Part of the intent of this blog is to lay out the process we are muddling through to take this house off of fossil fuels and towards low carbon energy sources. At some point in every workshop or seminar I teach, whether it's on Zero Net Energy Homes, or Deep Energy Retrofits, or Passive House principles, someone stands up and makes an impassioned speech about how all this is well and good but what's the payback?
I'd like to get this one out of the way up front. In the make-over of this house, I, who have never been known as one loose with a buck, am spending what is mostly my own money (with the exception of various incentives and tax credits, and let's do discuss them, but not right now). So I don't expect to spend it foolishly or without due consideration. However, here are my responses to the payback question, in order of how much I think they matter in the whole cosmic scheme of things:
1 - The quickest response I have is, if you predict the future price of energy over the lifespan of these improvements, I'll tell you the payback. My habit when pushed to actually do some financial analysis is to present it in the form of scenario planning - I'll often select three rates of energy inflation and do the calcs showing the Net Present Value of the investment in each inflation scenario. The longer you project it out, the more dramatic are the differences. The usual result of this exercise is that those who are the decision makers begin to act from a position of risk avoidance, because the highest inflation rates in fuel costs get scary.
2 - The second response is to poll the building and design professionals assembled to see how many in the past year or two had a (residential) project in which they installed a 10 kW automatic generator, or they did a kitchen that cost over $100,000. Usually most of the hands in the room slowly go up. How rigorous was the payback analysis on each of those purchases? My observation is that people spend money on what makes them feel good, and just because what makes me feels good (and fortunately, many of my clients through the years) is seeing my ecological footprint shrink. Why does that expenditure draw so much more scrutiny than the money spent on the magazine kitchen or the BMW?
3 - The serious response is that the situation with the climate is likely already past dire and to have a tolerable planet (hat tip to Hank Thoreau here) we need to cut carbon emissions by a factor of 5 to 10, so payback is irrelevant, but least cost strategies are very important. However, least cost strategies are best implemented at larger scales (let's fix the worst houses that the most people live in first, maybe) but these need political agreement, and that's hard to come by in the country blessed with the best government money can buy. Each of us can choose (without convening the US Senate) to make changes in our own house and behavior (well, now I live in cohousing, it's not quite that simple, as you'll learn) so that's where we act.
Besides - if you're not selling drugs (as the former chief probation officer of the state of MA apparently was) how great is the return on your investments otherwise? I'd rather have my dollars on the roof making kWh than playing the slots in the Goldman Sachs-supercomputer rigged casino called the stock market.
Are we done with payback and can we move on to more interesting things?