Low-income households spend a disproportionate amount of their income on energy bills. To address this burden and promote clean energy, policies such as the Inflation Reduction Act include programs to provide clean and efficient energy services to low-income households at low or no cost. But even when upfront costs are removed, challenges remain. Eligible households may lack information about the technology, be distrustful of program providers, or simply not have the bandwidth to look into the application process. EPIC scholar Kim Wolske, a research associate professor at the University of Chicago Harris School of Public Policy, and her co-authors examine how to increase program uptake by encouraging existing program participants to nominate their friends or family to participate.
The researchers worked with GRID Alternatives, the program administrator for California’s Single-family Solar Homes (SASH) program. GRID Alternatives had a referral rewards program where existing program participants were sent postcards reminding them that they could receive $200 if they referred friends and those friends installed solar. The researchers tested what would happen if this request for referrals also included one dollar as a gift to thank clients for being part of the solar community. The goal was to invoke a sense of reciprocity—a feeling that they could return the kindness of the gift by offering names of other households that might qualify to participate. The strategy worked, leading to twice as many referrals and more than double the number of solar contracts.
Going one step further, the researchers tested what would happen if they combined the $200 reminder and the dollar gift with a postmarked referral slip. In addition to calling or going on a website to refer someone, households could simply write their friends’ contact information on the card and send it back to the program. This combination of strategies led to five times more people referring someone they knew, as well as five times more solar contracts then only offering the $200 reward.
The study found that reducing uncertainty, making the process simple, and giving a sense of returning the favor can boost referrals. Such strategies could work for other energy assistance programs, from heating and insulation upgrades to electric vehicle incentives.