The ionospheric feedback instability has been invoked as a possible mechanism for the formation of narrow auroral arcs. This instability can excite eigenmodes of both field line resonances and the ionospheric Alfv¿n resonator, producing narrow-scale structures. Although the basic dispersion relation of this instability has been discussed for both of these cases, the energetics of this instability has not been discussed quantitatively and questions remain as to the nonlinear evolution of this instability. The free energy for this instability comes from the reduction of Joule heating due to the preexisting convection caused by the self-consistent changes in ionization and conductivity due to Alfv¿nic perturbations on the ionosphere. In an active ionosphere, narrow-scale Alfv¿n waves can be overreflected; i.e., the reflected wave can have a larger amplitude than the incident wave, with the extra energy coming from a local reduction of Joule heating. Recombination produces a damping of this instability, particularly for high background conductivity, indicating that this instability operates best in a dark background ionosphere. This feedback interaction produces narrow-scale currents when strong gradients in the conductivity are produced, and effects from parallel resistivity or possibly kinetic effects will become important in its evolution. Theoretical constraints on low-spatial resolution observations of the energy dissipated by precipitation as opposed to Joule heating will be discussed.