New NBER paper shows Weatherization Assistance Program
BenWilson
| Posted in General Questions on
Has anyone had a chance to check out this report?
http://www.nber.org/papers/w21331?utm_campaign=ntw&utm_medium=email&utm_source=ntw
The link is only to an executive summary, the article itself is gated. I have a full copy that I’m reading through now. If true, the -9.5% rate of return is really a bummer, and hopefully says more about some weaknesses in the DOE program than it does about EE work in general.
Any thoughts
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It's a skewed political piece with an inappropriate title & conclusions. It has been covered at some length on this site behind the GBA Prime pay wall, as well as the sneak peek:
https://www.greenbuildingadvisor.com/blogs/dept/musings/gba-prime-sneak-peek-weatherization-cost-effective
Cherry picking a natural gas price that is near the all time low and projecting that as a flat rate forever is truly pathetic, not worthy of competent financial analysis. Can we try a high/low/middle energy price inflation /deflation analysis, please? How about assigning a hedge-value? Within the past decade retail price of natural gas has been more than 50% higher than the recent years' rates that they are projecting to remain flat for the next two decades, completely ignoring the market dynamics of natural gas:
About 25% of the gas currently going onto the gas grid in the US is coming from fracked OIL wells, and without a high oil price those wells are not profitable, and the drilling rates have crashed with the recent oil price crash. Those wells are 95% depleted within three years. With the looming prospect of lifting sanctions on Iran, the price of oil may go even lower, and stay there for awhile. The odds of natural gas price staying this low for even five years is a dubious prospect at best, and over 20 years it's insanity.
They also discovered (as if it were really news) that the quick & dirty energy audit tools in popular use overestimate actual energy use, and set exaggerated expectations on percentage savings, but then go on to compare the actual savings to the tool's predictions as if that were somehow relevant.
So sure, many retrofit programs don't break even if the natural gas prices stay at or near all-time lows, and programs could use better auditing /assement procedures before diving into the most expensive retrofits. So what? This is not news.