How to Make Your Business Greener–as in More Profitable

While we usually focus on homes here, a couple of business articles in the NYTimes on Thursday took me back to a post from a couple of years on Amory Lovins and his common sense approach to saving energy.  The whole post is worth revisting, but I’ll sum up with one quote from Amory:

It doesn’t matter what the climate science says, or even whether it’s right, because we ought to be purchasing energy efficiency anyway just to save money.

 

It’s just good business to cut costs by adopting energy-saving actions for lighting, equipment, heating, air conditioning, transportation and water use.  And energy-efficiency can offer an excellent ROI.  Check out the two articles:

• How to Make Your Business Greener (and Save Money)
• Convincing Even the Skeptics to Go Green

Thanks,
Mike

What’s Greener: A Prius or a Home Energy Retrofit?

Thinking about purchasing a Prius to reduce your environmental impact?

You may want to consider all of your choices before stepping into a shiny new hybrid because in many cases, investing in a home energy retrofit may have a bigger impact on your carbon footprint and a faster return on your investment than purchasing a Prius.

The Prius vs. A Home Energy Retrofit

So, how does buying a Prius compare with improving your home’s energy efficiency in terms of reducing your carbon footprint and seeing a return on your investment? While these the answers to this question will vary depending on the driver and the driver’s home, our team did some research and found that what might shrink your neighbor’s carbon footprint might not be as cost effective for you.

We’ve crunched a bunch of numbers in hopes of getting people thinking about energy efficiency from a new perspective. The points made here are not meant to convince you that you shouldn’t buy a Prius. We’re using the Prius as a symbol of a more fuel-efficient way to get around; we could have done the same calculations with any fuel-efficient car.

Let’s do a little example to illustrate.

Meet Rebecca — An average driver with a home built in the ’90s. Rebecca drives 12,000 miles per year in a car that gets an average of 23 mpg, and she lives in a house built in 1992.

Buying a Prius:

Rebecca would double her fuel efficiency to 46 mph by purchasing a new Prius. As long as she continues to drive 12,000 miles per year with gas costing $3 a gallon, Rebecca will:

• Use 267 fewer gallons of gasoline per year
• Reduce her annual carbon footprint by 1,530 pounds
• Save $800 in fuel every year
• See an annual 3.2 percent return on her $25,000 investment

From a carbon footprint perspective, the manufacturing of a new Prius is an energy intensive process – the equivalent of consuming 1000 gallons of gasoline. So, Rebecca will spend the first four years with her new Prius paying off the “carbon debt” associated with making the Prius.

Cost-Benefit of a New Prius for Rebecca: $25,000 invested, 3.2% ROI. Assuming she keeps her car for 7 years, her average annual carbon savings will be 655 lbs per year.

Making Home Energy Upgrade: In a 1990’s era home, comfort and indoor air quality issues are common, and duct sealing is typically the single greatest opportunity for energy savings, followed by air sealing and improvements in the ventilation system. In a house of this era, it is reasonable to expect a savings of 10 – 30 percent in energy efficiency from a $3,000 investment.

Let’s say Rebecca consumes 12,000 kilowatt-hours (average residential consumption) of electricity per year in her home, and purchases her electricity at 10 cents per kWh (the national average). If she improves her home’s efficiency by 20 percent, she will:

• Save 2,400 kWh of electricity per year
• Lower her annual utility bills by $240
• See an 8 percent return on her $3,000 investment
• Reduce her carbon footprint by 1,360 pounds (with coal as primary fuel source)

Cost-Benefit of an Energy Retrofit for Rebecca: $3,000 invested, 8% ROI, annual carbon savings 1,360 lbs.

P.S. — Rebecca might be able to save a big chunk of the initial investment if she took advantage of all the tax credits and other incentives for retrofitting her home.

Which is the Greener choice?

In this example, an audit and retrofit of her house will provide Rebecca — an average mileage driver in average mileage vehicle living in a newer house — with a greater return on her investment and nearly twice the reduction in her carbon footprint as buying a Prius, for one-eight of the cost.

Of course, we left out a lot of detailed factors on both sides in an attempt to simplify the numbers. But if you think we missed something important, or you’re in Toyota’s marketing department and you want to argue with us, contact us and share your thoughts.

What is the greener choice for you?

Whether you’re better off retrofitting or buying a Prius depends on your unique set of factors: what era house you live in, how much you drive, your current vehicle’s mpg, etc. However, there are tremendous opportunities to reduce your carbon footprint and fuel costs, both at home and on the road. And, while choosing a more fuel efficient vehicle is an obvious step towards reducing your carbon footprint, investing in a more comfortable and energy efficient home can often provide an equal, if not greater, reduction in your carbon emissions — and, in many cases – at a fraction of the cost!

Scott Case is the VP of Product Management for EnergySavvy.com, a company dedicated to making energy efficiency easy and accessible for homeowners throughout the U.S. through tools and resources such as an online energy audit and a directory of energy tax credits and rebates.

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.