Residential energy efficiency improvements twice the cost of benefits

by
in environment on (#HVRJ)
Energy efficiency investments are widely popular because they are believed to deliver a double win: saving consumers money by reducing the amount of energy they use, while cutting climate-forcing greenhouse gas emissions and other pollutants harmful to human health. But a new study by a team of economists finds residential energy efficiency investments may not deliver on all that they promise. Through a randomized controlled trial of more than 30,000 households in Michigan - where one-quarter of the households were encouraged to make residential energy efficiency investments and received assistance - the economists find that the costs to deploy the efficiency upgrades were about double the energy savings.

While the researchers found that the upgrades did reduce the households' energy consumption by about 10 to 20 percent each month that only translated into $2,400 in savings over the lifetime of the upgrades - half of what was originally spent to make the upgrades, and less than half of projected energy savings. "In actuality, the energy efficiency investments we evaluated delivered significantly lower savings than the models predict." Further, some say that the broader societal benefits - savings as a result of reductions in pollution from energy production- justify the investments. But the findings did not support this. The cost per ton of CO2 avoided in the sample amounted to $329, significantly larger than the $38 per ton that the federal government estimates as the social cost of carbon.
Reply 8 comments

What about if the cost is free? (Score: 1)

by fishybell@pipedot.org on 2015-08-19 22:54 (#HWVX)

I remember someone coming by my house and doing energy savings fixes (seal holes, add attic insulation, etc.) to my house for free. There was some government program (I don't remember if it was state or federal, but I'm fairly sure federal) that paid the contractor directly for each house finished.

My limited economic knowledge says if the government says "we'll pay up to X of the cost," then that's the exact number contractors will charge. The free-ness of the project is felt by the same person who reaps the benefits (lower monthly bills), and so I'm not sure I'm against this at all. While it is, as far as the article is concerned, wasteful, it's only wasting money and the energy needed to do the upgrade, which I'm sure is offset by the energy saved. If it only costs the state and federal governments money (by which I mean, if it only costs everyone a small amount of money) to help against climate change, then I'm all for it. If there is graft or gouging going on (which if there's a government contract, there almost definitely is), then I'm also for fixing that. These two choices are not mutually exclusive.

Re: What about if the cost is free? (Score: 1)

by evilviper@pipedot.org on 2015-08-20 19:35 (#HZWN)

The study is saying the government should stop paying for such programs.
it's only wasting money and the energy needed to do the upgrade, which I'm sure is offset by the energy saved.
The study says otherwise, claiming only half the invested money is returned in energy savings.

Re: What about if the cost is free? (Score: 2, Insightful)

by billshooterofbul@pipedot.org on 2015-08-21 14:56 (#J2D6)

He's not talking about money, but energy. Probably meaning the amount of C02 given off by the expense of the energy. The study was focused on cost, which is a good thing to keep an eye on for sure. But if anther goal is C02 reduction, then for some people with enough disposable income and that care enough about such things then the amount of C02 released is also important potentially more so.

I can't tell you how freaking annoying it is to get an appliance installed and have to fight for a more efficient device, even if its at higher cost. I was debating getting a new water heater, and the installer told me to do it now while they still sold the old cheaper less efficient models, in a few months they'd only sell the high efficiency ones. He was kind of shocked when I told him to call me when they had the high efficiency ones. I probably won't save the amount of extra money it costs, but its not a significant amount of money to me at this point and its the right thing to do.

Re: What about if the cost is free? (Score: 1)

by evilviper@pipedot.org on 2015-08-21 18:32 (#J324)

He's not talking about money, but energy.
Money is often a good proxy for energy used. It's not as if home insulation is produced with zero CO2 footprint. Contractors driving to your home burn plenty of fuel. etc.
But if anther goal is C02 reduction, then for some people with enough disposable income and that care enough about such things then the amount of C02 released is also important potentially more so.
Except the cost of the carbon is ~1/8th the cost of the retrofit, so other methods of eliminating CO2 with that money could be vastly more effective.

Also, either you're overly concerned with diatomic carbon, or else someone has covertly swapped your O (oh) key with your 0 (zero) key. However, I do give you full credit for consistency...
I told him to call me when they had the high efficiency ones. I probably won't save the amount of extra money it costs
You might be lucky and break-even... Sometimes appliances last far longer than projected, and energy prices have been known to suddenly and unexpectedly spike.

Re: What about if the cost is free? (Score: 1)

by billshooterofbul@pipedot.org on 2015-08-21 20:26 (#J3AZ)

No, money is often not a good proxy for energy used. Energy is a single cost input into the overall cost of a product or service. Things like labor, materials and IP rights are also major impacts in cost for items.

My mind is apparently fried, CO2 or C02 sometimes the eyes at the tips of my fingers get drowsy and start hitting the wrong keys. I'll soak them in my visine coffee and they should be good to go.

Re: What about if the cost is free? (Score: 1)

by evilviper@pipedot.org on 2015-08-21 20:42 (#J3C5)

Things like labor, materials and IP rights are also major impacts in cost for items.
I've concede IP rights, but that's a corner case, not too significant in this area. Labor and materials both emit waste, and the amount of money you spend on them strictly limits just how much waste they can generate.

I don't claim it always matches up perfectly, but it's still usually a pretty good proxy.

Re: What about if the cost is free? (Score: 1)

by billshooterofbul@pipedot.org on 2015-08-21 22:04 (#J3JD)

I'm thinking of things like platinum catalysts and rare earth metals that might be used. Yes they require some labor, but they cost more because of the exotic materials they contain rather than it being a function of the difficulty of refining them. I'm having trouble correlating cost of labor with energy most of the time for installs of things like water heaters, solar arrays, better windows. The labor mostly goes to the workmen with a much smaller amount for any transportation costs.

There might be some specific instances where the material and labor that goes into a product is a direct function of the cost of energy. These would be things who's price would fluctuate at nearly the global oil price. As such, I can't think of many like that. Track the global energy price and the price for the item itself and see if there is any correlation at all. I'd be really shocked if you could find any.

Re: What about if the cost is free? (Score: 1)

by evilviper@pipedot.org on 2015-08-22 01:07 (#J3WG)

they cost more because of the exotic materials they contain rather than it being a function of the difficulty of refining them.
You don't pay the platinum an extra fee for its star power... You pay the mining operation, because they have to move tons and tons of ore to get sufficient quantities of platinum, then refining operation because it takes a lot of chemicals, electrical and mechanical processes to separate it out. There will be some with operating costs lower than the current spot price of platinum, but many that are barely breaking-even.
The labor mostly goes to the workmen with a much smaller amount for any transportation costs.
The workmen aren't taking your money and putting it in a sofa, they're spending it on many things which have a big carbon footprint of their own. And if you could get it done with half the labor, for half the price, you'd be encouraging only half the footprint.
These would be things who's price would fluctuate at nearly the global oil price.
Oil is only for mobile energy usage like transportation. You aren't saving any oil by insulating your home or buying more-efficient appliances.

And it's not at all true that commodities will fluctuate with global prices at all. In fact energy prices are often very, very localized. See: Alcoa plants in Iceland.

Anyhow, I've made the case as clearly as I can. You're free to disbelieve it if you choose.