Energy Efficiency: A Financial Investment For Tough Times

Making money in this era of low interest rates is hard. Good returns are fleeting, and it seems there are few safe harbors.

But there is one investment that is rock solid. It's not a traditional savings vehicle, however. And it is not so much earning money as saving money. But, really, what's the difference? It all goes straight to the bottom line.

You won't find a mutual fund of energy-efficiency measures, but if one existed, it likely would be outpacing other investments. Cutting your energy bill - which in my house is the second largest monthly expense behind my mortgage - can reap substantial rewards.

Heck, just shutting off one computer when it wasn't being used and replacing a desktop with a laptop saved this scientist $100 per month. That equates to a $1,200 annual windfall, and the knowledge he gained will save him thousands of dollars over the life of 30-year mortgage. He recouped the price of the laptop in a relatively short period - and, because those savings continue, got a gift that keeps on giving.

Over three years, the scientist, David H. Bailey, also installed a new pump on the pool, switched out lights and replaced energy-guzzling appliances. His monthly bill shrank from $400 per month to $50.

That's a reduction of 87.5%. Unbelievable!

A recent energy audit of my 1,400-square-foot, 18-year-old house near Clovis High School uncovered some leaks, and recommended $1,700 (after rebates) of upgrades that would cut my bill about $50 per month. That's a three-year payback, and a savings of $9,000 if we live there 15 years beyond that. Is it worth spending $1,700 to save $9,000 over the long term?

Let's look at it another way. I would need a 9% yield from a traditional investment to get the same return over 18 years from my one-time contribution of $1,700. I don't know many (legal) investments with those kinds of gains.

Still, energy efficiency, which the federal government calls the "low-hanging fruit" of the clean -energy movement, doesn't garner the headlines of renewables such as solar and wind. But saving money is something that all political parties could support; a national efficiency campaign could save billions of dollars.

In Fresno, where I live, city officials crunched utility data and concluded that a communitywide energy reduction of 30% would equate to a $260 million economic boon. Read more here.

Repeat that nationwide, and you have economic stimulus anyone can support.

Photo of power station.