Going Green as an Investment Strategy

There are many environmental benefits to a housing model of on-site power generation, energy conservation, and alternative water use.  And it turns out, it’s not such a bad investment!

For the Earthship Biotecture model of green building, the only utilities needed are rainwater and sunshine, provided for free by nature.  These extreme-green buildings are totally off-grid, for energy, water, and wastewater.  The utility bills are essentially $0.  For growing families, retirees, or anyone else on a limited budget, that’s a big plus!  For those considering doing green retrofits, it’s an interesting challenge to incorporate similar “green” elements into an existing house, both for the environmental benefits and the financial ones.

No utilitiy bills for earthship biotecture building in Taos NM

Look Ma, no utility bills! Earthship Biotecture building in Taos, NM

For typical houses, utility costs vary quite a bit, of course, by the house, the residents, the region, and the utility company.  But let’s assume that between water, sewer, gas, and electric utilities for a house, the average cost is more than $165 a month — more than $2000 year.  And let’s assume it’s possible to either completely unplug from all these utilities, or at least reduce the annual bill by $2000 a year through a green retrofit.  While that type of retrofit might be an interesting science project, would it be an extravagant waste of money?  How much could one spend on the retrofit and get a good financial return?

To earn a perpetual annual income of $2,000 from an investment getting 5% return, that requires an investment of $40,000.  But saving money is a better investment than earning money, because you don’t have to pay taxes on money saved! A penny saved is more like a penny-plus-a-third earned — depending on your tax bracket.  To pay that $2,000 a year utility bill from taxable income, you need to earn around $2,500, which at 5% would require a $50,000 investment.  So if you think 5% is a good rate of return for an investment, then you could justify spending up to $50,000.

But wait, it gets better!  There are rebates, tax credits, and tax deductions available for many of these green investments.  That $50,000 investment might only end up costing $40,000.  So that 5% rate of return, just became 6.25%.

And what about utility rate increases?  Most likely, utility rates will increase faster than the rate of monetary inflation. To meet new regulations, catch up on deferred maintenance, accommodate development, and encourage conservation, inflation-adjusted utility rates could easily double just over the next decade.  So 10 years from now, that $40,000 investment would be earning the equivalent of $5000 a year — or a 12.5% return on investment.  Not too bad for a low-risk investment with a high-yield for a sustainable future!

Shades of Green: Measuring Success in Sustainability

How green is your sustainability project?  Says who??

In the field of sustainable building, rating systems and certifications have been springing up in abundance in the last few years.  There are so many systems for measuring “green” that it’s hard to know which one to use.  All offer extensive checklists, weighted points for doing different things, and require applications and large payments to get their certification.  All have standards for both new construction and retrofits of existing buildings.  Going through the certification process earns the building owner public-relations kudos and maybe a link on the certifier’s website.

Here are the sustainable building rating systems used which I have found so far to be commonly used in the United States:

LEED (Silver, Gold, Platinum) – Developed by the US Green Building Council in Washington DC, LEED (Leadership in Energy and Environmental Design) is perhaps the best-know rating system in the US.

Green Globes Green Building Initiative – Coming from the UK to the US via Canada, the Green Globes system of 1 to 4 offers “a streamlined and affordable alternative to LEED”.

BuiltGreen – A local Seattle-area rating system developed by the Master Builders Association of King and Snohomish Counties using 1 to 5 stars.

Passivhaus – PHIUS+ projects follow a German standard for airtight super-insulated buildings for ultra-low energy use.

Net Zero-Energy Building and Living Building Challenge are two related standards developed by the International Living Future Institute.

While many of these rating systems have a lot in common, proponents of each of these approaches seem to occasionally have differing and sometime conflicting opinions on what is or is not sustainability.  Behind each certification system is a different philosophy with slightly different priorities.

Shades of green

Shades of greens near Rifle, Colorado

Fortunately, as nature shows us, there is room in this world for many shades of green.

Earthship Biotecture: The Quintessential Green Building

Many different types of “green” buildings have been developed since the dawn of the environmental movement and it seems new design concepts are springing up every day.  But so far Earthship Biotecture continues to win my personal all-around sustainability award.  Invented by Michael Reynolds and evolved over several decades, the earthship form of building gets high marks in just about every category of green. Building materials are recycled, renewable, local, low-energy-use, and non-toxic.  Building energy is renewable, energy use is extrodinarily efficient, and water-use efficiencies are off the chart.

Earthship biotecture

An earthship in Taos, New Mexico at the Earthship Biotecture company’s visitor center

I consider earthships to be the quintessential green building form.  Beyond “net zero”, they are totally off-grid in every way — power and water systems.  The combination of passive solar and heat-storing massive ground-insulated walls solves the problem of space heating simply and inexpensively.  The rainwater collection and grey-water recycling systems provides abundant water in even dry climates.  Wind and solar electric systems easily power the lights and appliances.  Best of all, the technology and building technique for earthships is simple enough for motivated people to build themselves, inexpensive enough for the developing world, yet they can be elegant enough for the most sophisticated tastes.

From what I know about earthships, the main drawback is that they tend to need large building lots, which makes them well-suited for remote, rural, or suburban areas, but not so well-suited for dense urban areas.  And that means being dependant on cars for transportation.  If I wanted to live in an area where the house lots are large, I would definitely consider building an earthship. But I love the convenient walkable lifestyle of the in-city neighborhood, where a car is rarely needed.  I just can’t see an earthship working on a 35-foot-wide urban lot.   And when it comes down to it, I love my craftsman bungalow and the traditional neighborhood setting and would be sad to leave it!

While an earthship may be in my future someday, it won’t be in the near future.  In the meantime, I will have to settle with doing a sustainability refrofit on a stick-built house on a 35-foot lot.

What Does “Green” Really Mean?

We hear this term “green” in so many advertisements and communications.  It seems everyone is being encouraged to be more “green”.  But what does “green” really mean?  I think of being green as making conscious choices to do what seems to have less impact on natural systems than the standard practices of the day.  It means taking steps to use less energy, burn less oil and coal, send less garbage to the municipal landfill, and cause less loss of wildlife habitat, and using resources at a sustainable rate.  When it comes to house construction and remodeling, it can also mean using fewer toxic materials which might affect indoor air quality.  To “green” (using it as a verb), means to consciously weigh each of these factors when considering every element of a house.

In the spirit of a environmental science project, I will try to “green” every element of my house:  interior finishes, electrical use, space heating, water heating, refrigeration, cooking, water and waste water, food production, solid waste, landscaping, wildlife habitat.

Another different but common use of the term “green” relates to economics.  Green is the color of money.  The environment and the economy have an inherent relationship.  So another element of sustainability in the Green My Bungalow project is financial.  Whatever “green” improvements are made, they also need to make financial sense.  But in the spirit of going green, I’ll need to also think outside the box of conventional wisdom in financial justification.  I will apply long-term, systemic, sustainable thinking to the financial side of the equation.  I have to beleive that if it makes sense for the sustainability of the natural environment, it must also make sense financially, one way or another.

An Extreme-Green Vision for a Classic Craftsman Bungalow

These days, being “green” is the popular thing.  I know I am not alone in wanting to save the polar bears, end the oil wars, and make room for another billion or so people on planet Earth.  Being green is the right thing to do.  Ideally, a more sustainable use of resources should also be more economical.  But what exactly does it mean to be “green”?  And what can I do to significantly bring my life in line with principles of environmental sustainablity? — far beyond curbside recycling and reusable shopping bags.  There must be something more I can do!

What if affordable technology exists right now to live an extremely green life?  What if I could have that green life right where I already live — even if that is a century-old house?  What if my home could be transformed into a cutting-edge model of sustainability — without compromising its 1920’s charm?  What if I could prove that a lifestyle of low environmental impact also makes good financial sense?

The search for answers to these questions have lead me to research and explore any and all options for acheiving a significantly greener life.  This blog is dedicated to sharing my explorations as I go, in hopes of inspiring others and also attracting new ideas, resources, designs, and strategies for my project.  All good ideas are welcome!