Opinion, Berkeley Blogs

Nest(ing): A home-energy home run for Mother Earth

By Maximilian Auffhammer

Happy Earth Day everyone! I briefly contemplated a doom and gloom post about the state of the global climate and lack of regulation. But let's focus on what does work, albeit at a much smaller scale, instead of what doesn't work.

Team Auffhammer has invested a lot of money in energy efficiency measures in our home. We have new windows ($$$$), a new roof ($$$), German shutters ($$), more efficient appliances ($$) and LED lighting ($) throughout the house. I have been monitoring our energy consumption after each of these investments and could not detect a structural break in our consumption of electricity or natural gas.

Last September I was at the Apple store and saw they sold a "smart" thermostat called the “NEST”. I checked with a genius (they wear blue shirts) and she said that people liked them and they were easy to install and looked cool. I was sold. I went home. Ripped out our old thermostat and put in the new one. Shiny, cool looking and simple. I then did not program it and let it learn our patterns. The thermostat guesses when you are away (with a minimal number of type I and type II errors). Plus, you can control the thermostat from your phone, tablet or the web. So if you leave for vacation and forget to turn it off, you can do so from the beaches of Maui.

I did not think much was going to happen. Boy was I wrong. The picture below displays our electricity consumption for the past 12 months in green and the previous 12 months in red.


The blue dashed line displays the installation date of our thermostat. This is a highly unscientific difference in difference by picture estimate. By using the previous year’s consumption as my counterfactual this picture suggests that we have consumed 1055 fewer kWhs since least September, which is an average savings of 150 kWhs per month or a 22% decrease in consumption.  Wow!

How much did my new fancy thermostat save me? We actually use(d) a fair number of kWhs which cost $0.29, due to the increasing block rate pricing structure (the more you use the higher the price of the next block of kWh consumed). After spending way too much time with my bills, I figured out that I saved almost $210 since September. If my forecast is right I will have made my money back by the end of the next billing cycle.

Now, I would be an irresponsible social scientist by simply prescribing these fancy $249 thermostats for everyone. The NEST changed our behavior. It brought energy conservation to our attention and each member of the family interacts with this shiny gadget a few times a day. We frequently question whether we really need to turn on the AC or heat. Maybe more importantly this thing is fun to use and looks cool.

Now go outside and do something nice for Mother Earth. And again tomorrow. And the next day. And the day after……..

And no, this blog post was not sponsored by Nest.

Cross-posted from Energy Economics Exchange (tag line: Research that Informs Business and Social Policy), a blog of the Energy Institute at Haas.