What are the costs of “going green”?

We’ve always viewed lulls in work as opportunities to expand and upgrade our headquarters. In January 2009, we enclosed the north stairwell so that people did not have to enter the second-floor offices through the warehouse. However, we could not begin to use the stairwell because, having completed the electrical rough-in, we learned that we had maxed out our electrical service and possibly the electrical transformer at the street. To increase the electrical service would cost thousands of dollars – and to install a new transformer, tens of thousands.

I wanted a better idea than simply “More power, Scotty!”

Three months ago, an electrical contractor recommended photovoltaic panels on our roof. This would save the cost of the upgraded electrical service and replacing the transformer. The federal and state governments offered sizeable tax deductions to encourage this step in “going green.” In addition, PNM would buy any power our solar panels produced that was in excess of our needs. So the panels would generate ongoing income.

Invest $160,000 and receive a first-year tax credit and depreciation of $60,000. Total out-of-pocket costs: $100,000, recovered in approximately ten years of operation. After that: free money from PNM. Who could lose on this deal?

But: the addition of solar panels would reclassify our headquarters mortgage into a non-conforming loan. The higher interest rate wiped out the money generated by PNM buying our excess power.

There had to be a better way. Our building was constructed in 1998, before significant technological improvements in energy efficient devices. Could upgrading our electrical fixtures save enough energy to enable us to use the north stairwell?

This week we met with another electrical contractor, and reviewed our current power demands; new, energy efficient light fixtures; and the rebates earned for upgrading to them. I believe this will prove to be the best, most workable solution for now. With any luck, we’ll get to use our not-quite-so-new-anymore stairwell.

Kermit the Frog was right: “It’s not easy being green.” For example, the new energy code being adopted by the state of New Mexico will require that energy efficient light fixtures installed just two years ago must be replaced with new, more efficient light fixtures whenever a renovation occurs. The old fixtures must be thrown away. How long – if ever – will the energy saved by the new light fixtures compensate for the energy used to manufacture them? Similarly, in many cities, the energy saved by recycling programs does not compensate for the energy used by an additional truck picking up recycling bins.

We like to think we’ve become more sophisticated about energy in the past half-century. We no longer trade in our cars when they only need new tires and tune up – or when we want a car with bigger fins. But many attempts to encourage or legislate “going green” just aren’t well thought-through. And some are downright environmentally irresponsible.