Case Study

Smart thermostats are the future—but how do you measure how customers interact with them?

Categories

  • Energy Efficiency
  • Market Research

KEY TAKEAWAYS

1. Investigated how customers use and interact with smart thermostats

2. Offered insight into the interaction between smart thermostat use and TOU rates

3. Provided recommendations for how to message TOU rate plans

About the Client

The client is one of the largest combined natural gas and electric energy companies in the United States. With over 20,000 employees, the company delivers some of the nation’s cleanest energy to millions of people.

The Situation

Electric heating and cooling are substantial sources of electricity consumption in homes, and efficient thermostats are one way to help manage that consumption. For a time, many utilities offered programs that encouraged the transition from old, manual thermostats to programmable ones in an attempt to make homes and businesses more energy efficient. Today, it is smart thermostats that are providing new energy savings potential. Utilities are now working to understand how their customers truly interact with smart thermostats, and how these thermostats might ultimately help customers respond to time-of-use (TOU) rates. This was of particular importance to our client, who will soon be defaulting eligible residential customers to a TOU rate plan, as mandated by their public utilities commission.

While a substantial body of research has focused on quantitatively assessing the energy savings that might arise through more widespread implementation of smart thermostats, our client was particularly interested in the qualitative aspects of understanding how their customers actually use and interact with smart thermostats.

To learn more, they engaged EMI Consulting for two ethnographic studies, one in the winter of 2016 and another in the summer of 2017. This case study focuses on the second (summer) study.

Our Approach

The client-specific research objectives for the summer study included capturing attitudes, interaction preferences, and use of smart thermostats, as well as how each of these were related to customer acceptance and response to TOU rates.

We characterized 67 customers’ experiences over the summer season (June through September) via online surveys, a diary study that included in-depth phone interviews and weekly online journal entries, and in-home visits that included an interview and a projective exercise to assess attitudes toward smart thermostats and TOU rates. The study included the following customer groups:

  • Customers with a smart thermostat that recently joined a TOU rate plan
  • Customers that recently joined a TOU rate plan who received a new smart thermostat as part of their participation in the study
  • Customers with a smart thermostat currently on a standard tiered rate

With each group of customers, we worked to learn their motivations for using smart thermostats, perceptions of value and energy savings, who in the household interacts with the device (and how), what they know about TOU rates and their perceptions of these rates, and more.

At the close of the study, we assembled a comprehensive report that summarizes our research methods, study details, customer responses, results, and recommendations.

The Result

Our client learned extremely valuable real-world information about how their customers use smart thermostats—both in general and as it relates to TOU rate plans. For instance, unless rate schedules are pushed to the thermostat by their utility, customers will need to program or alter their schedules to align with peak times, similar to using a standard programmable thermostat. Otherwise, smart features could result in customers spending more on energy than intended.

Our recommendations also included preparing and providing guidance for TOU customers, tailored to different smart thermostats. Given a number of customers were unaware of TOU rate plans, we also recommended that the company carefully prepare customers for any mandatory transition to TOU rate plans in advance, including messages not solely rated to dollars and cents, but also addressing customers’ comfort concerns. This work not only underscored the importance of communication around TOU Rates, but provided concrete steps to shape an effective transition to our client’s new rate structure.

Interested in learning more?

Contact us to talk with a team member.

(206) 621-1160

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