Electricity usage in the US has fallen

Published: 16/06/17

Being bigger and using more than any other nation has always been the American way. But as this article by Lucas Davis of the Energy Institute at Haas School of Business points out, the year-on-year rise in electricity use that has continued since 1950 came to an abrupt halt after 2010, and the reason could be energy-efficient light bulbs.

Increasing efficiency

Of course, all sorts of electric equipment is becoming more efficient, particularly larger household items such as air conditioning units or fridges and freezers. However, Davis makes the important point that the long lifespans of these goods means they have a slow turnover, and are unlikely to account for a sudden decline between 2010 - 2012.

Correlation can mean causation

On the other hand, incandescent light bulbs are replaced regularly - at least every couple of years. Given that energy-efficient bulbs make up 80% of sales in the US, and that the size of the decline in electricity use matches the amount that that would be saved by large-scale adoption of low energy bulbs, Davis believes that correlation does, in this case, suggest causation.

"Suppose that between LEDs and CFLs there are now one billion energy-efficient lightbulbs installed in U.S. homes. If operated 3 hours per day, this implies savings of 50 million megawatt hours per year, or 0.16 megawatt hours per capita, about the size of the decrease above. Thus, a simple back-of-the-envelope bottom-up calculation yields a similar decrease to the decline visible in aggregate data."

Will it hold?

The key question is, will this dip be temporary? Davis points out that the traditional response to lower costs and increased efficiency in almost any market is for consumers to buy or use more of the product.

"An important unanswered question about LEDs is to what extent will these energy efficiency gains be offset by increased usage? Will households install more lighting now that the price per lumen has decreased? Will households leave their lights on more hours a day? Outdoor lighting, in particular, would seem particularly ripe for price-induced increases in consumption. These behavioral changes may take many years to manifest, as homeowners retrofit their outdoor areas to include additional lighting."

If this is the case, there is a role for power companies to play in educating their customers not only about the very tangible benefits of replacing traditional, incandescent bulbs with energy-efficient alternatives, but of the importance of continuing to reduce usage despite the initial reduction in their bills.

Changing behaviours

As we've discussed previously, the customer bill is the most effective and regular method of communication that power companies have with their customers. As bills also deliver information about the personal cost of electricity use to the customer, they offer an excellent opportunity to encourage people to adopt energy-efficient practices.

At Jendev, we understand the importance of using utility bills to communicate with customers. We work with our clients to ensure our utility billing solutions offer the flexibility needed to communicate effectively with their customers.

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