How Do Customers Utilitize Real-Time Usage Feedback? Evidence from Singapore

Real-time household-level feedback has the potential to improve the efficiency of electricity consumption. This feedback allows a household to obtain a better understanding of the relationship between different electricity consuming actions and changes in its monthly electricity bill, which should improve the household’s ability to assess the costs and benefits of each additional electricity consuming action throughout the monthly billing cycle. This paper studies the impact of providing a household with real-time usage feedback on its monthly energy consumption. The Singapore Energy Market Authority (EMA) implemented an Intelligent Energy System Pilot in which over 1,700 households were provided with real-time meters and in-home display (IHD) units which provided information on each household’s real-time electricity consumption. To assess the impact of the real-time meters and IHDs, the monthly consumption of these households is compared to a matched group of households that were not provided with these devices for a more than 20 month time period before and after this intervention. This data is used to estimate the average treatment effect associated with a randomly selected household having each device. We find that having a IHD unit leads to a reduction in electricity consumption of about 5% relative to the control group. This saving is equivalent to about 180 KWh annually for the average household in the sample which translates into roughly 50 Singapore dollars at the relevant retail electricity price. These results strongly support more widespread use of real-time customer feedback technologies as a cost effective strategy for meeting Singapore’s residential electricity demand.