Mexico's Subsidized Energy-Efficiency Program Backfires Christopher Shea - WSJ.com
go to original May 13, 2012

In 2009, Mexico began a program intended to reduce national energy consumption by subsidizing the purchase of efficient new refrigerators and air-conditioners. To qualify for the program, households had to show they were using an inefficient appliance at least a decade old, and it had to be destroyed after the new model was acquired. (Think of it as a “Cash for Clunkers” for appliances.)

But a new study finds that the program has been much less effective than predicted, because the people who designed the program failed to take into account how people’s behavior would change after they bought a new appliance. Households that replaced a refrigerator reduced their energy consumption by about 7%, the study finds — about one-fourth the savings anticipated by the World Bank.

One issue is that new refrigerators are more efficient but also larger, and they have energy-intensive features like side-by-side doors and “through-the-door ice and water,” which, if used often, offset some of the machines’ baseline efficiency. (The program included rules on how much larger the new refrigerator could be than the old one, but they may not have been well enforced.)

“Even larger decreases were predicted for air conditioners,” famous energy hogs, the study’s author’s write, "but we find that households who replace their air-conditioners actually end up increasing their electricity consumption."

Architects of the program — and people who analyzed it — apparently failed to consider that people were well aware of how expensive it was to run their ancient, loud air conditioners, and so carefully rationed use. Once they had quiet and efficient new models, they ran them all summer.

In short, there were surely less expensive ways to reduce electricity consumption than subsidizing new appliances, the researchers conclude.

Source: “Cash for Coolers,” Lucas W. Davis, Alan Fuchs and Paul J. Gertler, NBER Working Paper Series (May)

We invite you to add your charity or supporting organizations' news stories and coming events to PVAngels so we can share them with the world. Do it now!