15 September 2009

Featured in local story, and missing the point on "payback"

Jeremy Arias from The Gazette interviewed me, my friend Doug Horgan, and a couple other locals for an article about costs of going green. (Experts: Going green doesn't have to put you in the red, 09.09.09) There's a lot to cover on a topic like this and I think he did a nice job for a short piece, and got most of my quotes and sentiments right on. I enjoyed more of the things that came up in our interview, than what made it into the article.

He mentioned the $7000 (25%) in incentives I got in 2007 for our solar panels and about 15-20 year payback I expect. If I did the same project today combining federal, state (MD) and Montgomery County local incentives, I would get about 80% in incentives and have a payback of 5-10 years. See my recent Voice column (Apr 2009) which summarizes this (note: both MD and Montgomery County have refunded their programs as of June/July).

More on "payback":
While it's true when looking to develop a priorities list for home improvements, it makes a lot of sense to do the quickest payback items first, it's actually a bit of a red herring that you should only do things which have certain financial "paybacks".

First of all, when was the last time someone told you the payback time for their new car, iPod or iPhone? There's a lot of things in life we pay for that have less tangible benefits... yet still add to our quality of life... or protect our environment!

Second, when speaking of the environment, there's a certain urgency with the threats of global warming that trying to find out the payback time for a stable climate and dependable sources of energy, food and water tends to become irrelevant. Sure, we'd rather not saddle our child(ren) with 100s of year of debts, but if they avoid killing each other over access to clean water, it's probably worth it.

Renovation vs Improvement
One thing that got lost in the article was the distinction between "doing a green renovation" and "doing green home improvements". In the first case, it's assumed you're changing things about your house (removing walls, redoing rooms, adding space) because you want it to work better for you. When you do this, it's best to go green in as many ways that make sense for your budget and priorities. But the only way that type of renovation is going to "pay for itself" is if/when you sell your house, presuming you did something that really added to resale value. The fact that you laid out thousands of dollars to change your space is more a quality of life investment... at least in the near term.

In the second case of "doing green home improvements", you would choose to do things like energy efficiency improvements which SPECIFICALLY can be designed to save your money and pay for themselves over a time period. If you document your improvements (through certifications and/or utility bills) you can also make these selling points if/when you decide to sell. (hint: doing window replacements is usually something to do just before a sale, not as a way to save money while you're living there.)

If you are looking for a starting point on what improvements to do first which can save you money quickly see my Green Home Mantras article (March 2009). And if/when you tackle a renovation/addition project, seek out some cost-effective, and maybe not so cost-effective, ways to go green for their tangible and less tangible "hidden benefits".