Hope for sound energy policy? Can left and right take the smart path?

One day, political finger-pointing, oneupsmanship, and gridlock might not rule the day.  We posted recently not just about environmentalists, but also the military, veterans, and climate nay-sayers all embracing sound energy policy including energy-efficiency.  And maybe a new report “Pro-Partisan Power”—the result of think tanks on both sides of the political spectrum working working together, the Brookings Institution, Breakthrough Institute and the American Enterprise Institute—is a sign that on this issue, the sides might meet.

While it’s not exactly the way I’d frame it, the report’s author note in their summary,

“Today, few issues in American political life are as polarized as energy policy, with both left and right entrenched in old worldviews that no longer make sense. For the better part of two decades, much of the right has speculated darkly about global warming as a United Nations-inspired conspiracy to destroy American sovereignty, all while passing off chants of “drill, baby, drill” as real energy policy. During the same period much of the left has oscillated incoherently between exhortations that avoiding the end of the world demands shared sacrifice, and contradictory assertions that today’s renewable energy and efficiency technologies can eliminate fossil fuels at no significant cost. All the while, America’s dependence on fossil fuels continues unabated and political gridlock deepens, preventing real progress towards a safer, cleaner, more secure energy system.”

A similar thought is echoed by David Leonhardt who hinted at the report’s release a few days ahead of time (can you echo in advance?  Perhaps if you got to read the report early you can.) in a NY Times column.   As the Leonhardt notes,

“[H]istory shows that government-directed research can work. The Defense Department created the Internet, as part of a project to build a communications system safe from nuclear attack. The military helped make possible radar, microchips and modern aviation, too. The National Institutes of Health spawned the biotechnology industry. All those investments have turned into engines of job creation, even without any new tax on the technologies they replaced.”

Of course, this applies smart investment—and that does mean spending some money at a time when the cry is for both tax cuts and erasing the budget deficit—a nontrivial challenge.  Of course, the McKinsey report showed that this was smart especially when driven by energy-efficiency savings.

But time isn’t on our side.  Our current energy policy is wasteful, it hurts the economy, it hurts the environment, and it leaves us very strategically vulnerable.  Let’s hope the new Congress cares more about doing what is right for the country than cutting down the the other side.  Like it or not, at the end of the day, when it comes to our energy policy, we’re all on the same side, win or lose.

Thanks,
Mike

Investing in Your Home

Wow!  The financial markets are a mess.  My 401(k) has tanked this quarter. The economy is reportedly in dire straits, and Congress hasn’t agreed on a bailout or any other action plan yet.
 
A lot of people are wondering what to do with their money. You have to go somewhere else for financial advice about your portfolio and your retirement plan.  I would like you to think about one arena, though, that still can deliver a big Return on Investment (ROI).  Home energy improvements. Even with recent declines in oil, home energy prices are still quite a bit higher than they were a year ago and forecasted to rise again this winter. Smart investing in your home can deliver returns better than the current bond market and extremely volatile stock market.
 
Here are a few examples to quickly illustrate the potential.

Let’s say you invest $2,700 in attic insulation and air-sealing.  (Remember, never think about insulation without thinking about air-sealing, too.)   And let’s assume that insulation is able to help you save $400 per year off of your gas bill based on last year’s prices.   Your first year ROI is $400 divided by $2,700 or 14.8%.  When natural gas prices rise this winter, you save more and your ROI is even higher.
 
Another example, with a simple calculation tip for your furnace.  If your present furnace is at 70% efficiency (AFUE), and you install a high-efficiency system with an AFUE of 95%, then the projected saving is 25% of the fuel you burn.  Or, said differently you save $25 per $100. If your annual fuel bill is $1,400, then your total annual savings would be about $25 x 14 = $350.  If that new furnace cost $3,850, you’ve got a 9.1% ROI—plus, you won’t be wasting money on service calls to fix your old furnace. Like the earlier example, as energy prices go up, your return goes up.  
 
Now these are just simple examples.  You might want or need a combination of several home energy improvements.  You’d need a comprehensive assessment like GreenHomes offers to determine exactly which improvements make the most sense for you and your home.  And a GreenHomes Advisor can more accurately estimate your savings.  The take away, for you, is that now more than ever, energy-reducing improvements are a smart investment that will deliver consistent returns for years to come.