Smart Tech, Dumb Humans: The Perils of Scaling Household Technologies

Abstract

Smart-home technology has been heralded as an important way to increase energy conservation, but causal evidence remains scarce. We estimate the causal impact of smart thermostats on energy use using data from two novel field experiments in which a random subset of treated households were given a smart thermostat that was installed in their home free of charge. We combine this experimental data with 18 months of high-frequency data on household energy consumption in the form of more than 16 million hourly electricity and daily natural gas observations. In contrast to advertised savings based on engineering models, we find little evidence that smart thermostats have a statistically or economically significant effect on energy use. This result is robust to the inclusion of numerous controls and when the model is estimated on various subsamples of relevance for grid managers and policymakers (e.g., by hour of the day). We explore potential mechanisms using almost four million observations of system events including human interactions with their smart thermostat. Results indicate that user behavior dampens energy savings and explains the discrepancy between estimates from engineering models and those observed in our field experiments.

Keywords: Energy Demand, Smart Grid, Smart Technology, Field Experiment

JEL Classification: D01, Q41, Q48, Q55