Why drag your feet on efficiency investments?

Invest in the safest investment!

This post is short and sweet, but is an intro into something I've explored in the past and I am continuing to explore: Why do people drag their feet when it comes to investments in energy efficiency? My day job revolves around selling energy efficiency projects to commercial and industrial users, and many times the projects are delayed for no good reason..even when they are cash flow positive if financed! Can you name many investments that are almost zero risk that are cash flow positive from day one that investors drag their feet on?

To make it easy for you, I wrote a quick calculator to compare home energy efficiency investments vs. investing in the stock market.

I love this quote from a paper written for a publication of NEMA and featured on Energy Star, "Energy Efficiency is a Good Business Decision, Especially Now!":

In the end, a decision not to install more efficient energy equipment and implement related energy-saving measures is a decision to continue paying higher utility bills

So why do you think many people drag their feet on energy efficient investments? I know the main reason is just pure ignorance and how complicated some energy systems are, but what are others?

Tags:

energy efficiency investments

Comments

Anonymous (not verified) Wed, 06/29/2011 - 15:40

Yep I think some of it is the "well what did I get for my money?" idea. People will drop $10k on a new kitchen, but $10k is "way too expensive!" for solar panels. We want stuff before we want financial return, I guess. A friend is in Toronto, and I think their mini-fit program really does pay for itself from day one, with good financing rates. And yet he hasn't moved on that, either. How many financed improvements are really cash-flow positive from day one though? Honestly most of my upgrades would not have been - well, ok, I haven't financed them, but I doubt that for example my insulation upgrades would have made payments on a $3000 loan.

Anonymous (not verified) Thu, 06/30/2011 - 13:58

YES! if i could SEE it, it would have an impact. Imagine if everyone had delivered to their door; their share of mercury, CO2, particulate matter, spent uranium, and asthma inhalers. Then, after i make improvements, amazon delivers the number of tuna sandwiches my kid didn't get to eat based on how much mercury i saved today. "food comes from the supermarket, power comes from the switch on the wall". Making connections leads to greater awareness, and that is everything. Oh, it it save money too? Cool - I'll take a dozen!

Anonymous (not verified) Thu, 06/30/2011 - 00:43

I wouldn't say zero risk. I know of many "guaranteed" savings projects that failed to live up to their hype. Ignorance and short term thinking are up there, too.

ckmapawatt Thu, 06/30/2011 - 13:46

You are right, nothing has zero risk, including the bank or any form of investment. But changing to more efficient bulbs is as close to zero as you get.

Anonymous (not verified) Wed, 06/29/2011 - 11:37

energy is still relatively cheap. Cheap enough that we don't consider home improvements 'investments' unless they increase the resale value of the house. Resale is something concrete - it has a 'now' feeling to it. Investment is something we do for the distant, unknowable, vague future. Home improvement decision are often not cold calculations, but more emotional decisions rationalized in either 'feel good' or 'increased resale value' So, efficiency improvements might be better received if defined as comfort, health, safety, feel-good improvements. Hard to do for us energy wonks.

ckmapawatt Thu, 06/30/2011 - 13:48

Maybe if everyone lived next to a coal plant like me and was able to see the pollution coming out of the stack going into the air they breathe! Well, probably not even then....

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