My Ten Cents on Saving Money Already Spent with Energy Efficient Imrpovements
"Only buy something that you'd be perfectly happy to hold if the market shut down for ten years." Warren Buffett
"The future depends on what you do today." Mahatma Gandhi
Every morning as I drive into work I listen to Fox Sports radio. Between the debates on Lebron James being better than Michael Jordan I heard a Department of Energy's commercial: "Save Energy. Save Money. Go to energy.gov for more information." So when I got to the office I poured a cup of Joe and surfed the website. I realized at that moment that I found a way that we could feel like Warren Buffet and Mahatma Gandhi at the same time.
There was a way we could do something good that will have an inevitable financial good payback. I found a win-win best case scenario investment. Let's get down to the brass tacks. Hypothetically speaking, you and I have the same exact house. We use it the exact same way -- we turn the lights on at 7 AM and off at 10 PM, we leave the thermostat at 72 degrees all day all year round. The only difference between the two homes is that I decided to purchase the new 11 watt LED lighting on all 70 watt incandescent light bulbs. I also decided to install an additional R-30 atop the existing R-19 that is in your attic right now. The final measure I performed was air sealing -- this was the zipping up of the jacket that exists on my house. This was pitched to me as the most impactful measure of all.
The price tag for the new improvements cost me $4,000. I received $600 in savings a year. You on the other hand paid $600 a year more on your utility bills over the next 15 years. Using the simple payback method which is a conservative estimate - it does not inlcude a raise in price to the electricity rate which is likely. What cost me over the 15 year life of the installed products I spent $5,000 less than you, which is more than double the original investment. Also improved is the comfort in my home since the drafts from the outside are reduced. And the indoor air quality is also improved to boot.
The $4,000 was money I was inevitably going to spend on my energy bills in the future (less than seven years of unnecessary overspending on utility bills). The $4,000 wisely spent saved a lot of money, conserved a lot of energy, and allowed my house to perform to a higher quality than yours.
It doesn’t make sense, and cents, not to invest in energy efficient upgrades on your home or building. It is good economics. It is also being a good steward of the resources you and I are given.
Not all energy efficient upgrades have as good a payback as others. Energy auditors nowadays have the proper knowledge and tools to better
predict the present and future of your energy efficient upgrades. Computer energy models use the weather data of an area and the actual house structure and settings in the home. It is then determined, using the data and scientific diagnostic tools such as the blower door test, just where and how much work is needed to be performed to get the best bang for the building owner's buck.
An energy audit will also take a holistic approach to your building and how it works – health and safety issues can also be diagnosed and addressed. Which can not only save a person from a deadly carbon monoxide poisoning, but also save you from the bottom line keeping you from getting unnecessary hospital bills due to preventable health issues. Save a life and save a hospital bill.
We recently performed a cost-benefit analysis on our office building which is already air sealed and insulated. One of the four outdoor fixtures melted – the metal halide light bulb obviously was too hot for its britches and caused the catastrophic failure. Replacement of this fixture was reviewed by our energy analyst this time and not only was it a safer (LED lights generate less heat) but saved energy and in turned saved money because of the lower wattage use per bulb. The only hurdle to cross was the upfront costs which was the $560 price tag on the LED light and fixture this was $260 more than the metal halide light and fixture. The additional benefit to the higher costing outdoor lighting was a longer life (Metal Halide are 10,000 hours of use to the 25,000 hours of use for LED.) This in turn meant less maintenance on difficult light change out. The total 7 year life at 10 hours a day total cost of the fixtures was the data that tipped the scale – the Metal Halide per light bulb was going to cost $1,400 at about 10 cents per kilowatt hour. The LED light on the other had was going to cost around $700 – half the total cost of the Metal Halide.
Here is the bottom line: When money is spent investing in energy efficiency -money is inevitably saved. This is money that would have been wasteful spending on unnecessary energy use. We can either pay for better performing equipment and materials in our building or home or we can pay higher utility bills. Seems like a no brainer to me? But then again I am biased. I do do this work for a living. I do get paid for it. But if time is money I do spend a lot of my time on diagnosing and recommending energy efficient upgrades to buildings. Spending. I ask myself everyday on my way to work? Am I making a difference? And the answer I believe is yes. Carpe Diem. Carpe Dime! Get an energy efficient upgrade to your building or home! It just makes sense, and cents.