Study: Utility companies are punished and not rewarded for energy efficiency

The desire for energy efficiency finds itself more in the public spotlight during the summer, as families look to reduce costs on the expensive air conditioning systems that keep their houses cool for the season. Energy efficiency at home isn't just a financial consideration, but an environmental one, too. According to a new study, one of the current problems facing advocates of energy efficiency is that the utility companies providing power to residences are not rewarded but instead punished for trying to take more eco-friendly paths in energy consumption.

Inara Scott, an associate professor at Oregon State University and the author of this study in "Environmental Law," found that there aren't incentives for companies to seek energy efficiency and that the status quo actually hinders business models that aim for more sustainable means.

"Right now the system actually discourages utilities from building programs to increase efficiency," Scott said.

Scott's research reveals that the problem lies with the old rate structure model that many utility companies in the United States still operate under, wherein the more energy that is produced, the greater the return for shareholders. Oppositely, if a company tries to become energy efficient, that would mean less power being sold, which equates to less of a return. In Scott's words, the system essentially "penalize[s] utilities for selling less energy."

To that end, Scott said she believes that one of the keys to pushing energy efficiency is to redesign rate structures so that they don't "reward utilities for higher sales and penalize them for efficiency."

If you live in Maryland and would like more information on what you can do to adopt green technology solutions in your house, consult with home inspection contractors today.