How is it that renewable energy ended up on the opposite side of the fence to the almighty buck?

When we talk about a high efficiency condensing furnace or hybrid car, we are immediately asked a) what is the incremental cost over a cheaper option and b) how much will I save per year. We take “how much it costs”  divided by “how much we save” and get simple payback. I stress simple. If it’s 5 years, its good business and we jump on it, if its 15, we walk. When is the last time you heard someone ask what the payback was on their hummer, granite counter top or vacation? We don’t ask because we know they will never payback, and we accept that because we like them. How about recycling, education or healthcare.  They are exempt from the payback question because we feel a social responsibility. So why has reducing our energy consumption and impact on the planet fallen into the same bucket as building a big box store or buying a mutual fund?

Here are a few reason’s why simple payback for renewable energy is short sighted;

1) Escalating energy cost. It would be great if gas was always going to be a buck a liter or electricity 0.08$/kWh. But it won’t. Not even within our…payback period. We have seen periodic price spikes in energy cost more than 10 times the inflation rate and the price of natural gas in BC double between 2002-2007.

2) No concern for REAL environmental cost. Its impossible to put a price on the environment, but we don’t even try. The extra electricity we consume and fossil fuels we burn, while good alternatives are out there, is just digging a bigger hole for future generations. A very real environmental and financial tab that someone has to belly up to. So because we don’t have to pay now, we don’t consider it part of the cost and therefore not part of the payback calculation.

3) Increased value. Lest we forget that the capital investment and reduced operating cost often “payback” at resale!

4) What about after the payback period? So even if it does take 15 years, isn’t the promise of reduced energy bills and cleaner living worth something?

There are a lot of things that don’t fit in a formula, we need to revamp our evaluation process and take a look at the bigger picture. That’s my 2 cents…