Research has shown that “appeals to cost and conservation have no impact on people’s energy consumption.” What does have an impact? Peer pressure from neighbors.

At the heart of Opower’s software is the behavioral nudge—a gentle push toward the right decision. Perhaps the most infamous such example was implemented in the Amsterdam airport, where painting flies on urinals reduced spillage by 80 percent. (If you give a man a target, he can’t help but aim.)

That’s the theory driving Opower, a company that’s helped millions of people lower their energy bills. Rather than sell or produce energy, it makes software—software that is changing the way Americans consume energy by setting them in a contest against their neighbors. In the process, Opower has discovered that when it comes to energy efficiency, conscientiousness doesn’t inspire nearly as much change as competition (and a little judgment).

…the real key is one last box: a grade assessing your energy consumption. You receive two smiley faces for great conservation (that is, using less than 80 percent of what your neighbors do), one for good (using less than most of your neighbors do), none for bad (using more than most of your neighbors). As soon as customers recived their first reports and saw the smiley face box, they began increasing their energy efficiency.

That peer pressure – we might call it the “nudge effect” – is what social scientists have found to move and influence people to reduce their energy consumption, at least at the consumer level — more than financial motivations or anything else. And that’s exactly what Alex Laskey of OPower is talking about in this February 2013 TED talk (see video above). The question: is Laskey correct? Well, if business success is any indication, he certainly seems to be. As this article points out, Opower is “one of Washington’s fastest growing companies,” a company whose “rise has been meteoric,” which has “gone from a rented desk in San Francisco to employing 350 people in offices internationally—in just 6 years.” Clearly, Opower must be doing something right.

Could there be other methods even more powerful than peer pressure to persuade people to conserve energy? We don’t know, but we’d certainly be curious to hear readers’s thought on this subject. Thanks.

We recently hosted nationally recognized energy finance expert Richard Caperton for our ongoing Scaling Green’s Communicating Energy lecture series. We’ve posted the curtain raiser on this series of posts about Caperton’s remarks on Master Limited Partnerships (MLPs), and their advantages and disadvantages relative to wind energy’s Production Tax Credit and solar’s Investment Tax Credit.

As Caperton points out, clean energy’s most valuable incentives have been neither permanent nor reliable, unlike  the perennial welfare check dirty energy sectors get from the taxpayers each year.

Fossil fuel-rented cleantech deniers in Congress decry how the Obama Administration has been “picking winners and losers.” But when you come down from Fox News Mountain and live in the real world,  the U.S. energy playing field is tilted grossly towards fossil fuels and against clean energy. Look no further than MLPs, the advantageous tax structure enjoyed now only by the highly profitable oil and gas industry. Caperton is helping drive an effort to get MLPs open to clean energy. You know, to stop “picking winners and losers.”

But, we asked him, do we even know all the ways that U.S. taxpayers support dirty energy with their politician-diverted tax dollars? In short, “no”:

There are the things that are easy to track – the tax benefits – and even those are a little bit hard...MLP treatment for fossil fuels costs us $1.5 billion a year. The advantages of things like liability caps on nuclear plants from the Price-Anderson is extremely hard to quantify and we don’t have any idea what that costs us or what the value is to people who benefit…So it’s not a small number, that’s a lot of money we’re giving away to these people, and only giving it to them. And there’s no inherent reason that it should only be for fossil fuels. It just makes perfect sense to make it work for all the energy sectors.

Highlighting the unfairness, Caperton points out: “The oil companies have a liability cap on how much they owe when they have a spill or some sort of disaster. They can only be forced to pay up to $75 million for the damages.”  I asked the obvious question, “And who pays for the rest of the cleanup?” The answer: “The taxpayers.” It’s infuriating. But wait – as Caperton explains, it gets worse.

So let’s be clear. The biggest thing that we have that gives an unfair advantage to fossil fuels is not pricing their emissions. They get to spew pollution into the air that hurts all of us, and they don’t pay anything for it. We pay for it, through our hospital bills.  But they don’t pay for it. If we don’t do anything for that, we’re never having a level playing field.  Now, if we do price the carbon, then we should think about all the other tax incentives...fossil fuels still get billions and billions of dollars in tax advantages every single year, and they’d also need to be gotten rid of.

Putting aside pollution and other “externalities” for a moment, has anyone conducted a comprehensive inventory of all the monetizable support we provide to fossil fuel industry? Here’s Caperton:

Yes and no. Some people have done a very, very good job with it, but not in the last few years. There’s a venture capital firm out of the Bay Area [which] did a report called “What Would Jefferson Do” that looked at historic spending in the fossil fuel sector and the nuclear sector and renewables sector, splitting out ethanol from renewable power like wind and solar. They found that fossil fuels had gotten…$80 of support for every $1 that renewables had gotten.

It should go without saying that an 80:1 advantage for fossil fuels – or even a 2:1 advantage, for that matter – is not a level playing field. And, it’s not what taxpayers want their money spent on, either. Yet the coddled, at-the-federal-taxpayer-trough fossil fuel industry still pushes the nonsense that it’s clean energy that can only survive with subsidies.   And they make this claim even as the unsubsidized, levelized cost of energy indicates that energy efficiency, wind and solar are already competitive with fossil fuels.  From a tactical standpoint, you have to give the fossil fuel lobby credit for driving message discipline to a serious advantage: not one dirty energy subsidy has been cut or removed to date. Not one.