This paper studies the effect of electricity prices on state commitment to energy efficiency in the USA. Using panel data we find that electricity prices have a significant positive effect on state energy efficiency expenditures. Moreover, we find that this effect is particularly pronounced beyond a certain threshold level of prices. The rationale for these findings is that higher prices increase the costeffectiveness of energy efficiency programs. These findings have important implications for state expenditures on energy efficiency if electricity prices rise in response to carbon and other stringent environmental regulations.

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Every nation is facing a big challenge in meeting the ever increasing demand of clean electrical energy. This problem is even more severe in the developing nations like India and China. Ever increasing demand and the environmental concerns are forcing them to make their fossil fueled energy systems more efficient, reduce emissions and conserve conventional fuels by making extensive use of renewable energy resources. All these concerns necessarily require that the existing power grid should be extensively modernized with the application of advanced technologies including information and communication technologies, modern measuring devices like phasor measurement units, fast computational techniques etc. so as to reduce energy loss, conserve resources and increase quality of power supply. The modernized grid should allow generating companies to feed clean energy from renewable sources for sustainability. The grid should also be able to accommodate distributed generation in distribution networks. This work is an attempt to investigate new developments needed for sustainable generation and utilization of electrical energy with controlled emissions in Indian scenario.