The Economy-Wide Impact of Feedback-Induced Behaviors that Drive Residential Electricity Savings

Research Report E12B


John A. "Skip" Laitner


Advanced utility meters (so-called “smart meters”) coupled with in-home displays or feedback devices provide the means by which residential energy consumers can become more knowledgeable about their energy consumption practices. Such devices, in effect, enable consumers to become active managers of their own energy resource use, or in this case their home electricity usage patterns. Indeed, one extensive ACEEE meta-review of 57 different feedback programs indicates a 4 to 12 percent range of residential electricity savings on average across an international sample – depending on the technologies employed, the characteristics of the program, and other relevant factors.

At the same time, however, few studies have explored the scale of investment or larger impacts that might accompany the growth and successful implementation of feedback programs. Nor have they examined the economy-wide benefits that might accrue from the systematic integration of feedback-induced energy savings over time. This report provides some initial estimates of the larger macroeconomic outcomes of feedback programs. In effect, it asks the question: what might the success of these programs imply for the larger economy as a whole?  Using a Monte Carlo modeling exercise to evaluate five different scenarios, the analysis finds feedback programs to be highly cost-effective with a net savings of $2-3 for every dollar expended.  Depending on the range of assumptions, the program expenditures and residential electricity bill savings are shown to support an average annual increase of 6,000 to 56,000 net jobs over the period 2012 through 2050.