What laundry detergent can teach the electric industry
A lot has been written about the potential impact that Volvo’s announcement will have on both the auto and oil and gas industries.
This article is about the consumer side of that. It’s also a compare-and-contrast piece between Volvo’s approach and one espoused in the electric industry. And it’s a case for why trying to get consumers to change their behavior voluntarily isn’t always the best option when we’re trying to get to a more sustainable future.
"What?" you say. "Shelton Group’s all about creating behavior change — it’s one of the three things your group does besides telling corporate sustainability stories that build brands and marketing products that are more efficient and sustainable!" Yes, sometimes the faster path to change is simply to take away the less sustainable option and force the change.
Case in point: concentrated laundry detergents
In 2008, U.S.-based Walmarts and Sam’s Clubs stopped selling giant pitchers of laundry detergent in favor of smaller pitchers containing concentrated formulas. That meant using and shipping less water across the country and using a lot less plastic (at the time, Walmart estimated this move would save 400 million gallons of water, more than 95 million pounds of plastic resin and more than 125 million pounds of cardboard). It also meant that Walmart freed up shelf space for more products — everyone wins!
The consumer piece was this: none of us had to agonize over whether to buy the giant container we were used to lugging home vs. the smaller one that would require us to remember not to fill the whole cap up with detergent. We were only given one option and that’s what we chose. To my knowledge, there was no massive consumer pushback or wailing and gnashing of teeth; we just went with the flow and bought what was on the shelf.
(In fairness, it did seem to me that it took the detergent manufacturers a long time to stop making the cap the old, big size, which likely resulted in consumers over-portioning — and buying more laundry detergent.)
The point is, the laundry industry changed the product and consumers followed suit. At the time, Walmart said, "The company’s goal is to be a catalyst for the transformation of the entire liquid laundry detergent category across the retail industry and save vast amounts of natural resources." And based on what’s available today on the shelf, they’ve succeeded. This entire category changed and consumers changed right along with it.
The Volvo model
That’s how Volvo’s model works, too. They’ll stop making combustion-only engines in a couple of years and other car makers will follow suit until one day the only option for people to buy is the environmentally friendly option. No agonizing over whether to buy the thing you know and are used to vs. the new green thing. No mental calculations about environmental impact and trade-offs. It’ll just be the only option, so that’s what we’ll buy.
Will we have to learn a few new operational behaviors? Probably, if my experience with my EV is any indication. But just like we’ve all learned how to work with concentrated laundry formulas, we’ll learn how to drive hybrids and EVs.
In these two cases, the model for environmental change is to force consumers to learn it by not giving them any other option. And in both cases, it allowed the companies to make a bold environmental commitment and tell a brand-boosting sustainability story.
The electric industry’s conundrum
By contrast, the electric industry is dealing with a giant sustainability problem, and the industry itself seems to be agonizing over whether to adopt the Volvo and Walmart model of forcing behavior change.
The problem is this: As more of us add solar systems to our homes and buildings, there’s a glut of solar energy being generated on sunny afternoons, and nobody to buy it. According to a recent article, last year 305,241 megawatt hours of solar and wind electricity went unused — a loss of enough carbon-free electricity to power about 45,000 California homes. (The industry calls this unused electricity "curtailed," which sounds way more benign than "wasted," which is what it is.)
What can be done?
It seems as if California could just sell the excess power to neighboring states but, au contraire, our grid doesn’t work like that. It’s actually multiple grids, and the rules/permissions for selling from one grid to the next are complex and arcane. Another solution, then, is to force consumer behavior change.
This can be done by implementing time of use (TOU) billing across the country. Currently, most of us pay the same flat rate for electricity no matter what time of day we use it, which is actually quite crazy because it costs more money to produce electricity at certain times of day and under certain conditions than at others.
Under TOU rate plans, you pay more for the energy you use during the most expensive time of day (when electricity supply is in high demand) and less for electricity you use during the least expensive time of day (when demand is low and supply is high). If you want to pay the least amount of money for your electrons, you adjust your behavior to follow suit and/or buy appliances that automatically will adjust themselves for you.
Yet most utilities only offer TOU plans as optional, which means very few of us are signing up for this voluntary behavior change. The state of California has mandated the change to TOU billing in 2018, and, hopefully, the industry will learn important lessons about how to do this most effectively from a consumer understanding/adoption standpoint compared to a consumer outcry standpoint.
Just do it
And then it will be time for the entire utility industry to get on with it and implement TOU billing as the new normal across the country. No more pilot programs, no more anguish on the part of utility executives and regulators. Just do it. And tell a brand-boosting sustainability story about it — the same way Walmart did with concentrates and Volvo is doing with hybrids and EVs.
Will Americans bellyache about having to pay attention to their electricity usage and actually take responsibility for their consumption? Of course. My 6-year-old bellyaches every time I make her pick up her toys instead of doing it for her. But she’s learning to pick up her toys.