Turning Up the Heat: Georgia Tech Economist Finds Price Has Little Impact on Consumers’ Thermostat Choices

Image of US Dollar on Home Heating instrument depicting home heating costs

In a study by a Georgia Tech economist that could help inform future energy policy, half the participants cranked their thermostats despite knowing exactly how much each extra degree would cost them.

Prices are typically the first tool used to get people to save energy, noted Dylan Brewer, assistant professor in the Georgia Tech School of Economics. As climate change affects communities and utilities transition to sustainable sources, it’s increasingly critical for regulators and utilities to understand exactly how price affects consumers’ energy use.

“There's kind of a puzzle that exists in the literature on energy consumption,” Brewer said. When it comes to most commodities, price drives demand, but “if the price of electricity changes, most people are not very responsive.” He wanted to test the popular theory that inelastic demand is the result of consumers not knowing the exact price of turning up the thermostat.

In his 2023 study in the journal Energy Policy, Brewer surveyed a sample of Americans after a winter of real-time heating decisions. They were presented with different cost scenarios and asked about their “bliss point” — the temperature at which they’d keep their houses if money were no object.

As a Ph.D. student at Michigan State University, Brewer was struck by how many landlords offered “free heat” during East Lansing’s frigid winters.

He saw that when “people are not on the hook for a decision, they're often wasteful. But if they're paying for their environmental costs, they're going to conserve.” He focused on this phenomenon in his dissertation and has since launched other projects on the economics of thermostat settings. “It’s my niche,” he said.

In the study, participants knew exactly how much an extra degree of heat would cost them. Yet even at the highest price level ($8 per 5 degrees Fahrenheit), half of them exhibited zero response to price, Brewer reported. On average, doubling heating costs led respondents to say they would lower less than 1 degree Fahrenheit.

Brewer found that participants with incomes below $50,000 and those living in urban areas were more responsive to price changes, while older participants had less elastic demand.

It turns out, Brewer noted, “People simply do not like to be cold.”

The results are just as relevant for warm-weather states. In Georgia in 2022, 42% of the state's electricity was used for air conditioning and nearly three in five households with electric heating, according to the U.S. Energy Information Association.

Based on study results, Brewer noted that utilities confronted with extreme weather or a supply-side disruption might encourage customers to shift electricity usage to off-peak hours rather than assume they’ll be affected by an increase in rates. “If you have an energy emergency and need to curb energy consumption, this is telling you that prices are not going to do it,” he said.

“This is a daily choice that we make,” Brewer said. “Given that we spend a huge fraction of our time in climate-controlled buildings, these types of heating and cooling issues have pretty large implications.”

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Priya Devarajan | SEI Communications Program Manager

 

Written by: Deborah Halber

To Save Energy, Users Let Smart Thermostats Take the Lead

Smart thermostat at home Illustration

Illustration of a smart thermostat within the image of a house

People using energy-efficient smart thermostats are willing to sacrifice comfort and control to save relatively small amounts of energy that could add up if enough people sign on, a Georgia Tech economist reported in a recent study.

With federal and state energy policies targeting aggressive decarbonization in the next 15 years, smart technologies have the potential to help achieve these goals at a reasonable cost, said Casey J. Wichman, associate professor in the Georgia Institute of Technology School of Economics.

In a forthcoming issue of American Economic Journal: Applied Economics, Wichman and colleagues report that automation within smart thermostats can lead to potentially large reductions in household electricity use and costs.

Utilities look to time-of-use (TOU) pricing — where prices are higher during peak demand and lower during lags in demand — to save consumers money and relieve pressure on the grid.

“From an economics perspective, there's this idea that if you set the price right, everything will work out,” Wichman said. “But if consumers don't actually respond to those prices, that limits the effectiveness of the solution.”

For the study, more than 2,100 Toronto-area residents using Ecobee smart thermostats agreed to share their usage data during the 2019 rollout of a suite of new thermostat features that included an automated component.

Participants opted to allow the thermostats to precool or preheat their homes at times of the day when electricity was less expensive, choosing on a sliding scale how aggressive they wanted the algorithm to be. Degree changes within the homes varied from around 1 to 5 degrees, saving participants up to 30 Canadian cents per day in the summer.

“I have always liked applying economic concepts to simple decisions we make in our daily lives,” Wichman said. “This allows me to answer new questions about how decisions matter for the environment, and how policies or technologies can be designed to generate social change. In this project, we’re leveraging new data sources to try to capture the unaccounted-for costs of those policies.”

Studies on energy savings, he said, often miss the in-home comfort cost. These results showed that people seemed willing to trade relatively small monetary savings for a small increase in discomfort, although discomfort was most pronounced for residents who typically spend more time at home. For the most part, people were willing to sacrifice control over their heating and cooling decisions to an algorithm.

This finding surprised Wichman. “We thought we would see more people turn off the feature,” he said. That didn't happen.

As time-varying electricity pricing rolls out across North America, utilities could provide incentives for customers to opt into energy-saving settings programmed into internet-connected home appliances, like water heaters, pool pumps, and electric vehicles.

The researchers’ results suggest that such programs could be designed in a way that customers will accept. This gives Wichman a sense of optimism for the future.

“What is interesting here is that technology can complement economic incentives,” he said. “You can have technology correct for humans’ inability to remember to set their heating and cooling schedule in a way that's consistent with social goals.”

News Contact

Priya Devarajan | SEI Communications Program Manager

 

Written by: Deborah Halber

Generating Buzz: Climate Change Takes Center Stage

Ice caps

Ice caps

April is Earth Month, and according to the National Oceanic and Atmospheric Administration, 2023 was the warmest year on record for our planet. As the global conversation around the climate and humans’ effect on it continues, Georgia Tech researchers are taking a leading role in quantifying the issues posed by climate change and crafting solutions for the road ahead. 

The latest episode of Generating Buzz follows the College of Sciences’ Frontiers in Science event, giving listeners an opportunity to hear from experts, including dean and renowned oceanographer Susan Lozier, Associate Professor Alex Robel, Professor Valerie Thomas, and Associate Vice President of Sustainability Jennifer Chirico as they explore the intersection of science, policy, and human nature. 

Listen to the conversation in the Georgia Tech newsroom.

News Contact

Steven Gagliano

Beyond the Haze: An Economist’s Insight Into Air Pollution

Photo of Dylan Brewer, Assistant Professor in the School of Economics, Georgia Tech

Dylan Brewer, Assistant Professor in the School of Economics, Georgia Tech

Are you under the impression that air pollution is a dichotomous problem where the air is either polluted or it’s not? What else is there to know about air pollution? The surprising answer to this question lies not with a lab scientist but with an economist.

Assistant Professor Dylan Brewer of the School of Economics studies the health impacts of air pollution and the statistical methods useful for teasing apart factors that can confound those answers, all from the lens of an economist. It turns out that viewing the problem of air pollution through an economic framework and applying statistical methods commonly used in the field of economics can shed light on the multiple factors that influence the health impact of exposure to air pollution on different populations.

Recently, Brewer was the featured guest on the podcast The Health Deli, where the hosts were surprised to find an economist making waves at this critical research intersection. Brewer explains why viewing this problem from the perspective of an economist is so valuable and discusses some of his research team’s surprising findings.

The podcast, hosted by three pharmacists, approaches health news from a scientific bent, which turned out to be a great fit for an economist who studies air pollution. You can listen to the podcast episode, “Is It Safe To Breathe Air? How Is This a Real Question?’ on Apple Podcasts or Spotify, as well as other major podcast providers.

Spotify Link https://open.spotify.com/episode/1PDPUZNGEifWA5IvCnVUNK

Written by: Sharon Murphy, Research Associate, SEI

 

News Contact

Priya Devarajan, SEI Communications Program Manager

EPICenter Hosts Lightning Talks for Research and Ideas Exchange

Audience at the EPICenter Lightning Talks held on April 12th at the Georgia Tech Library

Audience at the EPICenter Lightning Talks (Round 2) held at the Georgia Tech Library

On April 12, the Energy, Policy, and Innovation Center (EPICenter) hosted its second round of the “Friday Lightning Talk Series” at the Scholars Event Network space in the Price Gilbert Library.

Eight multidisciplinary participants from Georgia Tech, including postdoctoral students, graduate students, research faculty, and research associates from public policy, economics, electrical and computer engineering, industrial and systems engineering, and EPICenter, presented an overview of an energy-related research project during the session.

Laura Taylor, chair of the School of Economics and interim director of EPICenter, introduced the organization’s new faculty affiliate program through which affiliates, their students, and postdocs present and share research ideas and receive feedback from the audience.

Topics covered during the session included understanding the social costs of natural gas deregulation, managing EV charging during emergencies, exploring whether daylight saving time saves energy, the green energy workforce, the effects of community solar on household energy use, the Atlanta Energyshed project, clean hydrogen production in Georgia, and household responses to grid emergencies.

The interactive session was well attended with over 25 attendees asking thought-provoking questions and providing suggestions on future areas to explore.

The first round was held on March 1 and was such a success that this second round had a full slate of presenters and a full house of audience members. The agendas for both lightning round talks are available below, along with links to presentation slides.

A unit of the Strategic Energy Institute of Georgia Tech, EPICenter’s mission is to conduct rigorous research and deliver high-impact insights that address the energy needs of the southeastern U.S., while keeping a national and global perspective. EPICenter calls upon broad, multidisciplinary expertise to engage the public and create solutions for critical emerging issues as our nation’s energy transformation unfolds.

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Priya Devarajan || SEI Communications Program Manager

Secretary of Energy Announces a Tri-City Alliance With Georgia Tech for Scalable, Equitable, and Innovative Clean Energy Solutions

From the Left: SEI Executive Director Tim Lieuwen, U.S. Rep. Nikema Williams, Georgia Tech Student Azell Francis, Secretary Jennifer Granholm, Mayor Andre Dickens

From the Left: SEI Executive Director Tim Lieuwen, U.S. Rep. Nikema Williams, Georgia Tech Student Azell Francis, Secretary Jennifer Granholm, Mayor Andre Dickens

On a recent visit to the Georgia Tech campus, Secretary of Energy Jennifer Granholm announced that a tri-city alliance of Atlanta, Decatur, and Savannah in partnership with Georgia Tech will receive funding to drive clean energy solutions.

The funding is part of DOE’s Energy Future Grants program, and the Atlanta-Decatur-Savannah partners will receive $500,000 during the planning phase to develop initiatives, policies, and tools to promote green energy deployment in their communities. In total, the grants will provide $27 million in financial and technical assistance to support strategies that increase resiliency and improve access to affordable clean energy. The team will compete with other recipients for additional funding in subsequent phases of the program.

The Georgia Energyshed (G-SHED) team, led by Richard Simmons of the Strategic Energy Institute, will partner with the tri-city team in this project. The modeling and simulation-driven analysis from G-SHED will be used by the Tri-City Alliance project to develop deployment-ready blueprints of clean energy innovations focused on community benefits.

The G-SHED team, formed through another DOE grant, is developing a metropolitan energy planning organization informed by an integrated modeling effort that includes technical, social, and community inputs. Georgia Tech is collaborating with the Atlanta Regional Commission and the Southface Institute in this project. 

Granholm said announcing the funding at Georgia Tech was fitting because its tools “are going to be magnificent for this project for communities to decide the best path for them based on data.” Atlanta Mayor Andrew Dickens, U.S. Rep. Nikema Williams, and several other dignitaries were present during the announcement. Secretary Granholm toured parts of the Georgia Tech campus including the Carbon Neutral Energy Solutions building during her visit.

“It’s exciting when the Secretary of Energy makes a special trip to campus to announce a new Award. I appreciate Secretary Granholm and the Department of Energy for enabling this innovative energy partnership with Atlanta, Decatur, and Savannah,” said Tim Lieuwen, executive director of the Strategic Energy Institute.

From the Left: Richard Simmons (SEI), Jordann Shields (SEI), Chandra Farley (City of Atlanta), John R Seydel (City of Atlanta), Catherine Mercier-Baggett (Southeast Sustainability Directors Network), Rachel Usher (SSDN), Tony Powers (City of Decatur), Andrea Arnold (City of Decatur), Tim Lieuwen (SEI)

From the Left: Richard Simmons (SEI), Jordann Shields (SEI), Chandra Farley (City of Atlanta), John R Seydel (City of Atlanta), Catherine Mercier-Baggett (Southeast Sustainability Directors Network), Rachel Usher (Southeast Sustainability Directors Network), Tony Powers (City of Decatur), Andrea Arnold (City of Decatur), Tim Lieuwen (SEI)

News Contact

Priya Devarajan || SEI Communications Program Manager

Energy and Public Health Mini Symposium

Please join us at on Friday, May 10th from 11am to 1pm for EPICenter’s Energy and Public Health Mini Symposium

Lunch will be served. 

Five research teams including faculty from across three colleges will provide an overview of their interdisciplinary research at the intersection of human health and energy systems. These projects are supported through EPICenter’s 2022 Seed Grant competition.

Presenters include:

New Approach Could Make Reusing Captured Carbon Far Cheaper, Less Energy-Intensive

Three men in lab coats working at a bench on an experimental setup with tubes, vials, and pumps.

A new electrochemical reactor design developed with Marta Hatzell by postdoctoral scholar Hakhyeon Song (middle) and Ph.D. students Carlos Fernández and Po-Wei Huang (seated) converts carbon dioxide removed from the air into useful raw material. Their approach is cheaper and simpler while requiring less energy, making it a promising tool to improve the economics of direct air capture systems. (Photo: Candler Hobbs)

Engineers at Georgia Tech have designed a process that converts carbon dioxide removed from the air into useful raw material that could be used for new plastics, chemicals, or fuels.

Their approach dramatically reduces the cost and energy required for these direct air capture (DAC) systems, helping improve the economics of a process the researchers said will be critical to addressing climate change.

The key is a new kind of catalyst and electrochemical reactor design that can be easily integrated into existing DAC systems to produce useful carbon monoxide (CO) gas. It’s one of the most efficient such design ever described in scientific literature, according to lead researcher Marta Hatzell and her team. They published details April 16 in Energy and Environmental Science, a top journal for energy-related research.

Get the full story on the College of Engineering website.

News Contact

Joshua Stewart
College of Engineering

Seed Grants Fund Research Centers for Critical Minerals, Spatial Computation and Navigation

Yuanzhi Tang

The College of Sciences is funding two research centers through a new seed grant program. 

Selected from a finalist pool of nine proposals, Associate Professors Yuanzhi Tang and Thackery Brown’s ideas were chosen for their high potential for novel interdisciplinary research and impact. 

Tang’s center will focus on sustainable mineral research, and Brown’s on spatial computation and navigation. Applications for the research will span the development of more sustainable batteries, as well as seeking to improve human health and well-being.

“Improving the human condition, fostering community, and pursuing research excellence are at the forefront of Georgia Tech’s mission, and these new centers will play a critical role in furthering that goal,” says Laura Cadonati, associate dean for Research in the College of Sciences and a professor in the School of Physics. “The College of Sciences is thrilled to support these new initiatives, and is excited to continue to develop the seed grant program.” 

A second call for research center proposals is planned for January 2025, with funding to start in July 2025.

The new Center for Sustainable and Decarbonized Critical Energy Mineral Solutions (CEMS), to be led by Yuanzhi Tang, an associate professor in the School of Earth and Atmospheric Sciences, will serve as a hub for sustainable procurement solutions for critical energy mineral resources, including rare earth elements and metals used for battery production.

Thackery Brown, an associate professor in the School of Psychology, will lead the second center, the Center for Research and Education in Navigation (CRaNE). CRaNE will investigate problems related to spatial computation, cognition, and navigation — which has implications for human health, animal conservation, smart architecture and urban design.

“This generous support from the College of Sciences will enable us to host a conference on spatial cognition, computation, design, and navigation; to provide collaborative multi-lab seed grants; and to establish the first of a series of explicitly co-mentored, interdisciplinary graduate student Fellowships,” Brown says. “Collectively, these are the seeds of a high-impact and self-sustaining center.”

About the Center for Sustainable Decarbonized Critical Energy Mineral Solutions (CEMS)

Yuanzhi Tang, School of Earth and Atmospheric Sciences 

Co-sponsored by the College of Sciences, Strategic Energy Institute (SEI), Brook Byers Institute for Sustainable Systems (BBISS), Institute for Electronics and Nanotechnology (IEN), and Institute for Materials (iMat), CEMS began as a joint BBISS-SEI initiative lead project that has since grown into a joint center focused on critical elements and materials for sustainable energy.

Sustainably sourcing these materials provides a critical foundation for both high-tech industry and green economy. “Rare earth elements and battery metals like lithium, copper, and nickel are in high demand, but low domestic resources and production have resulted in a heavy reliance on imports,” Tang explains. “How can we domestically produce these resources, and how can we do this sustainably? Georgia Tech and the College of Sciences are in a unique position for developing a large regional research umbrella to connect these dots.”

CEMS will leverage on three key pillars: science and technology development, strengthening collaboration among the University System of Georgia (USG) universities, and developing regional resources and economy, Tang says. “By leveraging collaboration among Georgia universities, and fostering engagement with regional industries, the Center will develop new science and technology, leading the way in research on how to procure these ‘essential vitamins’ for clean energy transition in a sustainable and decarbonized manner.”

About the Center for Research and Education in Navigation (CRaNE)

Thackery Brown, School of Psychology 

CRaNE will focus on solving problems related to spatial computation, cognition, and navigation. “How do we treat catastrophic loss of one’s ability to get from A to B in Alzheimer's disease? How do we build smarter cities that are easier and more carbon efficient to navigate? How can we develop robots,” Brown says, “which navigate with the flexibility and efficiency of our own minds? CRaNE will bring together experts from many different fields to help address these problems with truly creative and integrative scientific and technological solutions.”

CRaNE will support interdisciplinary collaborative research, including developing a graduate student fellowship program, and conducting K-12 outreach.

“Our goal for CRaNE is to position the College of Sciences, Georgia Tech, and our extended network of collaborator institutions as a center of gravity for cutting-edge work on how the mind, brain, and artificial systems process space — how they can be made better at it, and how we can engineer our world around us in ways that support the humans and animals that need to navigate it to survive,” Brown says.

Emphasizing the collaborative nature of CRaNE, Brown adds that “by targeting collaborative grants, research, and education, and by promoting outreach and education earlier in the STEM pipeline, we hope to accelerate progress at the frontiers of these fields — and to invest in future science that cannot be easily addressed by a single lab or discipline.”

 

Thackery Brown
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Written by Selena Langner

Contact:
Jess Hunt-Ralston
Director of Communications
College of Sciences
Georgia Tech

2024 Frontiers in Science: Climate Action

Susan Lozier, Julia Kubanek, L. Beril Toktay, and Tim Lieuwen

Susan Lozier, Julia Kubanek, L. Beril Toktay, and Tim Lieuwen

This Earth Month more than 100 campus and community stakeholders gathered near the Georgia Tech EcoCommons for the 2024 Frontiers in Science: Climate Action Conference and Symposium.

On April 18, the College of Sciences hosted more than 20 speakers and panelists from across the Institute and Atlanta community presenting groundbreaking research and discussing innovations and ideas in climate change, challenges, and solutions. 

Georgia Tech President Ángel Cabrera (M.S. PSY 1993, Ph.D. PSY 1995) kicked off the morning sessions by highlighting the Institute’s new Climate Action Plan, which outlines the pathway to achieve net-zero emissions by 2050. Cabrera’s remarks focused on Georgia Tech’s role on the frontlines of research and education informing how we respond to climate challenges — and noted that the Institute’s work must extend beyond our laboratories and classrooms.

“It is essential that we not only do the science, but that we also tell that science to the world,” Cabrera says.

Interdisciplinary inquiry

This year, Frontiers in Science featured an array of climate research and initiatives led by the College of Sciences, fellow colleges across Georgia Tech, and the wider Atlanta community.

Following a three-year hiatus of the Frontiers series, the 2024 edition re-envisioned the signature annual event as a research conference and symposium to convene campus experts — and to incubate seed grant proposals to support the work of early career faculty.

Frontiers previously hosted Nobel laureates and invited thought leaders for individual talks across the College’s six schools, and celebrated milestones like the International Year of the Periodic Table of the Chemical Elements.

“This year, we wanted to showcase what we are doing right here in the College of Sciences and throughout the Institute,” says Susan Lozier, dean of the College of Sciences, Betsy Middleton and John Clark Sutherland Chair and professor in the School of Earth and Atmospheric Sciences. “Our faculty are at the forefront of broadening our knowledgebase and uncovering solutions in areas critical to the planet and our well-being. We wanted to uplift that work and see what sort of connections could be made.”

Connections and collaboration were key themes of the day as faculty, staff, students, and alumni participants representing all six Georgia Tech colleges shared research results and ongoing work and discussed collaborative ideas for horizons ahead.

“Scientists alone cannot [create accurate models],” noted Annalisa Bracco, professor in the School of Earth and Atmospheric Sciences and associate chair for Research, who shared her own research alongside Lozier, who presented a version of her 2024 TED Talk on ocean overturning. “Engineers alone cannot do it. We need social scientists, policy makers, communicators.”

The importance of an interdisciplinary approach was reinforced by the Strategic Energy Institute at Georgia Tech (SEI) and Brook Byers Institute for Sustainable Systems (BBISS), which announced an interdisciplinary seed grant funding opportunity for assistant professors with ideas for new climate solutions.

Frontiers in focus

Across three themed sessions, faculty and leadership from the Colleges of Sciences, Engineering, and Design spearheaded talks on the ocean and cryosphere, biodiversity, carbon cycling, coastal wetlands, biofuels production, and beyond.

Panels on climate challenges across community, technological, and policy initiatives were hosted by Georgia Tech Vice President for Interdisciplinary Research and Professor in the School of Biological Sciences and the School of Chemistry and Biochemistry Julia Kubanek.

Following a networking lunch with climate table topics, Georgia Tech Executive Vice President for Research and Professor in the School of Electrical and Computer Engineering Chaouki T. Abdallah (M.S. ECE 1982, Ph.D. ECE 1988) kicked off the afternoon sessions — which also announced the scholarship recipients of a student video competition and featured videos with a pair of alumnae working in meteorology, climate research, and policy.

Afternoon highlights also included discussions on the Georgia Tech Climate Action Plan and Sustainability Next initiative, led by Jennifer Chirico (B.S. MGMT 1997, Ph.D. PUBP 2011), associate vice president of Sustainability for Georgia Tech Infrastructure and Sustainability, and Jennifer Leavey (B.S. CHEM 1995), assistant dean for Faculty Mentoring in the College of Sciences and interim assistant director for Interdisciplinary Education in the Brook Byers Institute for Sustainable Systems.

Although many of the presentations provided a stern outlook of the state of our ecosystems, the conference concluded with a sense of hope. This optimism was grounded in the range of opportunities that exist to address climate challenges — thanks, in part, to the body of knowledge and solutions being tested and explored by Georgia Tech researchers.

At the end of the day, Katie Griffin, a first year undergraduate student in Environmental Science, read Amanda Gorman’s poem Earthrise and provided this reminder:

All of us bring light to exciting solutions never tried before
For it is our hope that implores us, at our uncompromising core,
To keep rising up for an earth more than worth fighting for.

 

Experience the event in pictures with the College of Sciences’ Flickr account, and discover the highlights through the day’s live tweets on College of Sciences’ X account.

Frontiers in Science Banner Outside at Sunrise

Frontiers in Science Banner Outside at Sunrise

Jenny McGuire

Jenny McGuire

Frontiers in Science Policy Discussion Panelists: Michelle Midanier, Valerie Thomas and Joe F. Bozeman III

Frontiers in Science Policy Discussion Panelists: Michelle Midanier, Valerie Thomas and Joe F. Bozeman III

Frontiers in Science Participants

Frontiers in Science Participants

President Ángel Cabrera

President Ángel Cabrera

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By: Lindsay Vidal

Jess Hunt-Ralston
Director of Communications
College of Sciences at Georgia Tech