The vast majority of residential homes and their associated technologies (heating/cooling/cooking/lighting/refrigeration/transportation) operating in the United States function off of carbon-based energy supplies. Homes are still primarily heated and cooled by utility-supplied natural gas or fossil fueled electricity and our vehicles use gasoline or diesel fuel. Even in homes with electric vehicles, the vast majority of the energy to charge the car’s batteries depend on coal or natural gas-fired electrical generation, essentially relocating their carbon emissions from the tail pipe to the utility smoke stake. While homes are becoming more energy efficient, they continue to grow in size, significantly off-setting the reductions in energy efficiency with gains in square feet of conditioned space. While new building codes increase the energy efficiency of our homes, they continue to be based on the least-cost, discounted, net present value of an energy supply with zero long-term future value because of the code change discounting approach. These approaches typically peg the value of the code change to the future value of the discounted wholesale energy supply cost, rather than on the value to the home owner or the future of our country. This same condition applies to the vast majority of energy efficiency programs now operating in the United States, limiting their carbon saving ability.
In these approaches the price of energy to the homeowner is typically not valued at the retail cost to the customer, but is instead valued at the utility’s regulated wholesale supply cost, a cost many times lower than the customer’s actual costs. Then, that wholesale cost of energy is further reduced in its calculated value because of the discounting approach approved by most regulatory agencies for residential energy technologies. These discounting approaches values future energy savings at a level of worth far below its value to the homeowner. Therefore, when compared to other, more sustainable, energy efficiency solutions (wind, solar, geothermal, etc.), they are falsely perceived as less economically efficient and are not approved for inclusion in these programs. We actually discount the value of our future carbon reductions to be essentially worthless in future years because of our discounting approach, thereby providing no impact on an energy efficiency or carbon reduction discounted-based economic decision.