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Environmental assessments alert owners to dangers of climate change
By Stephanie I. Cohen
Last update: 12:01 a.m. EDT May 17, 2007
WASHINGTON (MarketWatch) — Are the effects of climate change — coastal erosion, rising sea levels and increased hurricanes — coming to a neighborhood near you and what could it mean for the value of your property?
Climate Appraisal Services, a new online service for home buyers and homeowners, claims it can tell whether a home will be submerged from climate change in the next century by using a property’s address.
Entering the location of a home in the continental U.S. at the company’s Web site, www.climateappraisal.com, pulls up an environmental lowdown: information on the coastal erosion, tornadoes, earthquakes, drought, floods, landslides and volcanoes in the area. Visit the Web site.
David Purcell started thinking about the impact of climate change on U.S. shorefront property when his family went shopping for a beach home on the East Coast about a year ago. Purcell, a former banker who now heads the company and is an investor, wanted information that would help him assess the environmental risks a beachfront home could face years down the road and whether it would retain its value.
“A one-meter sea-level rise has been projected for this century,” Purcell said, adding that this change “absolutely has the potential to re-evaluate real estate values off the coastline.”
The United States has over 12,000 miles of coastline and nearly 90,000 miles of shoreline, according to government measurements. These coasts are getting crowded and playing host to more residents each year.
The “coastal fringe” that makes up 17% of the nation’s land area is home to more than half of the U.S. population, or 153 million people, according to the National Oceanic and Atmospheric Administration.
Coastline states such as Massachusetts, concerned about the future costs they may incur battling eroding beachfronts that arise from climate change, recently took their case to the Supreme Court and won. Read more about the case.
Purcell’s initial search for information turned up some historical data but nothing specifically about the location he was thinking of purchasing, leading him to contact some U.S.-based scientists working in the climate field. Those conversations laid the groundwork for Climate Appraisal Services. Today, Purcell’s partners are professors from the University of Arizona who specialize in geosciences, geography and atmospheric sciences.
Environmental report card
Some information can be gleaned for free in a “standard report” that includes monthly average and extreme temperatures for an address over the past 30 years, the county air quality index, ultraviolet (UV) index and predictions of shoreline reduction. Every report contains commentary from the company’s science advisors.
For customers looking for more detailed environmental information — such as the occurrence of Lyme and West Nile disease, rate of leukemia, location of coal-fired power plants, level of toxic pollutants in the air, proximity to hazardous and chemical cleanup sites in the neighborhood — a “premium report” can be ordered for $30.
While some, if not most, of the information provided in these reports can be found on the Internet or through government sources, pulling it together for a particular latitude and longitude and presenting the information clearly (often in charts and with graphics) is the real service the company is offering customers who want to know more about the place they may call home.
The company’s reports rely on information from the U.S. National Oceanic & Atmospheric Administration, National Weather Service, Climate Prediction Center and NASA Jet Propulsion Laboratory among other agencies.
A premium report for a Massachusetts address not far inland quickly revealed “some potential shoreline reduction nearby” and several superfund sites, Purcell noted. The strongest hurricane within 50 miles of the location was a category 2 in 1991, the last tornado within 7 miles was in 1958, and a 5.6 magnitude earthquake within 100 miles occurred in 1940.
Vital information or information overload?
Purcell said his main interest from the beginning has been identifying the potential impacts of climate risk, which he calls the “issue of the century.”
As Florida and Louisiana residents know from recent hurricane seasons, the size and frequency of hurricanes and the devastating property damage they bring are a concern for homeowners and insurers alike.
“You’re getting information similar to what the insurance companies are getting,” Purcell said. “Their No. 1 concern is maintaining their equity position.”
Insurers are talking more about climate change. Last year, insurance giant AIG released a policy statement on climate change, saying its companies “continually factor in changes in climate and weather patterns as an integral part of its underwriting process.”
The insurance industry tends to blend two views when assessing risk, both looking ahead five years and weighing 30-year historical patterns, said John DeMartini, who heads the catastrophe risk management practice for Towers Perrin, which helps clients assess their risk and insurance needs. The trend towards a five-year outlook is a result of the severity of the 2004 and 2005 hurricane seasons and damage claims, DeMartini said.
DeMartini noted that weather is a “key facet” in assessing risk and said “if you’re involved in the real estate market you have to be particularly concerned.” But he also points to what he sees as the “uncertainty associated with multiyear forecasting” that can come with trying to measure climate-change impacts.
Residential reality
How vital is this type of information when it comes to making a real estate purchase?
Housing statistics show that Americans move on average every seven years and climate predictions often span decades and centuries. It might be a stretch to think a four-degree temperature rise over the next 50 to 100 years or a three-foot rise in sea level that could submerge some areas off the Massachusetts coast in 2100 will be a factor in most residential real estate transactions today.
But Climate Appraisal thinks it can capitalize on a growing interest in information about climate change and concerns about regional weather patterns and insurance coverage. The company’s Web site says it is targeting prospective home buyers, homeowners who “want to know what prospective buyers may know” and people in property-related industries.
Purcell envisions the information being useful in the “negotiating process” between buyers and sellers. Between six million and seven million sales of existing homes are recorded in the U.S. each year, making this a potentially fertile market.
Traditional home appraisals used by lending institutions in the U.S. are somewhat standardized and regulated by Congress and state authorities since the savings and loan scandals of the 1980s, said John Brenan, director of research for the Appraisal Foundation.
Whether environmental appraisals will ever become a mainstream part of the real estate process is unclear, he said.
Source: http://www.marketwatch.com/news/story/your-home-value-suffer-earth/story.aspx?guid={56D60BD6-7E66-4F8A-A43C-0894CC78E42E}&siteid=e2emsn
Even as states ramp up incentives, the payback for homeowners remains elusive.
By Stephanie I. Cohen, MarketWatch
The race is on to install solar panels in American homes thanks to generous government incentives such the $3.2 billion solar initiative California launched in January.
Despite the minuscule amount of solar power generated today — roughly one-thirtieth of 1% of all the electricity produced in the U.S. — recent technological advances and a continued decline in the price of solar systems are prompting more homeowners to ask if this renewable energy source is now worth the investment.
Analysts say they are still crunching the numbers when it comes to deciding whether residential solar systems, also referred to as photovoltaic or PV systems, make economic sense. The answer hinges on how much and how fast solar can cut a homeowner’s utility bills and thus how long it takes to pay off the initial investment to add solar panels to a home.
“When consumers contemplate the purchase of a system for their home, they approach it like any other financial investment and examine the set cash flows and expected return,” according to a new report from CIBC World Markets on residential solar.
Like any large-scale purchase, consumers considering solar tend to initially focus on the upfront costs. Solar systems for homes begin around $25,000 but can easily go higher depending on the size of a house and the amount of power they generate, said Rhone Resch, president of the Solar Energy Industries Association.
Electricity prices matter
A key factor in figuring out how long it will take to become profitable with a switch to solar is the cost of electric rates for a home, said Jeffrey Bencik, an analyst with Jefferies & Co. Bencik said retail electricity prices can vary from a low of eight cents a kilowatt-hour in some parts of the U.S. to as high as 18 cents in parts of San Diego.
“You really have to do the math on a region-by-region, house-by-house basis,” Bencik said.
BP Solar offers a handy calculator for homeowners thinking of installing solar power. The calculator uses a ZIP code and a current estimate of a home’s monthly electric bill to calculate what it would cost to install a system, along with the rebates that are available. Check out the calculator.
In New Jersey, for example, a 10-kilowatt residential solar system is estimated to cost about $77,500. After a state rebate of $38,000 and a $2,000 federal tax credit, the out-of-pocket cost to the homeowner is $37,500. That will provide an estimated annual savings of $1,500 on electricity bills.
The payback period for such a system is roughly 25 years at current utility rates, according to estimates provided by the New Jersey Board of Public Utilities.
The payback period can drop to about 10 years if a system owner sold $2,400 a year in solar renewable energy certificates to electric suppliers that are required to generate a certain portion of their power from renewable energy sources. The certificates are doled out each time a solar system generates 1,000 kilowatts of power. The average residential electricity customer in New Jersey uses about 700 kilowatt-hours per month, or 8,300 kilowatt-hours per year, according to the New Jersey Board of Public Utilities.
Homeowners typically move about once every seven years, according to Census Bureau data. But these incentives hold appeal mostly for those who plan to stay in their current houses well beyond that average.
All eyes on California
CIBC looked at the likely payback for residential solar systems installed in California, the country’s largest solar market, and considered the cost of solar systems along with government-sponsored incentive programs and electric rates. The returns, it said, were “less stellar” than incentives offered in other countries.
CIBC estimates that the cost to install a system in California is about $8.50 per watt. But after a $2.20 per watt state rebate and a $2,000 federal tax credit the net cost drops to $5.77 a watt.
This means that buying a solar system can yield homeowners a 6% return on their investment. It would take about 16 years to pay the initial investment, though the payback period can vary depending on peak electricity rates in the region, the report’s authors said in an interview. If homeowners are generating power during peak daytime demand when electricity rates are typically the highest, they will save more money.
Some states also have net metering, which allows homeowners to sell extra power they produce back to their local utilities, potentially lowering the payback period. Ideally the payback period needs to get down to the “lower double digits or the high single digits” to attract more investors, said Jeff Osborne, an analyst at CIBC and author of the report.
“We believe system costs would have to continue to come down in order to make a (photovoltaic) investment in California more attractive and spark significant growth there,” the report said. The rule of thumb for investors is finding a 10% return and a payoff period of 10 years, said Osborne.
Osborne added that “the economies completely change” for someone thinking of putting solar on a newly built home rather than retrofitting an older home, since the cost of the solar system will be marginal compared with the overall price of the home and can be tucked into the mortgage without raising overall payments too much.
Incentive programs
For many customers, the refunds and tax breaks available from utilities, states and the federal government play a key role in the decision to go solar, analysts said.
Rebates and incentives vary by state. New Jersey is the second largest solar market in the U.S. and offers homeowners up to 50% in rebates toward the purchase price and installation cost of a solar system. The rebates used to be as high as 70%, but increased interest led the state to reduce them in order to accommodate more applications, said Doyle Siddell, a spokesman for the New Jersey Board of Public Utilities.
At the end of the third quarter of 2006, nearly 800 residential and commercial solar systems had been installed under New Jersey’s program, compared with 493 for all of 2005, according to figures provided by the state. In 2001, the first year of the state’s Clean Energy Program, there were only six solar installations. The increase “has been drastic and dramatic,” Siddell said.
Arizona is also generating interest among investors as a “model location” for solar due to the high number of hours of sunshine the state experiences and its existing solar electric infrastructure, according to a report on Arizona’s solar future prepared by Navigant Consulting for state officials and released in January. Arizona utilities offer homeowners incentives of as much as $3 per watt to install residential solar.
California is the dominant U.S. solar market, with 73% of the systems tied into the U.S. power grid in 2006, and the state has made a big solar wager. Gov. Arnold Schwarzenegger last year signed legislation funding the installation of 1 million rooftop solar panels for homes, businesses and schools. These systems will generate 3,000 megawatts of power for the Golden State and eliminate 3 million tons of greenhouse gas emissions, the governor says.
In California, close to 21,000 PV systems were installed and connected to the power grid by mid-2006, representing approximately 174 megawatts of power, according to a report by the Northern California Solar Energy Association. The California Energy Commission processed 11,734 PV incentives between 1998 and 2004, or an average of 163 per month. From January 2005 through June 2006, the commission processed 13,714 incentives or about 762 per month, the report said.
Utility bills as incentive
Research from Jefferies predicts more incentives will attract more solar buyers. “The U.S. incentive programs are continuing to proliferate. . . . We expect these programs to continue to drive significant increases in installations,” analysts at the firm said in a new report evaluating clean technology.
Resch, who used a 50% grant from the District of Columbia to install a solar system on his own home, agrees that it is essential for installation costs to come down for solar power to have wider market appeal. Resch said the goal of the industry is to achieve an installed cost for consumers of about $3 per watt. He pointed out that solar costs have come down about 85% over the past 20 years and said growing demand will continue to bring them down.
Analysts believe that if consumers continue to focus on rising monthly power bills, they will increasingly turn their attention and dollars to residential solar. Analysts at Signal Hill stress that consumer utility bills — which are driven predominantly by coal, natural gas and nuclear costs, and not oil — will drive demand for residential solar.
In some parts of the country residents have seen rates rise as much as 70% in recent years.
“Solar demand and appeal is driven by comparative residential or commercial electricity costs,” Signal Hill said in a recent report. “We think consumers (or retail solar-PV system) buyers will make the right choice and remain focused on their utility bill.”
Source: http://realestate.msn.com/Improve/Green/Article_mw.aspx?cp-documentid=3609262
Here are 16 simple ways to use the vital resource wisely and save money at the same time.
By Jane Bennett Clark, Kiplinger.com
1. Go low-flow. Listen up, water wasters: With a few twists of the wrist, you can save 25% to 60% of the water it takes and 50% of the energy necessary to shower and shampoo you and your family.
How so? Install a low-flow shower head, which restricts the water output to no more than 2.5 gallons per minute, the federally mandated limit for new fixtures. The shower heads generally run $10 to $20 a pop (some utility companies give them away) and screw into existing fittings.
You’ll squeeze the most out of the low-flow strategy if you live in a home built before 1994 and if you haven’t renovated your bathroom: Older shower heads send as many as 5.5 gallons per minute down the drain. The new fixtures go as low as 1.5 gpm, saving 7,300 gallons and $30 to $100 a year over their 2.5-gpm counterparts.
Unlike older versions, which put you under a sprinkle, one new low-flow maintains decent pressure by forcing air into the mix, and another channels water into massagelike streams. A third type, the H2Okinetic Technology shower head, by Delta, shoots bigger droplets at a higher speed than the other two, approaching the feel of an old-fashioned soaker at a parsimonious 1.6 gpm. The fixture runs about $55 at retail stores.
If you haven’t a clue how fast the water runs through your shower head, put a bucket under the nozzle and time how many seconds the water takes to get to the 1-gallon mark. If it’s less than 20 seconds, head for the hardware store.
2. Retrofit your faucets. As you browse the plumbing aisles, check out faucet aerators — doohickeys that screw into your faucet threading and cut the water flow from 3 to 4 gallons per minute (the rate on older fixtures) to as little as a half-gallon. As with shower heads, you can figure out how fast your faucet flows by putting a quart container under the stream. If the container fills in less than five seconds, your faucet could use this fix.
As their name suggests, aerators blend water and air, reducing the flow without sacrificing pressure. At 50 cents to $3 apiece, the devices are some of the cheapest green gadgets available. Your utility company may even offer you a rebate or hand them out free.
Aerators come in a range of flow rates, up to 2.2 gpm. A faucet that flows at 1 gpm gets your toothbrush and washcloth plenty wet. But unless you want to grow old waiting for your pasta pot to fill, you’ll need to give your kitchen faucet a bit more oomph. Use an aerator with a flow rate of at least 2 gpm.
3. Have a little WaterSense. Soon, you won’t have to worry about bringing home products that promise a deluge and deliver a dribble or that don’t live up to their water-saving claims. The U.S. Environmental Protection Agency recently launched a certification program that vets devices for water efficiency and performance, and awards the WaterSense label to those that do the job right. You can already find the label on high-efficiency toilets; bathroom faucets and aerators are next in line. The WaterSense program also certifies landscapers who have been trained to use water wisely. Here’s a list of landscapers certified by the WaterSense program.
4. Go with a trickle. For kitchen chores that demand an open spigot, go with a trickle, not a torrent. Restrict the water flow to the width of a drinking straw and save up to a gallon of water per minute.
5. Stop the flow. Turn the water off while you brush your teeth. Running the water for two minutes — you are brushing for two minutes, right? — sends 2 gallons of water down the drain.
6. Forget to flush once in a while and save up to 4.5 gallons per memory lapse.
7. Use the right setting. The permanent-press setting on your washing machine uses 5 gallons more per load than the regular setting. Reserve it for clothes that need line-drying.
8. Shower. Switch from a bath, which requires 30 to 70 gallons, to a shower, which uses 25 gallons in 10 minutes under a 2.5-gpm shower head. Then shower shorter. Can’t do it? Jennifer Aniston takes three minutes to get the job done, according to “The Green Book,” and you don’t hear her complaining.
9. Plug the leaks. A leaky faucet wastes as much as 2,700 gallons in a year — if it doesn’t drive you crazy first. So fix it already.
10. Fill ‘er up. Run the dishwasher and the clothes washer with full loads.
11. Raise the mower blades. Adjust your lawn mower to the 3-inch setting. Shaggy grass holds moisture longer, requiring less watering.
12. Test the toilet. Put a drop of food coloring in the toilet tank. If the color shows up in the bowl, your tank is leaking and you’re wasting up to 200 gallons of water a day.
13. Turn off the water while you shave and soap up. If you shave in the shower, outfit the wall with the nifty Shower Mirror, complete with clock, razor holder and light, from Frontgate for $59.50.
14. Water early. Water your outdoor plants in the early morning, before the sun can burn off moisture.
15. Don’t overwater. Before starting your sprinkler, step on the grass. If the blades spring back, hold off on watering for a day or two. The average lawn needs only one hour of watering a week.
16. Get your car washed. Take your car out for a shampoo and rinse. Commercial car washes save up to 100 gallons of water per wash over the do-it-yourself kind, and they often reuse the rinse water, according to “The Green Book.” If every American took the lazy way out just once, total savings would amount to 8.7 billion gallons of water.
Source: http://realestate.msn.com/Improve/Article_kip.aspx?cp-documentid=5520628
A California company offers group discounts to communities if enough homeowners want to install solar power systems. That’s just one strategy helping to fuel the boom in solar energy use.
By Stephanie I. Cohen, MarketWatch
Persuading a group of neighbors to agree on anything is rarely easy. But in a growing number of U.S. communities, neighbors have proved fairly convincing at influencing dozens of their peers to spend $25,000 or more on a rooftop solar system.
It started in Portola Valley, Calif., a sunny community 35 miles south of San Francisco. Last December, owners of 78 of the town’s 1,700 homes decided to pool their purchasing power and call in a large order for residential solar systems.
SolarCity offered the community a group discount on the rooftop and backyard photovoltaic systems and installed them. The California company, which started out installing individual orders for homeowners, began filling bulk orders for neighborhoods in California in 2006 as a way to try to drive down the cost of solar systems.
“If an entire group comes together, they get a discount,” said Lyndon Rive, founder and chief executive officer of SolarCity. “With three or four homes, you don’t get economies of scale.”
Plenty of money and effort is being spent on developing solar technology but the most neglected part of the renewable story is the installation piece of the puzzle, Rive said. Increasing the volume of sales of solar systems will help solar-generated electricity reach price parity more quickly with the electricity generated from power plants that burn fossil fuels, he said.
Today, SolarCity has community discount programs under way in seven California cities and has completed installations in eight others. The company says that by September it had sold more than 500 residential solar systems in 19 cities and towns.
By the end of this year, the company is slated to open new offices in Colorado and New Mexico, and by the first quarter of 2008, SolarCity plans to begin offering community discounts in both of these states as well.
SolarCity’s program is focused on retrofitting existing homes with solar panels. But so-called solar communities aren’t new. U.S. home builders such as Pardee Homes, Pulte Homes and Shea Homes for several years have been developing planned communities where residences feature solar rooftops.
Persuading 40 neighbors to go green
The company’s offer is simple: If a town can get enough homeowners to sign up for rooftop or backyard solar systems, they receive a 20 percent to 30 percent cut off the local market price of a home solar system. The company typically aims to sell roughly 175 kilowatts to each community. Since an average-size home in the United States can usually support at least a four-kilowatt solar system, 44 homes becomes the standard target. Commercial buildings and businesses also can be a part of the mix.
SolarCity set a goal of 175 kilowatts for Portola Valley residents. The community easily topped the goal, with the participating home systems accounting for 343 kilowatts. Additional installations in the community have added 55 kilowatts, bringing the town total to roughly 400 kilowatts of solar power.
Other communities also have surpassed the company’s goal. More recently, 119 households in Mountain View, Calif., ordered solar systems totaling 367 kilowatts. An additional 124 kilowatts were subsequently installed in the community, even though these homeowners did not receive the rebate. Today, 2 percent of the single-family residences in Mountain View have solar installations, and SolarCity installed more than half.
But not all towns receive the discount offer. SolarCity’s strategy has been to handpick towns after conducting extensive local research, educating and interviewing homeowners, inspecting homes to determine if they can be outfitted with a solar system, and evaluating homeowners’ electricity bills. The process is rigorous and can take up to three months to complete, with 200 site visits to 50 homes, Rive said.
Targeting big energy consumers
The cost of a typical five-kilowatt system translates into about $9 a watt, Rive said. SolarCity can shave off about $1.50 per watt by selling in bulk, which brings the cost down to $7.50 a watt, before state rebates and federal tax incentives. A kilowatt is equal to 1,000 watts.
Federal and state incentives are a key part of the discount program. After deducting state rebates and federal tax incentives, which pay for about 25 percent of a residential solar system in California, homeowners in California working with the discount program have paid around $24,000 on average for a system, Rive estimated.
The California Energy Commission hosts a Clean Power Estimator that allows California residential and commercial electric customers to use a ZIP code to generate an estimate of the costs and benefits of investing in a solar system.
A report from Navigant Consulting released in September concluded that “the combination of California incentives, more aggressive [photovoltaic] system price reductions and new business models can have a significant impact on market adoptions.”
California utilities use a multitier pricing system for electricity, which means that the more electricity homeowners use, the higher the rate they pay. Power prices range from 11.4 cents to 36.4 cents per kilowatt hour. This is why SolarCity employees assess the utility bills of interested homeowners to see if they are above average: Higher power bills and a higher price for power are likely to shorten the payback period for a solar investment.
“In the Bay Area, you have homes with six computers that are always on,” Rive said. “There are other parts of California that have tremendously huge air-conditioning demand.”
Terri Steele, spokeswoman for the California Center for Sustainable Energy, agreed that solar is being marketed to homeowners “with large homes, a couple of SUVs in the driveway” and not to the “most energy-conscious”‘ consumers.
If an intense assessment indicates a town is right for solar, SolarCity gives the community a deadline to sign up the needed number of homes.
Mountain View residents had little trouble meeting the target. “It was pretty darn easy,” said Bruce Karney, a resident who spearheaded the local buyers group. Karney now works for SolarCity as part of the team that markets and sells solar systems to other communities.
Karney acknowledged that the decision to go solar can be a significant one for many families. “It’s a relatively expensive purchase. It’s like buying a car,” he said.
But Karney also noted that communities with high-priced housing may find it a little easier to swallow the initial investment when it represents a small portion of the total value of a home. In Mountain View, the cost of a solar system is less than 2 percent of the cost of the average home, Karney said.
“The return on investment differs almost for every customer,” said Rive, who estimates that SolarCity customers see a return on investment of between 8 percent and 17 percent.
Boom in solar use
California was a natural focus for SolarCity. The sun-drenched state is the leading solar market in the United States, representing 73 percent of the systems tied into the U.S. power grid in 2006.
In 2006, U.S installation of solar photovoltaic devices jumped 33 percent from the previous year, according to a 2007 report from Solarbuzz, an international solar research and consulting company.
The solar boom in California is bolstered by the California Solar Initiative, a 10-year, $2.1 billion solar incentive program for existing residential homes and commercial buildings launched in 2007.
A report released by the California Public Utilities Commission says solar “demand is booming.” The commission launched the solar initiative on Jan. 1 with a goal of creating 3,000 megawatts of new, solar-produced electricity by 2017. The program has a budget of $3.3 billion over 10 years.
In the first nine months of 2007, requests for California Solar Initiative incentives “are on track to exceed California’s total installed solar from the previous 26 years,” according to the report.
Disregarding applications that have been withdrawn or rejected, the program has received 5,109 applications for 160.5 megawatts of demand, worth $320 million in incentives. Residential applications dwarf all others (4,564 applications) and make up 13 percent of the total megawatts in the active applications.
As of Sept. 18, there were 1,157 projects installed and operating, and that had either received payment or were about to be paid. The installations added 9.4 megawatts of new solar capacity and totaled $25 million in rebates.
But California’s rebates step down over time, and as this happens, company discounts like those offered by SolarCity are likely to become more important to customers looking for a price break. “The faster you convert, the better your rebate,” Steele said.
Source: http://realestate.msn.com/Improve/Article_mw.aspx?cp-documentid=5793332
A novel new program in Cambridge, Mass., is helping people become energy efficient by using the money they save on utilities to pay for the energy-conserving improvements. Now, cities across the U.S. are looking at adopting this model.
By Karen Aho, MSN Real Estate
Admit it: It gets irritating to be told — over and over and over — to go green when you can barely afford to go to town.
It costs $80 to fill the tank, and the gas bill at home is rising fast, too. So, sure, it’s nice to know that an Energy Star refrigerator could slash the monthly electric bill. But where’s the $1,000 for that new appliance supposed to come from?
Plus, how do you know which green technology is the best choice for your particular home? There are WaterSense toilets, Energy Star clothes washers, gray-water systems and double-pane windows, to name just a few choices.
All those green tips have turned into white noise. It’s hard to know just what to do, let alone how to pay for it.
Enter the Cambridge Energy Alliance, which is shaping up as a model solution for cities nationwide. The Massachusetts nonprofit has an answer that, on its face, is so deceptively simple one can’t help but wonder why it hasn’t been done before: Go to every home, business and public building and offer a complete, on-site energy makeover, including financing that means no extra costs for owners.
Your energy savings foot the bill
The alliance kicks into action this summer, with plans to reach half of Cambridge’s buildings within five years, and already it has attracted plenty of imitators. It uses no taxpayer money, relying instead on a revolving loan pool made up largely of private funds. Borrowers don’t even need to incur extra monthly payments; their loans are paid with the savings from the new reduced energy bills.
“You’re borrowing from your utility budget to pay for two things: a now-lower utility bill and the debt service on the loan,” says Steve Morgan, of Clean Energy Solutions, the lead consultant on the project. “This can be done without a government penny.”
The energy alliance model provides hands-on guidance from start to finish. It will:
* Come to you. The alliance plans grassroots “viral marketing” to reach every household and business.
* Conduct an energy audit of your home or building.
* Outline the cost of potential upgrades to heating, plumbing and electrical systems and to insulation, structure and appliances.
* Estimate the projected savings.
* Calculate the number of months each upgrade would take to pay for itself in energy savings. For instance, lights or a refrigerator might have a short payoff — perhaps one year — and thermal windows a long payoff — maybe 15 years.
* Suggest which upgrades are cost-effective.
* Arrange financing. Owners can pay for the upgrades themselves or choose from prearranged loan plans, including a low-interest loan for low-income residents and areas. Loan payments are structured with the goal that they not exceed the monthly utility savings, so the homeowner is redistributing funds rather than adding costs. When the loan is paid, the owner pockets the full monthly savings, about 15% to 30% of his old energy bills.
* Apply eligible rebates or incentives. (To see your area, check the Database of State Incentives for Renewables & Efficiency.)
* Bring in the contractor to do the work.
* Supervise the work.
* Handle complaints.
* Track the energy savings.
* Conduct engineering inspections of all large projects and sample small projects.
* Collect and report on the community’s collective energy savings.
All residents need to do is sign some paperwork, including authorization for a possible credit check, and open their doors.
“We’re doing it all for you. And believe it or not, nobody’s ever done that before,” Morgan explains.
Green your home for free. © Image Source/Jupiterimages
A big energy solution for the average homeowner
In the United States, buildings consume more energy (40%) than either transportation or industry. Of that, homes consume 55%, according to the U.S. Department of Energy’s National Renewable Energy Laboratory. When it comes to waste, homes lose an average of 20% of their energy.
“People should think of their homes as little smokestacks, because most of that electricity comes from coal, and coal is really, really dirty,” says Joel Rogers, director of the Center on Wisconsin Strategy, which is working on a similar energy alliance called Milwaukee Energy Efficiency (Me2), with financing tied directly to buildings instead of residents.
People may know all this. And they may know that it’s far more important to act now as opposed to waiting three or five or 10 years. (It’s more difficult to remove carbon dioxide from the atmosphere later than it is to reduce emissions now.)
But when it comes to beefing up insulation or upgrading a home heating system, people everywhere face the same obstacles:
1. What do I do, exactly?
2. How do I pay for it?
3. Whom do I call to do the work?
“You can’t require people to be saints to make this work,” says Rogers, who’s also a professor of law, political science and sociology at the University of Wisconsin-Madison. “You can’t put the burden on figuring it all out to the individual. You’ve got to fix the system of choice that they face. You’ve got to make them an offer they can’t refuse.”
For decades, energy service companies filled this role for big businesses and public buildings, such as schools and hospitals. But small buildings lacked the scale to make jobs attractive. Energy alliances resolve this by pooling customers, to draw sustainable work and competitive energy-service contracts. Now the smallest homeowner can get the same low-hassle, full-service contract once reserved for the big boys.
An idea that’s taking off
Cities, increasingly committed to reducing Co2, are taking interest. In urban areas, up to 80% of carbon emissions come from buildings.
“If I tried to make a list of every jurisdiction that’s called and said, ‘How can we do this?’ it’s crazy, it’s in the hundreds,” says Deborah Donovan, the alliance’s project manager. Interest has come from across the states, Canada and Asia.
The Cambridge Energy Alliance has spent two years doing the complicated work — structuring partnerships with the city, the utility NSTAR, lenders and energy-service companies — so that now it, and towns borrowing its blueprints, can work fast.
It plans to spend $100 million on improvements in Cambridge in the first five years, cutting peak electricity load by 15% and reducing heating and water use by a comparable amount. The effort is expected to reduce greenhouse-gas emissions by 150,000 tons within five years and save consumers $160 million within 10 years.
“It was motivated by big goals,” says Rob Pratt, senior vice president of The Henry P. Kendall Foundation, a private Boston foundation that’s the brains behind the project. “If we don’t get the big goals, then we’re not going to get the emissions reduction that we need.”
Different city, same plan
Cambridge, Mass., has Harvard University, the Massachusetts Institute of Technology and very high-priced real estate. Many residents there can likely afford to go green without too much hardship.
New Orleans, still struggling to rebuild from Hurricane Katrina and wary after a spate of contractor fraud, is a far different city.
Yet its Alliance for Affordable Energy is borrowing from the Cambridge Energy Alliance.
“We needed a model that took out-of-pocket expenses off the table,” says Forest Bradley-Wright, the program’s director. “The Catch-22 is that people need energy efficiency because their bills are too high. But once they’ve paid the bills there’s no money left over to pay for energy-efficiency improvements. So this breaks that model.”
Bradley-Wright flew north to meet with the Cambridge staff and — if New Orleans agrees to partner with the alliance — he hopes to start audits next summer with commitments of $10 million and 2,800 buildings every year.
The New Orleans alliance is striving to incorporate the loan repayment directly into the utility bill, with graphics depicting year-over-year energy usage to reinforce the financial benefits of conservation.
The benefits go on and on
Energy-efficiency programs do more than just slash bills and carbon dioxide. They also:
* Create jobs. Energy alliance work is self-funding and sustainable, says Rogers, the Wisconsin professor. “It’s not another jobs program. It’s meaningful work that can go along for a long time, that can grow into other things … that can build career pathways.”
A recent study by the University of Massachusetts-Amherst identified millions of workers across all skill sets that would benefit from investments in green technology. The study was released by the Green Jobs for America Campaign, a coalition of labor unions and environmentalists.
* Increase home values. As energy costs rise and people become more environmentally conscientious, homes that use less will be worth more. A recent analysis of home sales in the Seattle area bore this out; environmentally certified homes sold more quickly and for about 30% more per square foot than those without the green label.
* Extend the life of buildings. Think of it as less wear and tear on a structure’s joints, Rogers says, less huffing and puffing in the pipes.
* Create healthier buildings (and happier people). “There have been a lot of studies that show that people are a lot more productive in greener buildings,” Rogers says. Better air circulation, more natural light, less noise and fewer pollutants lead to calmer kids and perkier adults.
* Lower energy prices. At present, energy grant programs reach only a tiny percentage of people, and most homeowners who take advantage of utility energy audits fail to follow up with work, say the experts. If energy demand were finally reduced on a widespread basis, it could cause prices to drop.
Source: http://realestate.msn.com/Improve/Green/Article2.aspx?cp-documentid=9154298
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