Could energy pricing structures drive energy efficiency?
Posted by Cathy Debenham on 11 February 2011 at 9:15 am
I've just listened to a discussion on Radio 4's Today programme about energy prices. At the moment they are structured so that the first X units are the most expensive, and after that, the price per kWh goes down. The argument was that this penalises people on low incomes.
Obviously, being Radio 4, there was someone there who argued against this point, but it seems pretty obvious (to me anyway) that there's a strong case here.
What wasn't mentioned is that the current pricing structure isn't doing anything to incentivise lower usage. Given the UK's carbon emissions targets, wouldn't it be a good idea to use price as a way of encouraging lower use?
If the first units were at a lower cost, then after a certain usage level the price went up, this would create more of an incentive to increase energy efficiency, both at home and in businesses.
What do you think?
Photo by Anders Sandberg
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