The Plowboy Interview with Amory Lovins
(Page 11 of 15)
November/December 1977
By the Mother Earth News editors
PLOWBOY: But really, isn't that a lot to ask of, say, Consolidated Edison? Why would Con Ed want to help its customers buy solar heating equipment?
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LOVINS: I think there's an incentive for both parties. The incentive for the homeowner is obvious: He or she stands to save money and become a bit more self-reliant. The incentive for Con Ed is threefold: First, they'd have to raise a lot less hard-to-get capital this way than if they didn't loan you the money ... because in the latter case, they'd have to build another power station or coal gasification plant or whatever, and they don't know where the money's going to come from to do those things. Second, the payback time on your investment is much shorter—several times shorterthan it would be on Con Ed's investment in a new power plant, so they can turn their money over several times in the same period. Third, a capital transfer
... it's very simple to store low temperature heat with rocks or water. There might be more elegant ways to do it, but you don't need them.
scheme would help Con Ed avoid social obsolescence and make good use of its existing facilities during the transition to a soft path.
So you see, this kind of thing can be a good investment for utilities to get into. It's a better investment than what they're doing now. That's why, for example, Michigan Consolidated Gas Company has joined forces with other gas companies in setting up capital transfer schemes that have already led to the insulation of over 100,000 roofs. It's less expensive for them to do this than for them to find new fields of gas.
PLOWBOY: All right. So we already have the technologies we need to make the switch from a hard to a soft energy path. You've shown that energy storage is not a major problem with soft technologies. And you've suggested that soft technologies can be made economically attractive.
LOVINS: Indeed, some technologies are economically irresistible. Take electrical cogeneration, for example, which is where you tap the process steam produced by industry to do some other job ... and then also use that steam to make electricity. There's a Dow study which says that by 1985, U.S. industry could meet about half its own needs for electricity through cogeneration and that— furthermore —such a plan of action would save $20 to $50 billion in investment, conserve the equivalent of two to three million barrels of oil per day, and obviate the need for f if ty large nuclear reactors!
PLOWBOY: Well if soft technologies are really this attractive, why do we stand here confronted—as Pogo said—by insurmountable opportunities?
LOVINS: I think the reason for that is what—in the trade—we call "institutional barriers", many of whom live in Washington. Institutional barriers make a long list. For instance you have outdated building codes, mortgage regulations that encourage inefficiency, fee structures that give building engineers a fixed percentage of the price of the heating and cooling equipment they install, inappropriate tax laws, imperfect access to capital markets ... I could go on and on.
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