The utility companies have discovered that energy conservation pays back large dividends.
In 1990 alone, PGandE earned $15 million by saving 280 million kWh of electricity. As an added bonus this energy saving also eliminated the production of 200,000 lbs. of CO2 (the most prevalent greenhouse gas) from the atmosphere. Efficiency between 1973-1986 represented an annual energy source two fifths larger than the entire domestic oil industry.
According to Amory Lovins, "The best technologies on the market today can save about three-quarters of all electricity now used in the United States, while providing unchanged or improved services. The cost of that quadrupled efficiency is about 0.06 cents kWh, far cheaper than just running a coal or nuclear plant (let alone building it). Thus the global warming, acid rain, and other side-effects of that power plant can be abated, not at an extra cost but at a profit: it's cheaper to save fuel than to burn it."
This idea of making a profit by reducing energy consumption and helping the environment at the same time, sounds too good to be true. But, anyone who can afford $10 can buy in the efficiency market. In today's money or stock market a 15% annual return on investment (ARI) is practically unheard of. In fact, any wise investor would jump at the chance to earn 15% ARI.
The fact that you can receive no higher guaranteed return on your money from any other investment is a great reason to purchase energy efficient products. Socially responsible investors now can reap benefits not only for themselves, but also for our economy and environment.
One 18 watt compact florescent light (CFL) will last 10,000 hours, replacing ten 75 watt incandescent bulbs. Over the life of the CFL, this translates into a $45.60 savings on your electric bill. The math works like this: 75w (incandescent bulb) minus 18w (CFL) equals 57w (savings) times 10,000 hours equals 570kWh times .08 cents (national average per kWh) equals, $45.60. Ten incandescent bulbs cost approx. $7.50. Add the electrical savings to the cost of the bulbs and your total is a $53.10 return on the $15 you invested in the 18w CFL. That is a 350% return on your investment over the life of the bulb. If an 18w CFL is used 24 hrs./day (security light) it equals a 330% Annual Return on Investment! If it is used 8 hrs./day (typical office use) that's a 110% ARI. At 5 hrs/day (average home) you get a 63% ARI. Right now the City of Ukiah is giving a rebate of $10 a bulb, up to ten bulbs. The bonus environmental return: One CFL, over its life, will keep over 800 lbs. of carbon dioxide and 12 lbs. of sulfur oxides out of the air.
Water Conservation devices have the highest ARI of all conservation and efficiency products.
A $12 low-flow showerhead reduces water consumption in the range of 2.5 gallons per minute (gpm) to as low as 1.5 gpm. It can save an average family of four up to $250 per year, by cutting hot and cold water use as much as 70%. At just half this amount we have an incredible 1000% annual return on investment! This savings is so great because of the reduction in energy used to heat water.
When people think of water conservation they don't often consider that it reduces energy bills along with water consumption. According to the Dept. of Energy, heating water is "the second largest residential energy user." Faucet aerators can save up to 60% of water usage. Typical reductions are to 1.5 gpm in the bath and 2.5 gpm in the kitchen.
Ultra low-flush toilets and after market low-flush devices can save up to 75%. For example, by installing two toilet dams or another low-flush conversion device you can save 2 to 3 gallons per flush. The average household can save 12,000 gallons a year. If 10,000 homes installed toilet dams 120 million gallons a year of pure drinking water wouldn't be flushed away.
The average family of four can save 30,000 gallons of water per year by installing one low-flow showerhead, two faucet aerators and a set of toilet dams.
A solar domestic water heating system will cost about $1600, installed. It is estimated that the average home with a 40 gallon electric water heater spends about $30 a month to heat water. The solar water heater in this example will provide at least 50% of your hot water needs and save you about $15 a month. This is a six year pay-back or 16% ARI. If you are able to do the installation yourself you can save an additional $400, which brings the pay-back down to 3.9 years and increases your annual return on investment to 26%. No matter who installs it, you should save about $180 a year. City of Ukiah residents, with electric water heaters, can receive a rebate of $500 for installing a solar water heater.
Radiant Barrier products use thin aluminum films to reflect radiant heat. Installed on the underside of roof rafters a radiant barrier reflects 97% of all radiant heat out of your home in the summer. This will reduce the typical Air Conditioning bill by 20%. Depending on roof shading, solar gain, and whole house insulation (at .22 cents a sq. ft.) radiant barriers have an annual return on investment of between 20% and 50%.
Low emissivity (Low-E) window films reflect at least 55% of the heat striking the window (outside, summer - inside, winter) and over 90% of the ultra violet radiation. Low-E films also reduce glare by 60%. At a cost of about .75 cents a sq.ft. the pay-back for the average home (1,600 to 2,000 sq. ft.) is 12 to 18 months. Even at the two year pay-back the annual return on your investment is 50%. Low-E window films are a fraction of the cost of "Factory High Tech" Low-E windows, which have a pay-back of 38 years. Life of the film is about 15 years, and you get shatter resistant glass out of the deal.
If you are feeling frustrated with low returns on your investments, make your money work for you. Energy efficient products make excellent economic and environmental sense.
Copyright Mendocino Environmental Center 2004
Permission granted to excerpt or use this article if source is cited