Behavior Change Case Study: LA Department of Water & Power – The Shared Solar Program

By Kate O'Brien, Senior Writer for Meeting of the Minds

Kate O'Brien is a consultant and writer for Meeting of the Minds. A collaborative consultant focused on facilitation, coaching, and capacity building, Kate supports an array of change agents and their transformative work in communities across the United States.

The Los Angeles Department of Water and Power (LADWP), the largest municipally-owned water and power utility in the nation, is lighting the way in making solar power more equitably accessible to all with the design and launch of its new Shared Solar Program. Once up and running this spring, the program will allow LADWP’s residential customers living in multi-family dwellings (apartments, condominiums, and duplexes) to participate in the solar economy while fixing a portion of their electric bill against rising utility costs. The program took four years to create, and engaged dozens of relationships from concept to launch.

Established more than 100 years ago, LADWP delivers reliable, safe water and electricity to four million residents and businesses across Los Angeles. A five-member Board of Water and Power Commissioners establishes policy for the LADWP. These Board members are appointed by the Mayor and confirmed by the City Council for five-year terms.

Aura Vasquez is a recent former LADWP Commissioner whose five-year term just ended in December 2018. As a Commissioner, Aura championed the Shared Solar Program concept, calling for a solution to the disparities in customer participation that LADWP leaders observed of the utility’s earlier solar incentive programs. “There were all these people for whom it was impossible to participate in the solar economy, simply because they were renters and not homeowners,” says Aura. “It’s a question of ethics, a question of equity. How can we, as a publicly-owned utility, allow such disparities to persist?”

Jason Rondou, Manager of Strategic Development and Programs with LADWP, elaborates: “LADWP has been running energy incentive programs since 1999, so there’s a lot of data on who’s participating in what. Our numbers have consistently shown low rates of solar adoption among renters, and especially multifamily dwellers.” Promoting solar energy adoption involves much more than simply helping utility customers “go green”. Equity-centered leaders like Aura Vasquez know that participation of a critical mass of customers is essential in a city’s quest to meaningfully lower its carbon emissions. “The reality today is that over 50% of Los Angeles residents are renters, so getting all those people to adopt solar is how we can achieve real climate resiliency,” says Aura.

Once LADWP acknowledged the skewed trends in solar participation, the utility began promoting its programs in lower-income communities and communities of color. These areas, which the State of California had designated as ‘disadvantaged’, were the same ones where LADWP’s data had shown little to no solar penetration. “LADWP prioritized solar infrastructure installations atop homes in those neighborhoods, enabling households to host solar power generation and earn money by selling excess electricity back to the grid.” But, even after focusing its efforts in underrepresented areas, LADWP staff saw that participation still trended toward homeowners who were, on the whole, wealthier and whiter.

“Essentially, customers on our low-income rate, as well as those located in disadvantaged communities—those who could benefit most from lowered utility costs—were often shut out of our solar programs,” says Jason. One major barrier to participation among people with lower incomes is “the up-front investment in infrastructure required on the part of both utility and customer,” Jason explains. “Another barrier was that renters rarely have a say in the decision to install solar infrastructure on the roof their landlord owns. Even if solar were installed, the resulting cost savings wouldn’t necessarily be shared with the renter,” he says.

There were institutional barriers, too. “Our Solar Rooftops Program, which launched back in 2017, held promise,” Jason says. Among other things, however, the prospect of rate-payers selling electricity back to the utility triggered the need for significant upgrades to LADWP’s billing system. “LADWP is a large organization serving millions of customers. Our billing system is massive. Making any major IT change like the ones this program needs would require a coordinated project and communications plan. In this case, it also required a good deal of will-building. We had to get the IT team, which was already fielding a long to-do list of system modifications for other projects, on board in terms of prioritizing this program,” says Jason.

Then-Commissioner Vasquez and other shared solar champions urged management to take coordinated action, “but both internally and externally, people were saying, ‘we already run solar incentive programs, why do we need to add another one and deal with all these changes?’,” Jason explains. “Confronting this rationale, communicating why the changes were so important, and in the process building the will among people who saw a lot of work in what we were proposing, required strategy.”

In 2013, when Commissioner Vasquez joined the LADWP Board, she and other equity leaders on staff began engaging local community based organizations (CBOs) in discussions about the disparities in solar program participation. They met frequently to sustain their dialogue, and to brainstorm possible solutions to the challenge. “There were two organizations in particular that were highly supportive of making solar accessible to low-income people and to renters. They said ‘we want to see a program like this happen, so much so that we’ll help you do it’,” recalls Jason.

Jason’s team initiated bi-weekly meetings with representatives from the two CBOs, and included them in the planning and implementation of several public meetings focused on equitable access to solar. “The organizations held their own public meetings, too, and invited utility representatives to attend and participate in their agendas,” says Jason. “These two CBOs were very effective at communicating the support they knew was there on the ground. Community involvement was instrumental in elevating the equity discussion, first at the departmental level, and ultimately, with the Board of Commissioners,” recalls Jason.

By 2015, in response to that mounting community support, the LADWP Board of Commissioners approved its 2015-2020 rate action. Coupled with that decision was the Board’s expression of commitment to examining issues of fairness, service disparity, equity among rate payers, and equity across all of LADWP’s operations. “Suddenly, across the utility, we had a mandate to study each and every one of our expenditures happening in our service area. We had to look at where investments were being made, where they weren’t, and how the data informed decision-making for every one of our planned upgrades,” explains Jason.

The following year, the Board of Commissioners adopted the Equity Metrics Data Initiative Resolution, which outlined the utility’s intention to track, measure, and report on how LADWP programs are serving every customer in its service area. Following that resolution, awareness about the equity initiative started to grow at the departmental level, Jason says. “People started asking ‘how can we get the ball rolling?’.” Because Jason’s team had already been working on the design of the Shared Solar Program, “we were able to talk up the idea,” he says. “We told them, ‘this program we’ve been working on is a great way to get at exactly what the Equity Metrics Data Initiative is aiming to do. But here’s the thing: we really need your support’. And then it kind of just took off from there,” says Jason.

The Equity Metrics Data Initiative gave staff and Commissioners data, a common language, and shared understanding about the value of equity considerations. “Once equity metrics entered the conversation, the Shared Solar Program concept quickly captured the attention of the Board, LADWP’s General Manager, the Mayor, and stakeholders across the community,” Jason recalls. The equity initiative elevated the importance of the Shared Solar Program. “Without question, the mandate and the data helped us justify why shared solar was so important,” explains Jason.

At that point, efforts to advance program development centered on aligning management and staff around work planning and priorities. Incrementally, LADWP as an organization came to “more broadly appreciate the value of what we were trying to do,” says Jason. As of December 2018, the billing system upgrades process came to a close. “And now, here we are, just days from program launch,” Jason says.

The community based organizations are still engaged in shaping the program’s roll-out and marketing strategy. “As we develop our marketing plan, the CBO reps are there alongside us in our meetings. They’ve been embedded in the entire program development process, and continue to be willing to sit at the table, communicate concerns the community had, help ensure they are addressed, and support the utility’s efforts to overcome and mitigate public skepticism,” says Jason.

While there’s great excitement in the community about the launch of the much-anticipated program, Jason says there’s one challenge yet to be solved. “Right now, when someone first subscribes to be part of the program, they encounter a premium on the rate they’re charged to account for the infrastructure cost,” says Jason. In the initial years of the program, adding on that up-front cost brings the solar customer’s rate above current retail prices. After two to three years, as the retail rate begins to rise, the customer will begin to reap the savings of their fixed rate. “But for the low-income families with no margin, we need a way to buffer or eliminate that steep up-front cost, or it’ll still be prohibitive for them,” explains Jason.

“We’re currently seeking grant funding or some other mechanism to address that up-front infrastructure cost, because we want to provide a shared solar program that truly works for lower-income customers,” explains Jason. “Until we get there, we’re going to try to mitigate that burden by co-marketing the energy efficiency upgrades we can offer alongside the Shared Solar Program. This doesn’t completely address the problem, but by investing in home and appliance efficiency, we can help people save a little extra money in the interim as they go solar.”

 

Behavior Change Analysis

There are a number of behavior change elements involved in the story of LADWP’s Shared Solar Program coming to life, both in the four-year effort to design and launch it, and in the forthcoming planning and implementation of the program’s roll-out and marketing to would-be customers. Numerous examples that reflect elements of both the EAST and MINDSPACE frameworks are evident.

Aura’s framing of the patterns of disparity in solar participation, and her sense that LADWP has an obligation to address such disparities, highlights her concern with the COMMITMENTS that the utility has made to the public as a publicly-owned organization.

In engaging the community based organizations deeply in dialogue about the disparities, brainstorming about solutions, and planning for program roll-out and marketing, LADWP staff tapped the power of SOCIAL networks to build ardent community support for the Shared Solar Program.

Especially in the early years of the effort, the CBOs conveying the community’s support for the Shared Solar Program served as an important MESSENGER that convinced the Board of Directors to make a public commitment to equity with the passing of its Equity Metrics Data Initiative resolution.

The effort to align LADWP’s Board members and staff in their respective roles to support the design and launch of the Shared Solar Program was helped by the SALIENCE those stakeholders perceived of the program’s equity goals.

The TIMELINESS of the Board’s passing of the Equity Metrics Data Initiative resolution helped the Shared Solar Program build awareness about how patterns of disparity in solar program participation fell along socioeconomic and racial lines among staff and management, allowing the program development process to gain traction internally.

Co-marketing the utility’s energy efficiency upgrades alongside the Shared Solar Program demonstrates LADWP’s attempt to use an INCENTIVE to encourage participation by offsetting the steep up-front cost scenario associated with the program.

The marketing required to highlight the customer’s cost savings over time will require a concerted effort to make program participation ATTRACTIVE in spite of the required up-front cost of the solar infrastructure.

 

Conclusion

LADWP provides its 681,000 water customers and 1.4 million electric customers with quality service at competitive prices. It stands as a leader in assuring more equitable access to renewable power generation with its Shared Solar Program, and in its continuing efforts to assess operations, program development, and service delivery utility-wide with an eye toward fairness and equity. While still actively working to eliminate anticipated barriers to participation in its solar incentive program, LADWP’s efforts will inevitably be successful if it continues to develop strategies collaboratively with its customer base, and to ensure those strategies factor in the tendencies of the human brain and human behavior. Visit LADWP’s website to learn more about this innovative utility’s Shared Solar Program and its many other Go Green incentive programs.

 

Special thanks goes to Jason Rondou of LADWP and Aura Vasquez, recent former LADWP Commissioner, for their willingness to be interviewed for and participate in this project.


 
The theoretical basis for the Behavior Change Blog Series is informed by two mnemonic frameworks shown in detail below. The MINDSPACE framework is a list of the elements that inform cognitive biases and human behaviors, while the EAST framework is a list of directives that are derived from MINDSPACE and help inform strategies for influencing behavior change in humans. These two frameworks were established by the Behavioural Insights Team (BIT), a social enterprise based in the United Kingdom.

 

MINDSPACE Framework EAST Framework
Messenger – We are heavily influenced by who communicates information to us. Make it Easy – Harness the power of defaults, reduce the ‘hassle factor’, simplify messages.
Incentives – Our response to incentives is shaped by predictable mental shortcuts such as reference points, aversion to losses, and overweighting of small probabilities. Make it Attractive – Draw people toward preferred behaviors, design rewards and sanctions to maximize effect.
Norms – We are strongly influenced by what others do. Make it Social – Show people the norm, use the power of networks to encourage and support, encourage people to make a commitment.
Defaults – We “go with the flow” of pre-set options. Make it Timely – Prompt people when they are most likely to be receptive, consider immediate costs and benefits, help people plan their response.
Salience – Our attention is drawn to what is novel and also to what seems relevant to us.
Priming – We are often influenced by subconscious cues.
Affect – Our emotional associations can powerfully shape our actions.
Commitments – We seek to be consistent with our public promises, and to reciprocate acts.
Ego – We act in ways that make us feel better about ourselves.

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