Utility Rebates for ENERGY STAR Appliances: Are They Effective?

Souvik Datta and Sumeet Gulati ()
Additional contact information
Sumeet Gulati: Faculty of Land and Food Systems, University of British Columbia, Canada

No 11-81, CEPE Working paper series from CEPE Center for Energy Policy and Economics, ETH Zurich

Abstract: In this paper we estimate the increase in the market share of ENERGY STAR-qualified appliances that can be attributed to targetted cash rebates offered by utility companies. To estimate the impact of these incentives we use the variation in timing and size of the utility rebates across the US states. We then use these estimates along with information on the average energy saved by using an ENERGY STAR appliance relative to a non-ENERGY STAR appliance to provide an estimate on the cost per tonne of carbon saved by the rebate program. Our results show that a dollar increase in the rebate leads to a 0.3% increase in the share of ENERGY STAR-qualified clothes washers while the effect of rebates is not significant for dishwashers and refrigerators. Assuming a redemption rate of 40%, we calculate the cost of saving a tonne of carbon through the clothes washer rebate program to be around $158. The corresponding cost of a megawatt hour saved (about $32), is lower than the estimated cost of building and operating an additional power plant and the average on-peak spot price. We conclude that the ENERGY STAR clothes washers rebate programs are a cost-effective way for utilities to reduce energy demand.

Keywords: Eco-labelling; energy efficiency; appliances; utility rebates; carbon saving; energy saving (search for similar items in EconPapers)
JEL-codes: C13 C33 L68 L94 Q4 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2011-12
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Related works:
Journal Article: Utility rebates for ENERGY STAR appliances: Are they effective? (2014)
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