WEAI/AERE 2009 - Individual Paper Abstract
Title: Are Purchase Rebates for Energy Star Appliances Cost-effective?
Author(s): Souvik Datta and Sumeet Gulati, University of British Columbia, Vancouver, BC (photo: TAC)
Abstract: We study the impact of rebates given by utility companies on the purchase of Energy Star labelled appliances in the US. Specifically, we estimate the increase in the share of Energy Star qualified appliances that can be attributed to these financial incentives. To estimate the impact of these incentives we exploit the variation in availability, timing and value of the utility rebates across the US states (such rebates exists only in some states, and are introduced at different times with different values). 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 a rough estimate on the cost per tonne of carbon saved by these policies. Results from our preferred specification show that an increase in a dollar value of rebate leads to a 0.2% increase in the share of Energy Star-qualified clothes washers while it is not significant for dishwashers and refrigerators. Given that the average rebate for a clothes washer in our sample is approximately $50 this leads to a 10% increase in the share of energy-efficient clothes washers. Using the calculated estimates of the impact of the utility rebates and available estimates of the carbon emissions factor for electricity we find that a dollar utility rebate for clothes washers will save 575g of C equivalent emissions over its lifetime. The cost of reducing a tonne of carbon, therefore, is approximately $1,739.