My Apparently Flawed Business Plan

[acropolis]

I’ll start with my question: Why isn’t this being done?

Obviously it requires context. So the topic is energy conservation. Obviously I don’t care about energy conservation. But I, like most people, like money, and I am all in favor of conservation to the extent that it requires no effort on my part and makes money for me. I was just reading an article in Scientific American about the huge savings involved in energy conservation, companies spending small sums of money to be energy efficient and reaping large annual savings as a result, or how he spent an extra ~5K on his house when he built it for solar panels and insulation etc. and earned it back in savings in something like 8 days (or whatever). The obvious implication being: why doesn’t everyone conserve energy like this so we could all be rich?

The answer to that is pretty clear; I don’t invest an extra 5-10K dollars into my house, despite knowing that it will eventually not only earn back its cost but also start paying out, for the same reason I don’t put an extra million dollars in my bank account when I buy my house (despite knowing it immediately earns back its value and begins paying out): because I don’t have the extra money. If I did, I probably would have gotten a bigger house. That and the fact that I don’t know anything about insulation/solar paneling/what have you, don’t care to learn, and my contractor likely doesn’t either.

But if such conservation steps have anywhere near the 20-30% return on investment the conservation elitists claim, then it seems an obvious investment opportunity. A company could just make the offer to individuals who are building houses to add all that conservationy crap in exchange simply for some portion of the savings. Perhaps the company gets all of the savings for X number of years, or there is some sort of split. Doesn’t matter. The key elements are that it requires no effort on the part of the clients (customers?) and it requires no money from the clients (meeting the criteria cited in paragraph one).

It would require capital to start, but that shouldn’t be a problem, there are plenty of rich lefties. It would be a pretty solid opportunity for them to put their many where their mouths are if they really believe that crap and perhaps get even richer in the process.

PS: I don’t think it would work for the very good reason that no one is doing it. I do think that if energy prices go up much more, this might become very viable though.

[sigrid]

I think even ppl who do have the money spare, wont think of it as first priority, somehow ppl dont care to much about environment and saving energy yet.

[Dead_Meat]

So, let me get this straight.

Person A spends $2000 a year on energy at his house.
Acropolis Inc lends Person A $10,000 on the basis that Person A's energy bill will reduce by 25% and Acropolis Inc receives 50% of that saving for x number of years.
Person A has energy saving devices installed.
Person A buys a hot-tub and several sun-lamps, knowing that the cost of the energy to run them will be covered by the savings allowed by Acropolis Inc's generosity.
Person A's energy bill stays at $2000
Acropolis Inc goes bust.
Person A sells energy saving devices.
Person A profits.

GD giggles.

[sigrid]

Originally Posted by Dead_Meat

So, let me get this straight.

Person A spends $2000 a year on energy at his house.
Acropolis Inc lends Person A $10,000 on the basis that Person A's energy bill will reduce by 25% and Acropolis Inc receives 50% of that saving for x number of years.
Person A has energy saving devices installed.
Person A buys a hot-tub and several sun-lamps, knowing that the cost of the energy to run them will be covered by the savings allowed by Acropolis Inc's generosity.
Person A's energy bill stays at $2000
Acropolis Inc goes bust.
Person A sells energy saving devices.
Person A profits.

GD giggles.

lol

[xtrasyn]

It's really going on now, as some countries will give you 100% of your installation costs back and a fixed percentage on top. So buying a few containers of cells in Holland and shipping them to and installing them in Spain would actually make you a lot of money.

Don't ask me why I share this with you but I have three succesful businesses already so I'm too skinned to handle buying a few containers ATM and you guys may need a slice of action.

[acropolis]

Originally Posted by Dead_Meat

So, let me get this straight.

Person A spends $2000 a year on energy at his house.
Acropolis Inc lends Person A $10,000 on the basis that Person A's energy bill will reduce by 25% and Acropolis Inc receives 50% of that saving for x number of years.
Person A has energy saving devices installed.
Person A buys a hot-tub and several sun-lamps, knowing that the cost of the energy to run them will be covered by the savings allowed by Acropolis Inc's generosity.
Person A's energy bill stays at $2000
Acropolis Inc goes bust.
Person A sells energy saving devices.
Person A profits.

GD giggles.

that indeed brings up a number of this needing gotten straight. in the article, the author spent $5,000, and the savings weren't ~25% of annual energy expenditures, they were more than 100% (he was selling solar panel energy back to the power companies).

secondly, obviously the 'energy saving equipment' would remain property of the company, otherwise they would often be sold the next day. at least until the company went bankrupt and liquidated.

third, the amount remitted monthly to Acropolis' Co would be entirely independent of the monthly energy use of the individual. It would be an amount agreed to in advance based on estimated energy use with and without the relavant equipment. It could however vary with time as energy prices changed.

[roadrunner_0]

xtrasyn give me a job

[KoeN]

my business plan to conquer the world starts here.

i will start building my base next week.

[Dante Hicks]

The UK government already do this (sort of).

They give grants to the energy companies (probably in the form of tax breaks, I don't know) who then give grants to people like my employers. So for instance, we have installed cavity wall insulation in a couple of thousand of our properties and it's been entirely grant funded (i.e. it costs us nothing). We've also done quite a few loft insulations for 50% grant. On a very minor level we give out energy saving lightbulbs to all new tenants of ours (again, funded by central government indirectly).

Private owners in Britain can also appy for grants to insulate their homes in some cases.

So yay for all of that. However, there are a couple of drawbacks :

- It's not always clear what energy efficiency measure will work best, or is appropriate in which dwelling. We have a reasonable amount of information about the properties we own for instance and even we don't know without surveying most of the time. You can't do cavity wall insulation in a house with solid walls for instance. Solar panels sound cool and sexy until you realise a hell of a lot of dwellings have wiring that's well over 20 or 30 years old and would probably need to be completely replaced for any significant install.

So you have people like me sitting day in day out with really shit spreadsheets/programs trying to work out how and where to spend money in the best way to reduce the energy/carbon output of our housing stock. Admittedly I'm incompetent and lazy, but it's a fairly annoying task nonetheless.

- Even though energy efficiency measures do save money, it's not always straight-forward in working out how much money they save. The cheapest way of reducing energy (heating) consumption is almost always insulation (in Northern Europe at least, different in hot countries) which can be done quite cheaply in most cases. However, even there it can take two to five years to make the investment back (ignoring opportunity cost).

For other measures, it's much longer term. I think for us to replace a single-glazed window with double glazed uPVC windows it would take 20 years to break even on the install cost (although this is slightly unfair since there's other costs to be considered like repainting, maintenance costs).

When you get onto things like installing a new heating system then it becomes slightly complicated as you have to try to work out the average profile for that household in terms of how often they'd use a heating system, how often they require hot water vs the cost of a new heating system and that sort of thing.

[roadrunner_0]

i have been looking into insulating my house, apparently i can't get any grants because i'm not a disabled drug user with 20 children provided for entirely by the state

[KoeN]

on a serious note:

acropolis, i hope you do realise that it's possible to solve the money issue via agreements with banks. i'd recommend you to find info about the way the island of Samso (Denmark) managed to create an island that produces more (sustainable) energy than they use themselves. (incl energy-usage in transport!)

(in short: they made it possible to loan at the local bank, invest in stocks for local offshore windturbines. the profit they made with the stocks was more than the rent they'd had to pay to the bank).

i have more examples like this, could drop you a pm with urls if you're interested in it.
(i will complete my study structural engineering this year, and did a minor sustainable energy last year, so there's quite some relevant info i have etc. apparently we have the same 'business plan' ).

[acropolis]

The fact that such a company could probably earn their keep purely out of subsidies even if they didn't conserve whatsoever was something i intended to put in the original post and apparently completely forgot about.

will be edited.

[Ste]

solar panels aren't worth it in this country because the pay-back period is longer than the average life of the panel.

[KoeN]

Originally Posted by Ste

solar panels aren't worth it in this country because the pay-back period is longer than the average life of the panel.

solar panels can be worth it when the subsidy your government pays is high enough. (Germany, for example).

here in Holland only sunboilers can be worth installing.

[roadrunner_0]

to me, it sounds like a good plan, although i think that you would need quite a large start up pot as it would take you a while to start earning money back (even with subsidies) as i would imagine that you would have to have your own consulting staff depending on what people wanted etc, and probably your own installation staff etc

[Ste]

Originally Posted by KoeN

solar panels can be worth it when the subsidy your government pays is high enough. (Germany, for example).

here in Holland only sunboilers can be worth installing.

worth it for the individual but not overall. IE more energy is spent making and installing the panels than is saved by having them in use...

[KoeN]

Originally Posted by Ste

worth it for the individual but not overall. IE more energy is spent making and installing the panels than is saved by having them in use...

true, but that isn't the main issue now. (what kind of energy was used to produce the panels? how much energy would the producing + installing of a conventional installation cost? etc)

you can't possibly say it wouldn't be worth it overall because of the 'total picture' of energy-usage, as there are far too many factors to take into account to give a reliable statement.