WAVE-B $50 Energy Project

Is paying more for the same rental car on a trip smart? Is paying for insurance offered by the rental company smart when your car insurance covers rental vehicles ? Many people have rental car insurance on their main policy to reduce their costs and reduce the inflated rates of the rental car companies insurance. What does this have to do with the cost of operating a house? Like the rental car situation above I think I can reduce the operating cost of my house by investing in cost savings up front to save long term.

We live in the information age and I think it would be a shame to not take advantage of ideas out there to reducing operating costs of my house. I tend to think of this kind of investment as reverse mini-pension. Pension retirements pay continuously after you work for a company or government.  Continuously you don’t pay for energy you don’t use; in addition energy you don’t use is tax free.

 

Typical Ranch House

 Typical Ranch House

This is the birth of the “WAVE-B $50 Energy Project” . The idea is to cut consumption of my household energy to $50 US per month without any drastic changes in lifestyle.  Why so aggressive a goal as $50 Energy use a month?  This may be unrealistic but, I think striving forward on this goal will reap many benefits. It forces me to look at the house as a total system rather a group small project. Sometimes by pushing the envelope you become creative and sometimes the creativity helps you reach your goal.

My Starting Point:

 The 3 bedroom 2 bath house was built in 1959 and had gas central heating and all other appliances were electric. The average energy bill for the house when we purchased it was about $400 per month between the gas and electric. This is $4800 per year in energy. I have a tendency to look at reoccurring costs like this over long time periods. Below is the breakdown of the costs over different time periods:

Long Term Operating Costs

1 Year – $4800

10 Years – $48,000

15 Years –  $72,000

20 Years –  $96,000

30 Years –  $144,000

I have a confession; I did unofficially start on this project before it was a project. We had a failure of the central air heating and cooling unit one year after we purchased the house. This forced our hand as what to do. The choice we made was three fold. We changed our central unit to a heat pump which is more efficient than a traditional heating and air unit. The unit was moved from the crawl space to the attic to reduce humidity in the house, and lastly we opted for all electric solutions so no need for natural gas. I especially liked this because there was about a $30 a month utility hook up charge just to be hooked up to gas whether you use any or not. In the summer we use zero gas due to the only thing hooked up was heating.

Before the move to all electric here is the approximate costs:

Natural Gas Bill Average :$200

Electricity Average : $200

Total Energy Average: $400 per month

StartHausOperating

After the new central air unit here are the approximate cots:

Natural Gas Bill Average :$0

Electricity Average : $250

Total Energy Average: $250 per month

Here is the comparison:

HeatPumpOper

The cost of the move to the heat pump was about $7,000 so the return on investment is 3.8 years before any real savings happens. The monthly difference is measurable. The cost was not financed so the savings are real. The actual unit replacement was about $3,500 without the prep for the attic and the whole ventilation piping replaced. (The choice to move the central air to the attic was not needed but added to the costs.)

 

T_Roosevelt

“Do what you can, with what you have, where you are.”

Theodore Roosevelt

Evaluation-

  1. List the utilities used at the start
  2. List the uses of all the energy sources
  3. Collect the rates of the energy used
  4. List other possible energy sources
  5. List possible alternative to uses of energy that are more cost effective
  6. Define the budget to invest in the project

Planning-

  1. Utilize the 80/20 rule to prioritize to the tasks with the most bang for the buck – create a Hit List
  2. Highlight the items that fit into your budget
  3. Pick one step to get started on based upon within the Budget and Return On Investment
  4. Collect the funds for the initial costs
  5. Consult with someone more knowledgeable in the task at hand (subject area expert)
  6. Look for low hanging fruit; try to lineup quick and cheap tasks with returns right away

Implementation-

  1. Purchase materials; this includes labor if needed
  2. Install change; keep looking for opportunities of improvement of the task at hand
  3. Complete and reevaluate the process to see if there were tasks that could have been done differently

Wash, Rinse, and Repeat-

  1. Create a savings account for the plan
  2. Deposit the task savings per month after completion in the plan savings account
  3. When the money reaches the level to cover the costs of the next item on the Hit List move forward on that task
  4. After each task has been completed deposit the per monthly savings in the plan savings account. The savings deposited per month should increase after each task completion. After a few tasks there should be some noticeable traction.
  5. Repeat until operating costs are below $50 per month

 

 

 

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