What would you say if you found an investment that offered an annual return of 60 per cent year after year? That it’s too good to be true? For the residents of the Monticello condominiums in Saskatoon, that’s what they earn from investing in an energy and water retrofit started in 2000.
Built in 1998, Monticello has 41 residents living in 32 two-bedroom suites. Electrical consumption for the common areas, hallways and underground parking garage cost $7,125 in 1999. In 2013, electrical costs would have been $10,360 given the rise in electricity rates over the years. Instead, the cost was $6,126, $1,000 less than in 1999 and $4,200 less than it would have been had the condo not introduced a range of conservation and efficiency measures.
The conservation effort started when condo president Frank Dietz met energy expert Rob Dumont in church. He invited Rob to come by and look at what the condo could do to save energy. The collaboration paid off big time.
What did Rob suggest? Not all that much, really. On the electricity side, replace the older incandescent lamps in the underground garage with efficient T8 fluorescent lamps and place motion controlled CFL lamps in the individual stalls. All the lights in the hallways and common areas, including exit signs, could also be upgraded to CFL and LED lights.
The total cost to carry out these retrofits was $4,484, but the savings between 2000 and 2013 were a whopping $42,400. An added benefit is lower labour costs for bulb replacements since CFLs last longer than incandescent bulbs.
Doing the same retrofits today would be an even better investment, given the cost of CFLs in 2000 was $9.50 each whereas the current price is less than $2. Measures to save water cost more upfront but saved the condo owners even more money.
In 2008, the owners installed low-flow shower heads, aerators on faucets, low flow, dual flush toilets and timers on lawn sprinklers. The total cost of water saving measures was $11,000. Water use declined 46 per cent and by the end of 2013, 13.6 million litres of water worth $41,860 had been saved.
Still larger savings came from reducing heating costs. The condo’s hot water heating pipes passed through the underground parking garage uninsulated. This overheated the garage and the suites above it. The owners pitched in and wrapped all the pipes themselves. Pipe insulation cost $3,311 and saved $65,000 in natural gas for an average annual return on investment of more than 200 per cent.
Significantly, all these conservation and efficiency measures had no negative impacts on living standards. In fact, there were improvements. The temperature in the garage went from highs of up to 28 C to an average of 14, reducing overheating in the apartments above the garage.
The total cost of all the retrofits, for water, electricity and heating, was $19,100. Gross savings were $149,000. Net savings were $130,000, which translates to a return on investment of 780 per cent or 60 per cent per year.
Let’s not forget that the good folks at Monticello were also reducing their ecological footprint at the same time by cutting water use and greenhouse gas emissions from heating and lighting.
How often have we heard that we can’t afford the high costs of reducing energy use and greenhouse gas emissions? Real world experience shows that conservation measures are a good investment: Are there any other safe investments out there that return 60 per cent a year?
What if the City of Saskatoon went all out to encourage citizens to cut water, gas and electricity use? Let’s fantasize a bit and imagine that an equivalent set of measures was applied to, say, 50,000 residences in the city.
The cost of conservation measures at Monticello was about $600 per unit, but net savings were more than $4,000.
The total cost to upgrade 50,000 residences would be $30 million, with savings of $200 million over a dozen years. Add to that all the benefits in job creation and avoided costs for water and energy infrastructure.
Are the environmental problems we worry about really opportunities?