Energy Investment Payback Is Critical to Conservation

Utilities may be more willing to make investments in energy savings than the average consumer. James E. Rogers, chief executive of Duke Energy, supports the idea of utilities covering the upfront costs of energy-saving consumer items—such as more-efficient but costlier air conditioners for people’s homes—and then adding a small fee to the customer’s electric bill as a return on the investment. Nancy C. Floyd of Nth Power, an investment banking firm that specializes in energy, notes that because utilities already have a relationship with individual home and building owners, they are well positioned to promote efficiency.

But so far, most utilities find it easier to stick to conventional ways of making energy rather than conserving it. Their eagerness to invest in low-return power generation projects, combined with consumers’ underutilization of high-return efficiency investments, has made U.S. energy consumption 20 to 40 percent higher than it would otherwise be, according to Ralph Cavanagh of the Natural Resources Defense Council.

Even so, there has been progress. Total U.S, energy use per dollar of gross national product (GNP) has been reduced by 49 percent since the 1970s, according to the Worldwatch Institute’s American Energy report. “Compared to a 1973 baseline, America now saves more energy than it produces from any single source, including oil,” the report notes. Still, U.S. energy use per dollar of GNP is almost twice that of other industrialized countries.

To learn about ways you can save energy and money, visit buyenergyefficient.org.

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