Lessons From Today’s Economy

When making a commitment to switch to renewable energy in your life, the factor most often cited for delaying the switch is the upfront cost of installing an alternative energy generating system.  This is understandable, especially given the large amount of press coverage from the days when solar panels were VERY expensive and no tax credits existed to help a homeowner out of the financial hole created by purchasing fifty grand worth of panels.  However, these days it is possible to jump start your energy generation renovation without breaking the bank.

Of course, when you’re struggling just to keep up with this month’s gas bill, any additional expenses can seen like an insurmountable burden.  This is the case with many homeowners today, who are just trying to stay afloat with huge mortgage payments and utility bills.  Which brings me to my lesson of the day.  You see, there is a paradox in today’s world that goes something like this: when times are good, you don’t look for alternative solutions to problems because you have the leeway (read cash) to do things in the relatively inefficient way that you’ve always done them without breaking your bank account.  When times start to get bad, people don’t invest in alternative solutions because our natural human tendency is to imitate the ostrich, complaining about the squeeze but doing nothing to change the paradigm which produces said results.  The head in sand approach carries us through until Phase Three, the collapse of market sustainability.  Did we really think that our financial woes started yesterday with the mortgage crisis?  No, it’s been coming on for years, while we all sipped margaritas by the heated pool and pretended we could really afford the cars in our driveways. At this point, survival becomes king and all innovation gets laid by the roadside unless it costs practically nothing to implement.

This is the situation we find ourselves in now.  Another winter looms dark and cold in front of us, but in the struggle to keep up with growing bills and shrinking wages and savings, we feel we can no longer AFFORD to make the investments required by alternative energy, regardless of their future value.  Which is a shame if you ask me, because this is potentially the BEST time to get into generating alternative energy.  Not only have the renewable energy tax credits been renewed and expanded at a national level, local solar and wind initiatives are cropping up across the country that offer innovative ways to finance the switch.  Here in Los Angeles, Mayor Villagarosa announced a couple weeks back a new solar initiative which calls for installing 500 Mw of solar power on city-owned rooftops, a huge investment in concentrated solar power generation out in the Mojave desert, and a residential solar rooftop program that together promise to make the program the largest municipal solar program in the country, if not the world.  Home efficiency products like computer-run zone control systems are also experiencing a renaissance of innovations which are bringing the price down into the reach of the masses.  But alas, most homeowners are so deep in the hole that we risk losing many of these innovations to crippling financial woes within the small business sector as no one implements their ultimately sensible technologies.

Where does this leave the individual investor?  Well, let me say this.  Our inability to seek change when we have the financial capabilities to do so undermines the entire potential for distributed alternative energy generation.  If you are having trouble with your mortgage today, the time to invest in solar was a few years back when you still had cash in your bank account.  If you’re still sitting relatively pretty today, now is the time to invest, not a year from now.  You see, there are several alternative energy technologies which are eligible for tax credits and also have a relatively fast breakeven point.  Take solar hot water heating, which costs little to install and in most climates can easily provide most of your home water heating needs.  The federal tax credit allows for a 30% rebate on the total cost of installing the sytem.  This no-cap rebate is by far the best offer that the federal government has ever made to homeowners wishing to adopt alternative energy.  So take them up on their generous offer BEFORE everyone, nation included, runs out of funds to support the program.  Those who installed their systems years back are now enjoying minimal heating bills while the rest of the country shivers up to their fireplaces hoping heating costs go down.   (Which, incidentally, they have recently, but only due to total financial collapse, and that’s no prize!)

Housing starts are at an all-time low right now, but for those considering building a place, radiant heating is another option which makes imminent sense for a small up-front investment.  By heating water using solar power which is then pumped through pipes within the flooring material, your cold winter morning runs to turn on the shower will be replaced by a nice warm stroll over to the tub across your new radiant heat floor.  All for adding a few extra pipes in the concrete foundation you already planned to pour.   To me, with my childhood memories of shivering in bed and calling out to my bro to turn on the shower and let it heat up before I would venture out of the covers, that alone would raise the quality of life immensely. And for those who already have a structure in place, you can use the same concept for radiant wall heating for far less upfront expense than retrofitting a floor.

But back to the lesson at hand.  If you have been lucky enough to plan your finances well enough not to be irrevocably hurt by this impending crisis, you are in a uniquely great position to further the market for alternative energy here in the US.  As it stands right now, though the US is the largest producer of solar panels and wind turbines in the world, most of the product produced is shipped abroad to places with a stronger national investment in alternative energy than our domestic programs.  As the incoming administration plans to shift some traditional manufacturing sectors over to producing more renewable generation equipment, we need to uplift the market here in the US so that it becomes cost effective for emerging US companies to sell to US customers rather than simply shipping abroad.  If you can afford it, making the switch to alternative energy will not only help your pocketbook in the long run, it will help our nation’s crippled financial system learn to walk again.  And this time, we can take green steps toward to future instead of our previous dirty footprints.

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