Market Failures

• Payback gap—consumers face higher interest rate than producers.

• Differences of prices from marginal cost—with franchised monopolies or regulatory oversight, prices rarely reflect marginal cost.

• Risk sheltering of the utility—monopoly franchise or regulatory oversight shield utility from risk.

• Rate of return regulation—leads to an incentive to over invest.

• Externalities—externalities are not seen by market actors.

• Lack of information—consumers do not choose EE technologies because of lack of knowledge.

• High transaction costs—consumers miss opportunities because of high transaction costs.

• Disconnected decision makers or tenant/landlord relationships—consumers may not be able to influence EE decisions. This occurs, such as for instance, when one party, the landlord pays for the equipment while the other party, the tenant, pays the energy bill.

Was this article helpful?

0 0
Renewable Energy 101

Renewable Energy 101

Renewable energy is energy that is generated from sunlight, rain, tides, geothermal heat and wind. These sources are naturally and constantly replenished, which is why they are deemed as renewable. The usage of renewable energy sources is very important when considering the sustainability of the existing energy usage of the world. While there is currently an abundance of non-renewable energy sources, such as nuclear fuels, these energy sources are depleting. In addition to being a non-renewable supply, the non-renewable energy sources release emissions into the air, which has an adverse effect on the environment.

Get My Free Ebook


Post a comment