based on non-experimental or survey data, and self-reported behaviour. This project combined survey data and experimental as well as field data on actual behaviour to analyse the effects of soft incentives on energy saving and green energy uptake.

The research goals included:

• analysing the determinants of energy consumption taking into account socio-economic characteristics, future orientation and environmental concern.
• experimentally testing the effectiveness of various measures, such as symbolic rewards and changing default options, in reducing energy consumption and promoting the use of green power in the household and business sector.

The main results of the project include the following five points:

1. Environmental attitudes and future orientation are correlated with actual energy and electricity consumption. Based on a nationwide survey and field data, the project indicates that, next to income, environmental concern is correlated with greenhouse gas emissions in the mobility, housing and food domain, as well as with electricity saving behaviour.
2. Data analysis with the Swiss Environmental Survey (SES) 2018 strongly supports the hypothesis that environmental concern matters for the acceptance of eco-friendly policies.
3. Green energy defaults have massive and persistent effects on green energy uptake in the household and business sector. Based on data provided by two electricity providers the project could reveal that after introducing renewable energy as the standard package (the default) almost all households and businesses (around 90%) consumed renewable energy. Further, the SES 2018 showed that green energy defaults are accepted as a policy tool by the majority of Swiss citizens.
4. A field experiment with symbolic rewards failed to show any significant effects on green energy uptake. However, this might be due to a “ceiling effect”. Possible effects of symbolic rewards should be explored in future research.
5. There are remarkable gender differences with regard to electricity consumption and the acceptance of green energy defaults. In a field study we found that women use about 23% less electricity than men.

Implications for research

The results on actual energy-related behaviour validate previous research based on self-reported behaviour. The large gender differences were not expected and should be considered in future research. A quantitative literature review on the effectiveness of soft incentives revealed that stylized facts are based on only a few studies, and that there is mixed evidence for most incentives such as descriptive social norms. In contrast, green energy defaults show robust and positive effects.

Implications for practice

Given the effectiveness of green energy defaults and their acceptance by citizens, green defaults can be a promising tool for decision-makers in different areas of the energy sector, not only with regard to green energy uptake. The project further indicates that environmental educational programmes – strengthening environmental concern and future orientation – are likely to have a positive impact on the acceptance of energy-related policies and, possibly, lead to more eco-friendly behaviour. With regard to reducing electricity consumption, males in single households seem to be an important target group.

Reducing Energy Consumption and Promoting Green Electricity. The Role of Soft Incentives