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Wednesday, September 27, 2006

Energy Use

The recent studies of home buyers show that buyers are interested in energy saving devices and also some even more suprising requests are which way the house is facing. With the prices of oil being as high as they are consumers are becoming more curious about their homes and what they can do to conserve energy. Homes are now being desingned to bring in more sunlight to insulate the house. It is proven that a single pane piece of glass is ten times less energy efficent than a wall if there was a change to more walls that change could bring one of the highest returns on investment. Another big energy efficent tool that has been found to be very helpful is the instalment of a smart clock thermostat that will lower the heat at night and even in those times that the house is vacant during the day. With utility companies doing an energy audit on homes this will make a big difference for consumers in the long run. These utility company energy audits found that the resason behind alot inefficent uses of energy was due to simple fixes such as selant on a window so air couldnt escape. when utility companies narrrow their studies to each individual appliance they can quickly see that the majority of some peoples bills are going to on particular appliance that may be old and need to be replaced. For example one owner found that 25 percent of her bill has due to the worst energy consumer the refrigerator which may over due for a more efficent refrigerator. The American Council for an Energy Efficient Economy has a 250 page book that has the exact brand names of items and useful liffe style tips to having more home energy savings.

It's nice to see that homeowners are becoming more aware of the energy that is leaving our home. But I would pose this question: If homeowners become more energy conscious and use less energy- thus saving on their current utility bills- will the decrease in revenues received by the utility company due to the less enrgy used by homeowners cause the utility company to raise their rates? While saving energy (and some would argue the environment), is the homeowner really going to save money?
Do you think there are any sources of market failure associated with energy use and energy conservation? Does a news article about how people consider various aspects of energy use when they buy homes suggest it is unlikely there are sources of market failure associated with such concerns?
Yeah I do think that there is a market failure when dealing with enrgy use in that a utility company has monopoly power. I dont think that there are any market failures that deal with energy conservation.
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