Saturn Home Energy Saving Blog
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Information and Opinion about Home Energy for Buildings
Welcome to the Saturn Home Energy Saving Blog. We hope you find our posts useful and entertaining. Our goal is to mix valuable energy saving information with our opinions. We value your opinions too, so please please comment! These are some of the main topics for this blog.
- Energy auditing and energy retrofit.
- Heating, cooling and ventilation.
- Home Insulation and air-sealing.
- Energy policy and energy programs.
- Energy training and certification.
- Technical communication.
We have more specific and less opinionated energy-saving information in our Energy Saving Tips.
Latest Blog Posts
The Good News for Energy Conservation[caption id="attachment_5064" align="alignright" width="300"] The European Central Bank stood economic theory on its head recently by setting a negative interest rate for its large depositors.[/caption] The time value of money has always worked against energy conservation. Traditionally a dollar today is worth more than a dollar in the future by a certain percent, known as the interest rate. The European Central Bank (ECB) declared this week that, for the present, this pillar of the worldwide financial world no longer holds. The ECB announced that they were instituting a negative interest rate, so in effect, money currently deposited in their bank is worth less than future deposits. I googled interest rate, deflation, and several other relevant terms and read a few times that an interest rate couldn't be negative. Surprise! European big depositors will now pay the ECB 0.1%/year for the service of storing their money. The growth rate and inflation rate in Europe is near zero. The Federal Reserve's key short-term interest rate has been as low as the 0.0% to positive 0.25% with their Zero-Interest-Rate Policy (ZIRP), which like most other economic theory, assumes that zero percent is the bottom limit. The ECB has proven that zero isn't the bottom limit and that's a radical development and a boon to all waste-reduction technologies including energy conservation.
How a Negative Interest Rate Favors Energy ConservationSo what does the ZIRP have to do with the energy-conservation industry? We're selling future savings in return for an initial energy investment today. If we have to discount the future savings by a substantial positive interest rate, the savings become progressively less the farther in the future we go so the conservation investment appears less attractive than at a lower interest rate. In the U.S and Europe these days the interest rates for ultra safe investments like bank savings hover around zero. It's good news that money today is worth no more than money in the future. In the case of the ECB, an amount of money today is worth less than the same amount of future money.
Energy Conservation & Waste Reduction: The Best and Safest Investments[caption id="attachment_5065" align="alignright" width="275"] The ZIRP of the Federal Reserve and the ECB challenges the time value of money, a near universal assumption that money in the future is worth less than the same money today.[/caption] Low economic growth, low inflation, and low interest rates promote investments in waste reduction, or they should if anyone is paying attention. Energy conservation specialists often disregard energy conservation measures (ECMs) that have a 20 year payback. Hello, a 20-year payback is 5% return on investment! Find another safe investment that offers 5% annually. The passbook-savings interest rate has been less than half a percent for quite a while. 5% is spectacular. Many people and corporations have piles of money idling at >0.5% interest rates. If we energy specialists can provide the risk management for large investments, we ought to be able to sell more product with these new positive developments. By risk management, I mean assuring that the energy savings will indeed occur in the future. With large investments in energy conservation and other waste reduction technologies, we can create a more sustainable economy and reduce some of the effects of climate change. Let's use the interest-rate angle to sell more conservation.
The Act and Its Downfall[caption id="attachment_5052" align="alignright" width="300"] The coal industry is losing market share to natural gas and energy conservation. They're fighting back by opposing any conservation or renewable-energy initiatives.[/caption]
First off what is the Energy Efficiency Improvement Act of 2014? The bill contains 4 parts. Title I establishes a voluntary, market-driven approach to aligning the interests of commercial building owners and their tenants to reduce energy consumption. Title II exempts large grid-enabled electric-resistance water heaters from regulation if they contain thermal-storage capacity. Title III requires energy efficient government technologies. Title IV requires federally-leased buildings without Energy Star labels to benchmark and disclose their energy use.
Too bad the Dems and Repubs couldn’t figure out how to pass this non-controversial and fairly anemic bill. The bill is actually subtitled “Bipartisan Solution to Encourage Energy and Cost Savings”. On May 12, Congress almost passed the bill. Par for the course, at the last minute, Congress dissolved into partisan bickering and the bill failed. According to a quote from a New York Times article on May 12, Senator Rob Portman, Republican of Ohio said “Today’s failure to move forward on a bipartisan energy-efficiency bill is yet another disappointing example of Washington’s dysfunction”. Portman and Jeanne Shaheen, Democrat from New Hampshire are the sponsors of the bill.
For a year staff members from both sides of the aisle have worked on this bill. It contained provisions to cut homeowner’s energy use, utility bills and carbon footprints, and other measures that make it easier for consumers to buy “smart metered” water heaters and make it cheaper for manufacturers to build energy-efficient cooling and heating systems.
The Problem with Congress[caption id="attachment_5053" align="alignright" width="199"] Coal-fired electricity is the greatest known threat to human health and our climate.[/caption]
Congress hasn’t passed a major energy bill in seven years and counting. One problem is that representatives of the coal industry oppose any attempt to save energy or to reduce our electrical peak load. Too bad, because our wasteful electricity usage and dangerously high electric peak load are the most destructive air-pollution and climate-change hazards. We can't make any progress on air pollution or climate change without reducing electricity usage and electric peak load, so we've got to find a solution to this opposition from big coal.
Let’s make Congress accountable for their “do nothing” behavior: constantly putting their political careers ahead of the nation’s priorities. Ask your Congressional representative, “What happened to the “Energy Efficiency Improvement Act of 2014?”.