Nudging down household electricity usage during peak hours with small monetary rewards

Miyoung Lee and Daehwan Kim

Energy & Environment, 2022, vol. 33, issue 5, 853-869

Abstract: Two recent studies highlight the potential of a demand response (DR) program as a tool to manage peak-hour electricity consumption by households. Households in these studies respond to the offer of financial rewards or an appeal to the sense of civic duty and significantly reduce electricity consumption during declared peak hours. Due to the small number of peak events included in these studies, however, a question remains whether households will continue to respond to repeated calls to action over a long span of time. We analyze a demand response program of Gangwon Province, South Korea, called “Electricity Piggy Bank†where the incentive offered was in the form of small monetary reward together with an appeal to social consciousness. The program tracked the electricity usage of about 2,000 households over one-year period during which peak events were declared once a week. We find significant reduction in electricity usage during declared peak hours and, more importantly, no decay of effects over time. The magnitude of electricity savings during peak hours is no less than the one reported for the previous financial-incentive-based DR, suggesting that offering small monetary rewards together with pro-social stimuli can be a viable alternative to a financial-reward-oriented scheme.

Keywords: Demand response; household electricity usage; peak hour; monetary rewards; nudge (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0958305X211025689 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:engenv:v:33:y:2022:i:5:p:853-869

DOI: 10.1177/0958305X211025689

Access Statistics for this article

More articles in Energy & Environment
Bibliographic data for series maintained by SAGE Publications ().