The Finch Formerly Known As Gold

4 November 2007

Conspicuous non-consumption

A couple of years ago, I wrote up a short piece about a Zero Energy Home being built here in town, and I made this observation about the price:

[T]he target price is $199,000, which is on the high side for a 3-bedroom, 2-bath house with 1650 square feet, but the energy savings should compensate for that.

It won't happen overnight, of course: the payback period is measured in years, and anyway we have rather lower real-estate prices here than prevail in, say, the Twin Cities:

Peter Lytle has gone to extraordinary lengths to set an example. To show other people how to live in harmony with the environment and lighten their footprint on the Earth, Lytle has spent more than $1 million to buy and revamp a 1948 Minnetonka rambler as a "green" home.

By equipping it with four kinds of alternative energy and the best available insulation, windows and indoor air system, he has made it a lesson in how to operate an ordinary home with far less energy and expense.

Far less energy, no doubt. But "far less expense"? Let's ask Chad the Elder about that:

Let's see, they invested about $685K (at least) in making the home green. But remember, the water and energy bills will [be] a fraction of a traditional home. According to this Energy Analysis, the average annual energy costs for a home like this in Minnesota would be about $3200. Throw in another grand to cover water (easily) and you're at $4200. We'll bump it to $4500 just to leave a little wiggle room.

Then, just for fun let's say that this new green house completely eliminates all energy and water costs. In that case, it would only take ONE HUNDRED FIFTY-TWO YEARS for the homeowners to recoup their costs.

I believe the technical term for this is "cost-defective."

Of course, the buyer didn't do all this to save money: he did it to set an example for the rest of us poor slobs, which is far more important in the long run, right?

Posted at 8:57 AM to Family Joules

Quite a lot of "green" projects suffer from this disease. It's simply illegitimate to measure the success of a project such as this without proper attention to its cost -- and cost is almost always proportional to total energy expended, and to total waste generated as well.

There are some problems in this analytical space that arise because of Non-Recurring Engineering (NRE) expenditures. For example, if it were possible to equip a home with a micro-fusion generator that cost essentially nothing to operate, the true cost would have to include an aliquot of the cost of developing fusion power and micro-fusion generators in particular. (Got yours yet? I just love mine.) But at some point, we must regard the NRE costs as having been fully attributed; certainly, we no longer hold that the purchasers of oil-fired furnaces are paying to any degree for the development of oil heating technology.

The Lytle project, to attract significant interest from the millions of ordinary persons to whom it must be made to appeal if it's to amount to anything, would have to draw nearer to cost-competitiveness with existing technologies. Either that, or we'd have to run out of oil and natural gas. Place your bets; mine are on fossil-fuel technologies remaining the cheapest and most efficient, both in monetary terms and in total environmental impact, until well after you and I are safely and cozily dead.

Posted by: Francis W. Porretto at 11:05 AM on 4 November 2007

Which is why I was happy to tout the ZEH: the payback period wasn't exactly brief, but it was well within the lifetime of the structure, and, I calculated based on local averages, within the term of the mortgage someone might likely use to purchase it.

The fact is, of course, that the vast majority of us aren't in a position to plunk down a million for the sake of greenness, and if we were, there might well be more compelling expenditures in different realms entirely. What's more, the supply of all this greentech is still pretty limited: the local electric company is set to increase its wind capacity threefold or so — one thing we have a lot of out here is wind — but it will still be only a small percentage of the total power demand from their customers.

Posted by: CGHill at 11:14 AM on 4 November 2007

When I read descriptions of LEED-certified projects, all that boasting of reduction in energy costs and recycled materials, I always want to ask - and how much the construction would cost with normal, "virgin" products?
Consider this booklet, from US Green Building Council: it cost $53 mln to complete, $679 per sf - how much it would cost to the taxpayers if standard building practices were applied?

I guess I'll have to consult my $157 Guide for preparation for LEED certification I already ordered...have to move with the times.

Posted by: Tatyana at 4:58 PM on 4 November 2007

I'm sure LEED certification adds some cost, but it doesn't have to be prohibitive. I talked to Grant Humphreys, who's seeking a LEED label for the Block 42 residential project downtown, and he thinks that it's enough of a selling point to offset any potential higher cost. Twenty-five of the 42 units are already sold, months before actual move-in, so I figure he has at least some idea what he's talking about.

Posted by: CGHill at 5:25 PM on 4 November 2007

I guess all those poor slobs buyers DID get to follow example set by Mr. Lytle.

Posted by: Tatyana at 6:16 PM on 4 November 2007

The house that was built as a "green" lab home was designed with sensors, computers and by 250 individuals that made up 7 teams. Each team specialized researching and reviewing a portion of the Live Green project. It is unlikely anyone would ever need to spend this amount to build a typical green home. This home is a living lab and has in it a large variety of technologies (high and low) to evaluate systems and methods for green building and green living. To assume this is a typical green home and not a lab for education purposes is just wrong. Like the first electric car, wind turbine or anything else, first test models cost more. When we designed and built the house it was cheaper to put every concept into one location for study than build six homes. The information gained to date is posted at and is being shared with Universities, governments and builders. Please do not believe everthing you read about the project without visiting the web site for the actual details on the Live Green Project. Thankyou. Peter Lytle Executive Director

Posted by: Peter Lytle at 8:02 PM on 29 November 2007