Friday, January 14, 2011

Hybrid Cars Are Uneconomical Under Electric Pricing Policies To Reduce Greenhouse Gases

From "Electricity pricing policies may make or break plug-in hybrid buys" on ScienceBlog:
California policies aimed at reducing electricity use and curbing greenhouse gas emissions have the unintended consequence of making new plug-in hybrid vehicles uneconomical, according to a Purdue University economist.
In tiered systems, consumers pay a higher rate for electricity they use beyond a certain amount. California has three rate tiers. It also has a time-of-use system, which reduces the rate during periods of low demand. In addition, Californians pay some of the highest electricity rates – an average of 14.42 cents per kilowatt hour, which is about 35 percent higher than the national average.

“The objective of a tiered pricing system is to discourage consumption. It’s meant to get you to think about turning off your lights and conserving electricity. In California, the unintended consequence is that plug-in hybrid cars won’t be economical under this system,” said Tyner, whose findings were published in the early online version of the journal Energy Policy. “Almost everyone in California reaches the third pricing tier each month. If they add a plug-in hybrid, they are charged the highest rate.”
Read the complete article here.

See my previous related post "Proxy Problem Of Carbon Based Pricing And Global Warming."

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