A Future I am Worried About by Arthur Woolf

    The Burlington Free Press continues to give some of its most valuable real estate to stories on global warming and what Vermonters can do about it. This Sunday, the page one article above the fold was titled The Future Lives Here. I hope not.

    The article featured a new development in Hinesburg with homes that are extremely well insulated, use new building and energy technologies, and essentially take no electricity from the grid. This makes them “net zero” homes, which are energy self-sufficient. That all comes at a steep price.  At $425,000 to $450,000 for a 1,600 to 1,800 square foot home, the article notes that these houses are 50% more expensive than the average-priced new house built in Chittenden County, which cost $333,500. But they are probably even more expensive than that.

    Nationally, the median-sized new house built in the Northeast was 2,400 square feet, according to this Census Bureau report. There’s no reason to expect that the average new home in Vermont is much different (we don’t have any data on new home sizes for Vermont). So these people are paying 50% more for a smaller than average house. Assuming the $333,500 average new Chittenden County home is correct, that means the average new home in Chittenden County cost $140 per square foot. The net-zero homes cost $240 per square foot or 70% more than a standard house.

       These houses are estimated to save $800 in electricity costs and $2,000 in heating costs annually. Let’s call it $3,000. But the house costs $70,000-$80,000 more than an equivalently sized standard home. A homebuyer could take that $70,000, invest it at 8% and get a $5,600 annual return. Foregoing $5,600 to save $3,000 does not sound like a very good deal to me.

    The article did note that the people buying these homes recognized the additional up front cost and were willing to pay the steep price because of the long-term benefits. Most of the buyers seem to be well-off retirees making their own decisions about how to spend their money. I hope no state legislator, local planning commission member, or policymaker thinks that this is the best way to reduce the carbon-creating impact of heating new houses, although two of the homebuyers are members of the Hinesburg planning commission, so maybe they do. Energy-efficiency mandates on new homes will not only raise the price of new homes, they will also raise the price of all existing homes, exacerbating the housing price problem in Vermont. 

    So should we just ignore the impact home energy use has on the global environment? No, but we can ask how we can achieve a goal of reducing carbon emissions in newly constructed homes (or any home) at a lower cost. There are many technological solutions and regulatory policies that are available that would reduce the carbon impact of heating houses far more cheaply than these net zero homes.

    Vermonters usually heat their homes with oil or LP gas (some use natural gas or wood). These emit carbon and (except for wood) contribute to global warming. Our baseload electricity comes from hydropower (HydroQuebec) and nuclear (Entergy Vermont Yankee). Neither contributes any carbon to the environment so if we could use that energy to heat our homes, wouldn't that be nice.

    Fortunately, a simple technology that has been around for a long time does that.  It is to use electricity to heat a thermal mass (bricks, for example) in the basement of a house when electricity is cheap (see page 9-8 on the link) and is generated by non carbon sources. That means power genrated at night, when both Vermont Yankee and HydroQuebec have lots of unused capacity. During the day, the heat stored in the thermal mass is circulated through the house. The result is a warm house with no carbon being emitted into the environment. The technology is here and is not that expensive--certainly not as expensive as these homes. The regulatory change needed to make this happen is to price electricity during the nighttime hours at its true cost, which is very low, and give consumers the appropriate price signals.

    And while we are at it, pricing electricity at its true cost during the daytime and nighttime would encourage people to turn off appliances (electric water heaters, clothes dryers, hot tubs) when electricity is expensive (and generated from power plants that emit carbon) and turn them on at night when electricity is cheap (and when it is generated from non-carbon sources).  Some utilities are already doing this and pricing residential electricity by the hour (see here,  here and here).  If Vermonters are serious about our state taking the lead in combating global warming, why not use market incentives and regulatory reform to accomplish these goals at far lower costs to consumers than the energy efficiency mandates that are likely to come from Montpelier.

Comments

[Judy Livingston]

How refreshing - common sense.

[Pres Sloterbeck]

Why don't you ask Bob Young of CVPS and the head of Green Mountain Power etc to publish Art Wolff's article in their monthly letter which accompanies the monthly bill?

[Thomas Trevor]

Where can I find that investment that pays 8%?