In this post, BizEnergy talks to Philip Playfair, co-founder of Lowfoot, a company that offers rewards to members who reduce their electricity consumption.

For Philip Playfair, early retirement lasted all of two years.

Granted, it was two years of traveling to France and back, researching his grandfather’s involvement in the First World War. But once that was done, it was time for a new project.

“I was thinking about what to do next,” says Playfair over a glass of fresh-squeezed orange juice in a Toronto coffee shop. “And I started thinking about why conservation programs were—and I probably shouldn’t say this, but I will—mediocre at best to ineffective at worst.”

Playfair’s theory was that conventional conservation programs didn’t work because they appealed primarily to people’s altruistic natures—a lofty philosophy, yes, but one that’s historically pretty weak at getting people to change their behaviour. “If you look at history,” he points out, “there’s no clear-cut examples of people doing the right thing simply because it was better for humanity. 99.9 percent of the time humans act out of pure self-interest.”

So Playfair decided to figure out a way to appeal to people’s less generous natures by offering rewards for reducing electricity consumption, and using social media to provide some healthy competition and social pressure. The advent of smart meters, which track energy usage by time of day and adjust billing accordingly, meant that conservation could be tracked as a verifiable, objectively measured quantity.

The result: Lowfoot, a service that not only helps you lower electricity costs, but actually pays you to do it.

Get paid to reduce electricity costs? Really?

Too good to be true? You’re probably thinking there’s a catch, or a complicated set-up.

On the contrary, it’s pretty simple:

  1. Members (residential homes or commercial businesses with a smart meter in one of Lowfoot’s territories) sign up and allow Lowfoot to connect to their smart meters through a 256-bit encrypted connection.  You’ll need to check and see whether your utility is accessible by Lowfoot—not all of them are yet.
  2. Membership is free, and, as the website says, always will be.
  3. Lowfoot then reads the meter and calculates usage targets.
  4. If members meet their conservation targets every month, they’re rewarded with Lowfoot credits, which can be exchanged for cash using PayPal.

Sign-up is online, and takes only minutes: create an account and connect your smart meter (you’ll need an online account with your utility provider so Lowfoot can access your data). You can be a member of Lowfoot without connecting your meter—you won’t get paid for your reductions, but you will get access to the Lowfoot community and a wealth of member-generated conservation tips.

To reduce their usage, members make small changes that can have big results. “I’ve done a few simple things, really,” says Paul Marinelli, a Lowfoot member since October, 2010. “I’ve replaced all bulbs with compact fluorescents, ensured my PC is put into sleep mode, ensure we run the dishwasher and laundry during off-peak hours, unplug all non-used appliances, and have purchased a device that turns things off when the TV goes into sleep mode.” Marinelli estimates that his consumption has dropped about 30 percent since signing up. Generally, members tend to save between 10 and 30 percent on their electricity bills per month.

Monthly payouts tend to range from a couple of dollars to a one-time high of almost $50. Beyond that, though, members say that conservation is made far more tangible—and therefore easier to maintain—with Lowfoot’s daily usage updates, charts and graphs. As Lowfoot member Mary Zahariadis-Hart puts it, “Without awareness you can’t change. Conservation is easy if you own it.”

And where does the money come from? At the moment, advertising on the Lowfoot site. In the future, potential sponsorship deals and, ultimately, the company’s ability to sell demand reduction back to the electricity grid.

Small businesses can get in on the saving/payout action, too

According to Playfair, Lowfoot offers small commercial members a great opportunity to rethink their energy costs.

“Anyone with a smart meter can sign up for Lowfoot,” says Playfair. “There are tremendous advantages to reducing costs on the energy side—especially since the price of energy is going to keep going up. There’s no two ways about it.”

He sees a time when businesses will start to rethink their activities based primarily on time-of-use costs. “For a small business, it may become worth it to assess whether it’s wise to open during peak times.”

Tips for reducing restaurant electricity costs

For restaurants whose business depends on being open during peak usage times, Playfair has these electricity reduction tips:

  • Turn things off completely. Coffee makers, toasters, microwaves and other small appliances all draw power even when they’re not operating—and continue to draw power even when they’re turned off. Use a power strip with an off button to plug in small appliances and turn off the power bar at the end of the day. Doing this could save you 20-30 percent on your electricity costs.
  • Use a Kill-A-Watt (or other energy meter) to measure which appliances use the most electricity. Using an energy meter helps you assess which of your devices use the most power, giving you data to adjust your use of high-energy appliances during high- and mid-peak periods.
  • Do a light audit. Eliminating unnecessary lights can go a long way to reducing your costs, especially if you have to keep your lights on during high- and mid-peak periods.

Want more information?

Check out the Lowfoot website and take a look at our other energy efficiency how-tos for more conservation tips.

Image credit: Philippe Put