[pvusers] RE: economics proven to not work

["Purcell, Mike" <mpurcell@idwr.state.id.us>]

Jim and others,

No, I meant what I said. Efficiency is frequently a better bang for the buck
than buying the cheapest product out there. The person who decides is the
buyer. If your purchase was only designed to last for 2 years, then a 2 year
payback might be reasonable. If not, then why are people paying for college
tuition? And who said anything anything about replacing market forces?

As far as responsibility and change go, they are what help people decide
what forces the market will have. Again you are trying to put far too many
words into my mouth. Or, more accurately, it might be a lack of
responsibility and change. Are you telling me that people like those noisy,
ineffective, $12 bath fans that nearly every builder uses because they are
cheap? How many get replaced every year even though they work the same as
when they were new (no degrade in performance, but when you start with
little . . .)? Sure, people don't always specify every product in a house
that is built, and they won't always choose the most efficent or best
quality. But there is no reason a builder couldn't point out some of these
things if they know about them. Some do. 

Builders (like most people)love to make money first, and then think about
what buyers love. You make it sound as though all the people out there
making things are merely slaves to the market. Sometimes they choose not to
respond to the market because it is a pain in the butt to change. I've been
there and fought change myself sometimes. Change has to come from the buyer
as well as the supplier.

I completely agree with you on the financing problem. Expecting to have
proof before you move ahead with a project that is new . . . sounds like a
chicken or egg thing. But just by the fact that you can even get an
efficiency mortgage for new housing is a start. Habitat for Humanity is even
building more efficient houses because they know it is cheaper in the long
run. Some are even using renewables. Some of the largest builders in the
country are building more efficent homes too, like Pulte.

Some of the financing problems are being addressed with things such as
energy performance contracting. Larger institutions like school districts,
hospitals, etc. don't have to pay up front, get lower bills, and then own
the capital improvements after the contract ends. The contractor makes their
profits off the efficiency gains. 

At least some people are taking responsibility, changing, and making money.

Mike Purcell


-----Original Message-----
From: Jim Eyer [mailto:j.eyer@emailoffice.com]
Sent: Tuesday, January 01, 2002 6:50 PM
To: ae@listproc.sjsu.edu
Subject: economics proven to not work


At 08:44 AM 12/31/01 -0700, you wrote:

>Make AEs and EEs consistent with human's greed rather than trying to
>guilt-trip away that most fundamental human tendency.

>I say: hasn't this been proven to be possible time and time again? If
>companies and people were really just after the best bang for their buck,
>they would always buy efficiency, if not renewables. 

I assume you meant to say that this has been proven to NOT work?

If so what specifically would you replace what I will call market forces
with?  Who decides?  Which of the current recipients of corporate welfare
will be left off the new list?  Are recipients located wihin a sponsoring
politician's district or to which politicians will recipients give large
contributions.


>I think it has a lot to do with resposibility and change. 

So if the world functioned based on "responsibility and change" then
economics and market forces are superceded?  Like it or not

It is not from the benevolence of the butcher, the brewer or the baker that
we expect our dinner, but from their regard to their own interest.
- Adam Smith

>Builders Associations fight energy code
>changes because they claim they will keep new buyers out of homes because
>they can't afford better houses when energy efficient mortgages have been
>shown to be cheaper in the short and long run than the cheaper, wasteful
>houses.

Builders love what home buyers love.  BUT in this case it is the banking
folks that are partly culpible.  Conservation, at least if done as a
retrofit, rarely qualifies for loans that allow conservation to be
amortized.  THAT is finance (in this case mostly PECEIVED risk by bankers),
not lack of "responsibility."  And if greedy government saw the light they
would remove tax-based disincentives (depreciation) for conservation.  If
home buyers clamored for more efficient homes then builders would make 'em.


Has THAT really been proven to not work? (If so I guess all that drivel I
learned about finance and marketing was hocum?)

>The same thing happens when the EPA tries to improve EER's for air
>conditioners. They claim it is too big of a jump and too costly to
>implement. Who actually pays the costs? We know it isn't the companies--
>they will pass on every cost they can. So what is the holdup? 

>Rarely is it economics.

Sorry dude.  I conclude just the opposite.  What buyers want ultimately
vendors like.  Further when BUSINESS evaluates the cost of conservation for
its own use the up-front capital plant cost (per dollar saved annully) is
what kills most projects, even if lifecycle costs are attractive. 

Often a two year payback is required because: a) who knows what will happen
between now and then (risk) and b) "opportunity cost" associated with
plunking down large sums of capital for an unamortizable cash is percieved
as unacceptable.

Final notes: I am not the one making the rules and setting criteria of
merit, I may not even agree with the way business views conservation.  I
prefer efficient energy use and reduced/no pollution.  When I refer to cost
I mean DIRECT cost, not including enviro effects.  If you want to add that
to the calculus feel free.  

Jim (business as usual)

--*--*--*--*--*--*--*--*--*--*--*--*--*--*--*--*--*--*--*
  List sponsored by CREST/REPP  
	http://solstice.crest.org/   http://www.repp.org/