Eco-Design, Payback Period and Savings

Editor’s Note: This is more or less the 100th weekly column I have written for our city’s newspaper, the Wanganui Chronicle.  Screen shot 2014-03-29 at 6.58.46 AM

Nearly two years have passed since I was invited to write this column, which brings us to what is approximately the 100th edition of Eco-Thrifty Renovation.

Since starting the weekly column  23 months ago, we have received our certificate of compliance for the renovation, I have been capped a Doctor of Philosophy by Waikato University, we witnessed the birth of our first child, and saved approximately $5,000 on electricity when compared to the average NZ household.

Yes, $5,000, not a misprint.

Savings earned from investment in energy efficiency is known as ‘payback’, and the time that it takes to recoup the investment is known as ‘payback period’.

For example, a compact fluorescent light bulb that costs $5 will usually “pay for itself” in energy savings over the course of about 12 months depending on use. This means the payback period is 1 year, representing a 100% return on investment. During the second year that $5 is in your pocket.

We’re not specific about exactly how much we save from each of our many energy efficient investments. We simply look to our monthly power bill – ranging from $17 to $31 – to gauge our performance against average domestic users.

While I have been writing this column for 23 months, we have lived in our Castlecliff home for 40 months, meaning our total energy savings thus far is approximately $9,000: roughly 1/3 of our investment in passive solar redesign, solar hot water, and energy efficient appliances.

This puts us on track for a payback period of under 10 years. In other words, we will essentially “double our money” by saving the same amount we initially invested. After the payback period, every dollar saved is a dollar in our pocket: hundreds each and every month.

In the meantime, the faster power prices rise, the shorter our payback period becomes: 9 years, 8 years. Some people might say we have “future-proofed” ourselves against rising prices. We have achieved all this by using eco-design to work with natural energy flows.

Investing is good design saves energy and money, but sustaining bad design costs energy and money.

Screen shot 2014-03-29 at 6.58.16 AM

For example, a recent article in the Chronicle indicated that Wanganui District Council decided to bulldoze the beach as its management strategy 12 years ago. At a reported cost of $25,000 per year, simple maths tells us ratepayers have contributed $300,000 during that time and we still have the same poorly designed beach, with a high probability of higher ‘grooming’ expenses in the future.

This is like having a big, draughty villa full of energy-gobbling appliances and light bulbs, and paying hundreds of dollars month after month for power, and after 12 years being in the same situation. Alternatively, after 12 years we will have saved over $30,000 on power, paid back all of our investment, pocketed the savings, and have a warm, dry, low-energy home.

Using an imaginary time machine, let’s travel back and consider that council made the decision 12 years ago to invest in a beach redesign that worked with natural energy flows instead of against them. As long as we’re pretending, let’s say we take the $300,000 with us.

Back in 2002, say we invested $100,000 in a beach eco-redesign that resulted in $7,000 annual maintenance instead of $25,000. This resulted in yearly savings of $18,000 and a payback period of five and a half years. From the sixth through 12th years we saved $18,000 per year for a total savings of over $108,000. (Please note, these estimates are used for explanation only.)

By 2014, we could look forward to saving $18,000 or more per year moving forward. Additionally, we would have “future-proofed” ourselves against rising diesel prices and what the vast majority of climate scientists have predicted will be increased extreme wind events, as we’ve already seen this spring and summer.

While hindsight is 20/20, eco-design thinking and payback period allow us to ‘travel’ into the future and look back at what decisions will be most cost effective. It’s worked brilliantly for us.

 

Peace, Estwing

 

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