It's All About Economics
In my undergrad economics class I learned about the supply and demand curve. It’s pretty simple really, the supply and demand will balance where the profits are the highest and the profits are highest where the marginal price of a product is equal to the marginal cost of the product. What this really means is when demand increases above the supply, the price will increase and the supply will increase until matches the demand. It works the other way to. If supply increases the price will drop until the demand increases until it matches the supply.
Competition (also part of economics) dictates a switch from one product to an equivalent or similar product. When the price of a new product drops, more demand is created for the new product and suppliers shift production to creating the new product, reducing the supply of the old product and increasing its price.
Values Count
It is important to remember that Price and cost are not always money, it could be specific needs or time or beliefs or standards or law or compassion or any other value that an individual holds dear. Early adopters of new technology base their decision (which is, by definition, a rational decision) to purchase when the value exceeds the price.
It is economics that will create more renewable energy supply in the marketplace. Artificial stimulants are a way to increase demand and supply and move the product to the mainstream. We seek tax incentives to directly affect the price, enforce regulations to increase the supply and educate consumers to increase demand by changing needs or beliefs or any other non-monetary factor.
Competition Works
Competition is also very important, when demand begins to increase and supply begins to follow, suppliers will advance the technology to reduce the cost and increase the demand and eventually everybody agrees that the value exceeds the price and wants one. You have seen it hundreds of times. IPODs, cell phones, personal computers, etc…
More Is Better
We need more demand for Renewable energy sources in the marketplace. The right things are happening and will continue to happen to incubate the renewable energy market. Individuals (early adopters) are buying renewable energy at a premium price from their utilities, this is causing utilities to increase the supply and advance the technology. Demand increases, supply increases, technology increases, price will drop.
In order to get more renewable energy sources built and running and to make them economically viable we need to increase the demand. Renewable Energy Certificates (RECs) give us a great opportunity to affect the demand and increase the supply. RECs are valuable to suppliers because they allow the marginal price to approach the marginal cost for the energy. Your decision must be rational, if you buy RECs it will be because the value is greater than the price you pay.
One Way To Increase Demand
BuyforEarth.com offers you an opportunity to buy RECs, increase the demand and move renewable energy toward the mainstream. We can’t do this by increasing the value or changing your beliefs. We do this by reducing the price you pay for renewable energy -- Your price is $0.00.
If you shop at BuyforEarth.com, you create a cash flow from the commissions earned. We allocate 95% of the commissions you earn for the purchase of Renewable Energy (buy RECs). You can even choose the types of renewable you support. When you ‘buy’ RECs through BuyforEarth.com you create more demand for Renewable Energy.
When you create more demand for Renewable Energy, you are advancing Energy Independence.
Saturday, August 2, 2008
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