Households energy costs can be reduced with simple changes

Energy poverty, a condition affecting millions globally, occurs when households allocate at least 8% of their annual income to energy costs. Addressing this pressing issue is no small feat, but new research from MIT shows that providing better data and guidance can make a significant difference. 

A field experiment in Amsterdam demonstrated that with the right information and support, households can cut their energy use and expenses dramatically, lifting many out of energy poverty.

“Our energy coaching project as a whole showed a 75 percent success rate at alleviating energy poverty,” said Joseph Llewellyn, a researcher with MIT’s Senseable City Lab and co-author of the study.

Published in Nature Scientific Reports, the study revealed that households reduced their energy expenses by an average of 53%, a remarkable shift that highlights the potential of behavioral interventions to combat energy poverty.

The scope of energy poverty

Energy poverty affects a significant portion of the population worldwide. In the Netherlands alone, about 550,000 households (7% of the population) are affected, while across the European Union, approximately 50 million people face this issue. In the United States, nearly 30% of households struggle to pay energy bills.

With these staggering numbers in mind, the MIT team collaborated with Amsterdam city officials to devise an experiment aimed at identifying effective ways to reduce energy poverty. 

Their work not only underscores the importance of addressing energy affordability but also provides a blueprint for scaling similar interventions globally.

Simple behavioral changes and energy costs

The research team conducted two variations of an energy coaching program. The first group of 67 households received a single report detailing their energy usage alongside tailored advice for improving energy efficiency. 

The second group, comprising 50 households, received the same coaching but was also equipped with a smart device that offered real-time updates on energy consumption. Both groups also benefited from minor energy-saving upgrades, such as improved insulation.

The results were impressive: electricity consumption dropped by 33% and gas usage by 42%, on average. Total energy costs were slashed by over half, bringing the percentage of household income spent on energy down from 10.1% to 5.3%.

Llewellyn noted that simple behavioral changes, such as heating only occupied rooms and unplugging idle devices, were among the most impactful. 

“The range of energy literacy was quite wide from one home to the next,” he explained. Importantly, the approach emphasized collaboration rather than judgment.

“I never said, ‘Oh, you’re using way too much.’ It was always working on it with the households, depending on what people need for their homes.”

The role of real-time monitoring

Households equipped with smart devices that tracked energy use in real time typically used them for only three to four weeks after receiving coaching. Despite this short duration, the devices had a lasting impact on behavior.

“Our research shows that smart devices need to be accompanied by a close understanding of what drives families to change their behaviors,” said Titus Venverloo, a co-author and researcher with MIT’s Senseable City Lab.

The limited use of these devices suggests that while real-time data can catalyze change, long-term behavior shifts rely more on the initial coaching and understanding of energy-saving practices.

Structural solutions beyond behavior

While the study demonstrates the potential of behavioral interventions, it also acknowledges that structural changes are necessary to address energy poverty comprehensively. These include policies to lower energy prices, improve building efficiency, and provide financial support for retrofitting homes.

Llewellyn is currently working with Amsterdam officials on a new project to explore the benefits of retrofitting residential buildings. The challenge lies in ensuring that the costs of upgrades are not passed on to tenants through higher rents. 

“We don’t want a household to save money on their energy bills if it also means the rent increases, because then we’ve just displaced expenses from one item to another,” he explained.

Energy costs as an invisible burden

For low-income households, investing in energy-saving measures like better insulation often feels out of reach. “It’s a big upfront cost for a household that does not have 100 Euros to spend,” noted Llewellyn. 

Energy costs are frequently seen as less immediate than necessities like food and clothing, making them a lower priority for struggling families.

“Energy is always going to be this invisible thing that hides behind the walls, and it’s not easy to change that,” Llewellyn said, emphasizing the need for greater awareness and support to help families address this hidden burden.

Implications for global policy

The findings from this study have broad implications for policymakers. By combining data-driven insights with hands-on coaching, governments and organizations can empower households to reduce energy costs significantly. 

Moreover, structural initiatives like subsidized retrofitting and affordable energy pricing can amplify these efforts, creating long-term solutions for energy poverty.

As Fábio Duarte, another co-author and associate director of MIT’s Senseable City Lab, concluded, “energy poverty afflicts families all over the world. With empirical evidence on which policies work, governments could focus their efforts more effectively.”

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