Breaking the Builder Conumdrum

A common problem in the market for energy efficient homes is paying for the added cost. This problem stems from different incentives for builders and home-buyers. Today, the incentive for builders is to build a big house cheaply. That way, when the real estate agent runs the "comps" Sally Shoddy's constructions look cheaper than Ernie Efficient's.

There is two ways around this. First, use more imagination. For example, if you use high quality windows and insulation, do you need as large a furnace? The Rocky Mountain Institute doesn't think so. Their building in Snowmass, CO has no furnace whatsoever.

But even if you can't get that cost down, you can use a green mortgage highlighted in today's Wall Street Journal. I predict this product will catch on in coming years. The lender rolls the price of the energy efficiencies into the mortgage.
""We liked the house but wouldn't have been able to afford to fix it up," Ms. Craig says. She says the cost of improvements adds an extra $100 to their monthly mortgage costs, but they save an estimated $2,000 a year on energy bills."

What happens is the bank considers that $2000 per year as additional income. With the subprime fallout, this will be a way to make yourself more credit-worthy to banks. So everybody wins - you get that green house and the bank qualifies you for a bigger mortgage.

And the builders?
"
The products are also available for new construction. Homes that are already energy-efficient can be audited and the amount that is predicted to be saved on utility bills is counted as extra income for the home buyer.
"
The builders can differentiate their offering from Sally Shoddy's by being able to offer this product.

Score one for distributed power

Treehugger reports and B&Q in the UK is putting up a 2MW wind turbine at their Nottinghamshire distribution center. The article was light on financial details, which left me wondering if this was a publicity stunt or a bone fide investment. Either way, I like the move toward distributed power. The blessing and curse of methods like wind and solar is that they are granular. That is, you can have a small amount of it. This is a great example of industry capitalizing on the granularity of this power source.

The Myth of Peak Energy

The Oil Drum published a long report on "global peak energy." There is lots of insightful research, including the unflinching correlation between population growth and energy use. Ultimately, it reaches the Malthusian conclusion that global energy and with it population will peak between 2025 and 2030.

The notion of peak energy seems to piggy back on the notion of peak oil. But there is a very good, physical reason for peak oil - there is only so much of it, and it can only come out of the ground so fast. Peak energy, however, is a meaningless term. Energy can come from anywhere. If there was going to be a global shortage of energy there would be a short run crisis, but enterprising citizens/companies would step up by building solar/wind/tidal/thermal/etc power plants. As the cost of energy increases, more and more sources of that energy start to look appealing.

The one thing people know how to do is reproduce. In the absence of cataclysm, they will continue to do so.

The Nuclear unLearning Curve

Bloomberg (via Gristmill) writes about the troubled construction of a nuclear plant in Finland.
"
One Areva official points to a nagging issue for reactor builders: inexperienced contractors working for an industry that has been dormant in much of Europe and the U.S. for 20 years.
"
Business types out there will be familiar with the learning curve. Essentially, every time total production is doubled, costs come down some percentage. So if you made 1000 units at $10 average cost, when you made 2000 units, the cost should be down to $8 on a 20% learning curve.

But this comment speaks to a forgetting curve. So few nuclear plants have been built that delays and problems (like lumpy concrete and problematic steel grain sizes) have run up the cost until it is "more than 25 percent over its 3 billion-euro ($4 billion) budget."

Building a new nuclear reactor takes years. If you believe in nuclear, can we build enough reactors (and deal with the waste) to make a difference?

More advice for eco-preneurs

A story in Gristmill makes a good follow-up to yesterday's company profile. I said that anyone hoping to create a new product in the that caters to the green crowd needs to make it cheap. Gristmill says:
"It's worth remembering that for those not schooled in the minutiae of climate, it is genuinely hard to figure out how to make a meaningful individual contribution, especially since most people are already overwhelmed with the workaday obligations"

In other words, make it easy too.

This is not groudbreaking, but for those of us who make an effort to "go green" it is easy to forget that the vast majority of people have no energy for such an effort.

"Better, easier, cheaper" is the mantra for all products. It is time that green products live up to that same standard. Products like the Windspire (via Treehugger) might be cool, but they are not what we should be striving toward.

Company Profile: Feuz

Treehugger has an article on a new recycling company called Feuz. Feuz blends concrete with products such as recycled glass. The results are, to my eye, impressive. I find concrete ugly and the (glossy marketing) pictures on the Feuz website were appealing.

There is no word on the price of these products. I would be surprised if Feuz can compete on price. Maybe in the high priced items like countertops with Feuz stone. But that makes Feuz another green/glamor product.

Of course, it is easy to be green if price is not an object. To all you eco-preneurs out there, bring the price down. If you make it cheap and easy to be green, the world will drive their SUVs to your door.

More on off-shore wind

Treehugger makes the argument for off-shore wind. I've talked before about off-shore wind and Treehugger capture the essence of the argument perfectly.
"Most campaigns against turbines are based around the noise and the visual impact, and these have been reduced by going offshore. It is more expensive to do it here than to do it on land"

I could campaign against coal saying that it is dirty, polluting, and kills (depending on how you calculate it) perhaps several and perhaps dozens of people each year. But somehow coal remains cheap and wind power is forced to be expensive by going off-shore.