To: Lou L
Why would a utility company offer a rebate on a electrical device? Because it saves them from having to supply as much current? Why would a utility company want to reduce an amount of something its selling?
Its a perfectly sensible business reason - Residential consumers of electricity are low-margin, service-intensive customers (lots of wires for delivering less than 10000 KWH per year, lots of service calls, pay lower residential rates, etc.). Commercial users of electricity are high-margin, low service customers (fewer hookups, high usage, higher rate, etc.)
Since it costs umpty-beaucoup bucks to build a new power plant (and higher power line capacity), both from simple capital expense and regulatory hurdles, it makes sense to encourage your low-margin customers to consume less of your product, slowing the growth of demand, and thereby allowing you to spread the cost of new output over a greater period of time.
This is especially effective with subsidies of CFLs - If the utility is sensible, it takes time to select a quality lamp for its subsidy. The subsidy of 25 cents to a dollar per lamp reduces energy consumption 75% or more over the 5-10 year life of the lamp. This can have a substantial cumulative effect on demand.
To: Jagermonster
You have some good points, but I think your examples are over-stated in terms of costs. Guess I’d have to see the figures. In any case, I’m always suspicious of business models that depend on rebates for business.
46 posted on
04/22/2012 11:09:42 AM PDT by
Lou L
(The Senate without a filibuster is just a 100-member version of the House.)
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