Rebate as an economic instrument for promoting building energy efficiency in Hong Kong

Economic principles have been applied to elicit the conditions under which there will be benefit to power companies in offering rebates to consumers to encourage them to adopt energy saving measures. The analysis also provides an answer to how rebate rate should be determined to maximise social benefit. However, the analysis of the rebate-based demand side management (DSM) programmes launched by the two power companies in Hong Kong in the year 2000 showed that the prerequisite conditions that would permit the power companies to derive benefits from the programmes were unlikely to exist. This suggests that use of this economic instrument for promoting energy efficiency requires governmental influence; it will not emerge solely as a commercial decision of the power companies in Hong Kong.