I attended a startup conference today, and while I am not professionally in the home efficiency business any more, I couldn’t avoid the session on Clean-Tech Energy. Several experienced company founders described their business models, and it quickly became apparent that they all had concluded the same thing: the vast majority of consumers are not willing to spend money on energy efficiency. And, quite the opposite, businesses will readily adopt efficiency measures that have a reasonable return on investment.
One company CEO is making very small and efficient switching transformers (converting A/C into D/C for electronics), and has found that LED lighting is a great application, since replacement lamps need to fit in small spaces. Many in the audience were clearly anxious to hear her confirm that her market was made by people whose motives were environmental. She said “nope”, and thus her market was business not residential. She also noted that the transformer is just one part of a set of components needed by LED lights, and her product also would make it possible to change the color balance or temperature of the light being produced … and this feature was the only one she had heard any interest in from companies selling consumer products. People would pay $60 for LED light because it was a cool gadget, not for the savings, and certainly not to “go green”.
People want sexy features. They don’t give a damn about ROI. And nobody gives a damn about being “green” or “sustainable”, except for businesses seeing the really long horizon. And those businesses are making change because they see a long-term financial benefit.
This is the cold truth, not really a revelation for me, or probably anyone reading this. It’s just reality.
One thing that motivated changes in people: rebates, tax breaks, and other incentives. In short, people will respond to free money.
Yet meanwhile, climate change rolls along and we’re doing far from enough. And it’s all about the economy these days, and apparently there’s something wrong with the government jumpstarting strategic technologies or solving big problems the market has not yet found a way to exploit. Props to the EPA and others who are managing to address as much as possible through non-legislative means, but it’s not enough.
Are we all really this dumb? Do we just want sex? Are we so bad at math that the promise of money (or pain) in the future isn’t sufficient to change our behavior in the present? Psychologists and behavioral economists will answer: yes, that’s exactly how our irrational brains respond.
So I guess we need to work in this framework to cause change. It’s who we are.