Yesterday, I read about a rather clever idea. Right now, individual homeowners (or renters) make the decisions about what kind of heating, lighting, and insulation to use. Utility firms simply sell them electricity, oil, and gas in order to meet their demands. As such, the firms have no incentive to help people conserve and, despite possible financial incentives to be more efficient, few homeowners will do so. The latter problem is clearly more acute with renters.
The alternative presented is for utility firms to sell a package of lighting and heating services instead. Then, they would have an incentive to cut power consumption and upgrade to more efficient infrastructure. They would also benefit from being able to do so at a much larger scale than individual consumers. Apparently, firms are already doing this in Woking and London.
Given how incredibly wasteful homes are when it comes to energy usage, especially in the UK, this seems like a smart way to changing incentives. Households in the UK use 25% of the total electricity generated, and produce an equivalent amount of CO2. 60% of that energy is used for heating, often in houses that are poorly insulated and were never designed to be kept at today’s room temperatures throughout.