Amory and Hunter Lovins: Spokespersons for a Sustainable-energy Future
(Page 7 of 15)
July/August 1984
By the Mother Earth News editors
. . . AND SOLUTIONS
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Fortunately, utilities can help finance the energy transition ... by acting in their own best interests. After all, to stay solvent they have to do more than cancel plants. They also have to turn their money over. And the only business we see that utilities can do at a reasonable profit is financing or otherwise participating in energy efficiency. A good way for them to do this is to provide loans at their own cost of money that are repaid out of the borrower's energy savings. Say I'm a utility. I loan you $4,000 for improvements that cut your power consumption by $1,000 a year. You then repay me $1,000 each year — or slightly less, so your bill goes down a little — for almost five years. At that point, you'll have paid off the principal and interest on the loan, and your bill will go down a lot ... permanently.
To put it another way, each of us has a small oil, gas, or electric "well" right in our house, one that can be tapped fairly cheaply. In fact, such investments offer some of the highest rates of return available in the entire economy.
Since we first suggested doing this, utilities with over half of the U.S. generating capacity have set up loan programs and proved that saving electricity is far cheaper than making it. The Tennessee Valley Authority has lent $300 million — at low or no interest — to insulate 400,000 living units. Utilities in at least four states are "buying back" saved electricity, just as they do generated electricity. Others will pay you rebates for purchasing more efficient appliances. Some utilities finance your energy savings without your having to pay them back.
Sometimes, a third party will finance an energy improvement for you ... just for a share of the savings! In New York, Independent Water Heating Systems, Inc., purchases solar water heaters for apartment houses. The group takes the federal tax credit savings plus 80% of the electricity savings the first two years, 50% the third year, and 25% the fourth and fifth years. After that, they sell the collector to you for one dollar and walk away!
Such groups and utilities are beginning to realize that efficiency and renewables are opportunities, not threats. In the long run, then, utilities are probably going to look like the phone company, back when there was a phone company. They'll be mediators between zillions of little, loosely coupled demand and supply elements, a distribution service connecting many dispersed users and sources.
Utilities now have a choice between cooperation and obsolescence. By choosing cooperation, they will act in their own best interests and help our nation finance the transition to a sustainable energy system. The benefits of a secure, affordable, and environmentally benign energy system-including savings of several trillion dollars before the century is over-could then be achieved before the fossil fuel bridge to it has been burned.
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