Energy Wise Investors Wish List D.O.E. Is asking for a list. (what works, barriers to remove, etc) Let’s give ‘em one! I’m working on it but I need your help!
G r e e n E a r t h E q u i t i e s . C o m
© 2010
Saving The Planet One House At A Time
Energy Wise Investors Wish List
Preface: The primary purpose of my invitation to the DOE meeting is to share what we do at GEE & represent the Energy Wise Investor’s point of view.
Secondarily I will present observations about the conventional program-based systems and the status quo, based on 35 years of contracting and many years of leadership in the industry(s) (I need your help on both of these) G r e e n E a r t h E q u i t i e s . C o m
Š 2010
Saving The Planet One House At A Time
Basic Assumptions 1. We have a wonderful gift in this country, The Free Enterprise Spirit, aka the Entrepreneurial Spirit. 2. This Entrepreneurial and Independent Spirit inspired our Revolution and Independence, Pioneering our continent, Winning World Wars, Exploring space, and Patenting more inventions than any other country. 3. Assumption: This same spirit, If turned loose and fostered, not hampered, fettered and squashed, can greatly help deliver energy efficiency and save our nation and our planet G r e e n E a r t h E q u i t i e s . C o m
Š 2010
Saving The Planet One House At A Time
When Life Gives You Lemons ... The implosion of the “Real Estate Bubble” of the last 3 years has been a SOUR experience for many, foreclosures, loss of equity, loss of jobs etc But At The Same Time #4. These Lemons can be made into LEMONADE
G r e e n E a r t h E q u i t i e s . C o m
© 2010
Saving The Planet One House At A Time
A “Window” In Time The massive number of foreclosures provide GAME CHANGERS that could be turned into solutions. Prices have been reduced to “Before the Bubble” rates Foreclosure and Bank Ownership makes it worse. (losing the house, to heck with maintenance & kick it on the way out) (obtuse bank handling of foreclosures takes a long time, allows more deterioration, costs $$$) = Big Opportunity TheSaving Planet G r e e n E a r t h E q u i t i e s . C o m
© 2010
One House At A Time
Opportunity Of A Lifetime The “Raw Materials” Of A Perfect Storm = A Perfect Solution 1. Cheap, easily obtainable properties that NEED renovation 2. Cheap interest. 3. Increased housing need since building stopped. 4. Increased interest in Green 5. Contractors and Tradesmen available at favorable rates G r e e n E a r t h E q u i t i e s . C o m
© 2010
Saving The Planet One House At A Time
What’s Wrong? Why Dont We Pick Up The Cards That We’ve Been Dealt & Turn This Amazing Engine Loose, & Fix The Problems?
?
G r e e n E a r t h E q u i t i e s . C o m
© 2010
Saving The Planet One House At A Time
Contractors Wont, Homeowners Cant, Landlords Wont Even Consider It (Doing Deep Energy Retrofits) (And that is the only thing that will really turn our situation around)
Why Not?
G r e e n E a r t h E q u i t i e s . C o m
Š 2010
Saving The Planet One House At A Time
Why The Current “Program Based” Approach Will Struggle & Produce Only Minimal Results With High Overhead Contractors Contractors can only sell what customers will buy. Contractors may want to sell full packages and really make a difference in our Energy Dependency and Carbon Footprint BUT ... G r e e n E a r t h E q u i t i e s . C o m
© 2010
Saving The Planet One House At A Time
Contracting In Home Performance Programs Contractors have very high Overhead and Sales Costs Supporting & Compliance in the Programs cost even more. These Overhead, Sales, & Program Compliance costs dont save any energy ... That only happens when the Caulking meets the SheetMetal (you know what I mean) G r e e n E a r t h E q u i t i e s . C o m
Š 2010
Saving The Planet One House At A Time
Why The Current “Program Based” Approach Will Struggle & Produce Minimal Results Home Owners
Most Americans live on 105% of their income. We have little or no savings and are easy prey to Marketers peddling instant gratification, easy credit,and the Magic Something that will make our lives instantly better. ... So homeowners dont have the funds to do a Deep Energy Retrofit G r e e n E a r t h E q u i t i e s . C o m
© 2010
Saving The Planet One House At A Time
Why The Current “Program Based” Approach Will Struggle & Produce Minimal Results Landlords Landlords & Real Estate Flippers have been taught for many years by 99% of the trainers in the industry to focus on ROI ... To the exclusion of all else, including Green. So Green is a nice idea ... “but this is my business” “Lipstick on a Pig” maximizes profit, so that’s what I’ll do.
It’s still a pig!
G r e e n E a r t h E q u i t i e s . C o m
© 2010
Saving The Planet One House At A Time
Results Current Residential Real Estate Investing Models: Energy Wise Investor Lipstick On Pig Model Probably less ROI Maximizes ROI Longer Term Thinking Required Fastest Turnaround Deep Energy Retrofit No Energy Retrofit Save 30-50% easily No Energy Saved Reduced Dependence Foreign Oil Dependence, Same Reduces Carbon Footprint Carbon Footprint The Same Creates Green Jobs No Jobs Created Improves Neighborhood Drags Down Neighborhood Creates Home Ownership Creates Tenants, vs Owners Increases Tax Base Saving Reduces Tax Base Which
Looks Better?
G r e e n E a r t h E q u i t i e s . C o m
Š 2010
The Planet One House At A Time
What’s Wrong? Why Dont We Pick Up The Cards That We’ve Been Dealt & Turn This Amazing Engine Loose, & Fix The Problems?
?
G r e e n E a r t h E q u i t i e s . C o m
© 2010
Saving The Planet One House At A Time
Contractors Stuck on Contracting. Many have watched their businesses, families, & net worth disintegrate around them over the last 3 years. They are waiting for things to turn around so they can go back to business as usual. If we provide a compelling vision, and demonstrated success, some will sign on to do something different.
Barriers
G r e e n E a r t h E q u i t i e s . C o m
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Saving The Planet One House At A Time
Barriers Appraisal Industry Current Appraisal Practice is regressive and promotes the status quo. (keeping everything the same) Most appraisers are behind on evaluating energy saving improvements. They feel they have their hands tied by the bureaucracy (or are they hiding behind it?) G r e e n E a r t h E q u i t i e s . C o m
Š 2010
Saving The Planet One House At A Time
Barriers Real Estate Industry The Real Estate Industry has fought energy improvement legislation, including Energy Efficient Mortgages for many years.
G r e e n E a r t h E q u i t i e s . C o m
Š 2010
Saving The Planet One House At A Time
Barriers Government Program To Fix Everything Mentality People have been conditioned to rely on and expect the Government or Utilities to be the trusted and benevolent expert. This allows consumers to relax, drink more beer and watch more TV but ..... Doesn’t do much for the American Spirit. G r e e n E a r t h E q u i t i e s . C o m
Š 2010
Saving The Planet One House At A Time
Government Programs rely on massive inefficient bureaucracies.
Barriers
To justify their existence, bureaucracies must grow = increase in complexity. Success of the Bureaucracy usually means Elimination of Creativity the Entrepreneurial Spirit. G r e e n E a r t h E q u i t i e s . C o m
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Saving The Planet One House At A Time
Q. If The Free Enterprise Spirit Is Turned Loose, How Can We Avoid Enron Type Scandals? A1. If all Investors Had A Green Heart. (This is hard to confirm and impossible to regulate) It can only be confirmed by observation of behavior over time. If Tax Dollars are going to be spent, There needs to be some guarantee that the desired outcome will actually be delivered G r e e n E a r t h E q u i t i e s . C o m
Š 2010
Saving The Planet One House At A Time
Q. If The Free Enterprise Spirit Is Turned Loose, How Can We Avoid Enron Type Scandals? A2. The Home Performance Industry has given us the answer. (although most use the term with a different meaning)
Performance Based Base any incentives on Performance (Real Performance, Not Expensive Unreliable Modeling) G r e e n E a r t h E q u i t i e s . C o m
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Saving The Planet One House At A Time
Suggestions: To Be Continued Coming Up: The Story of Andrew A & Andrew B, What is the problem? Which is the solution? What forces are pulling on the Andrews? See you next week. Not Just One Way G r e e n E a r t h E q u i t i e s . C o m
Š 2010
Saving The Planet One House At A Time