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Thread: Illusion of Recovery – Part I: Print and pray has officially failed - Eric Janszen

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    Default Re: Illusion of Recovery – Part I: Print, spend, and wait has officially failed - Eric Janszen

    Quote Originally Posted by dcarrigg View Post
    The benefits should be designed to outweigh the costs of financing work up-front.

    This way a project is financed through projected monthly energy expenditure (operational) savings with no (or little) cash outlay by the entity ordering the work to be performed.

    This can be done in the residential and small commercial sectors through utility-based on-bill financing and ESPCs in the large commercial, industrial and .gov sectors. They function as the financing mechanisms, with kWh savings guaranteed (assuming one has a proper contract) by the ESCO.

    In this way, energy infrastructure can be upgraded faster than one would imagine without requiring much up-front cash. There is still loss to finance charges, and downside risk if oil/electricity/etc. drop significantly in price, but mechanisms to spur rapid investment that pay for themselves, plus offer a good chance for additional financial benefit, do exist.

    Of course, this works best with relatively vanilla activities (insulating, retro-commissioning, replacement of older furnaces/boilers etc.) It also requires more sophistication in contractual agreements than many entities possess to ensure one does not get ripped off (there are a few third-party firms that do this - also for a fee).

    When an investment makes sense (has a positive ROI), as energy efficiency typically does, there will always be ways to accelerate adoption. Also see Fred's post above ^.

    And like similar espc programs, overwhelmingly used by governments since business will make roi investment themselves, the roi, if any is achieved without creating functional problems, goes towards further growth of bureaucracy or keeping alive bureaucracy that should not be operational in the first pace. Presumably there is some mechanism for government projects to deliver roi to the broad economy? How would this work? Hypothetically if the government built a nuclear power plant to deliver cheap electricity would this not be built at a premium to a non-stimulus project and therefore require additional subsidy to keep prices competitive? Why not just make select private utility and energy companies public? They already have the infrastructure or can more easily build. My hunch is all these "solutions"will not work in the long run or will create new "public"problems or subsidize select favored corporations at the expense of small business and innovation. The only solutions from public spending fix problems made with public policy in the first place. Maybe we should build a new Panama canal? Space elevator? Grants for energy efficiency? The us had those in the stimulus.
    ,
    Last edited by SamAdams; 09-03-11 at 06:38 AM.

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