We're heading into an election season in which energy is likely to be a big topic of debate.  Whether at the federal or state level, you almost can't open up the paper (do people still do that?) without reading about the pros, cons or nons of each of our energy options.  Conservatives want to drill and generate with fission; liberals want to conserve and generate with fusion.  If only we could harness all of that rapidly warming air....

I'm not getting political here -- I'm a card-carrying member of the Solar Party.  All I want to do is spend less money on energy. If you're wondering how, the place to start is right at home.  In the United States, the residential sector consumes 22% of all energy (by comparison, cars use about 17%).

But don't ask the government or your utility how you should reduce your home energy bill.  The energy savings measures they will generally recommend are weatherizing (i.e., cash for caulkers), installing new windows, insulating attic and wall spaces, insulating and sealing ductwork, upgrading HVAC systems and installing new energy-saving appliances.  Unfortunately, this advice has more to do with old-fashioned energy philosophy instead of dollars in your pocketbook.  Don't get me wrong: these retrofits will save some energy, but maybe not as much as you think based on your home's particular location and condition.

It is fairly straightforward to perform a home energy audit to determine the fastest payback retrofits for your home.  The DOE's Home Energy Saver program is an excellent web-based tool -- and it's free.  Here are the results for a typical 2,000-square-foot house built in 1975 in San Jose (corrected for marginal utility rates, retrofit costs and local incentives):

What does this mean for a typical house in San Jose?  First off, you should upgrade your lighting with CFLs (and in the future, LEDs).  Second, add a bit more attic insulation. Third, install a rooftop solar array.  Fourth, do whatever you can to reduce the electricity consumed by appliances and gadgets in your house.  Before you think that these recommendations are biased because I'm a solar nut, try running this analysis on your own home to see if the "conventional wisdom" about energy retrofits applies to your house.

This energy retrofit conventional wisdom -- weatherize, improve the building shell, upgrade HVAC systems -- leads to very long paybacks in temperate areas of the country (where you don't need a lot of heating).  These conventional retrofits also have long paybacks in cold areas if the home is relatively new or in good condition (homes that already have some insulation and weatherization).  Only if you are in a cold climate in an old, leaky house do these insulation and weatherization measures consistently make good economic sense.

When it comes to developing good government and utility policy, we need to consider consumer economics, not arbitrary energy philosophy.   With lower-cost solar retrofits -- coupled with decades of energy improvements that have already been done on our housing stock --it actually makes better economic sense to generate your own power than to reduce your consumption.

Unfortunately, the 'conserve first, generate later' philosophy limits the adoption of renewable energy systems.  For example, some state solar energy programs require a 20% reduction in energy consumption before a solar power system can be installed.  All of the PACE programs funded in California require a "loading order" that mandates that aggressive energy reduction measures be completed before rooftop solar can be installed.

In the San Jose example above, that would mean prioritizing insulation-type retrofit measures with 15- to 35-year paybacks over the 7- to 12-year paybacks from solar power and solar thermal. The bizarre result of the well-intentioned loading order in California is that PACE -- which was created to finance clean energy in the first place -- requires homeowners to prioritize retrofits that are much less cost-effective than solar. So most homeowners decide to do nothing, resulting in no energy savings at all.  Everyone loses, except maybe the company that sells you the energy.

Because of new technologies, materials and construction practices, many of the energy conservation measures of the '70s are no longer applicable (cardigan sweater, anyone?). Given the right information, homeowners can and will make sound economic choices.

Tags: california, doe, efficiency, finance, policy, solar, wind