Thursday, February 12, 2009

Green Techonology Saves Money? Maybe.

This recession is finally getting people to consider the consequences of their actions, both long-term and short-term. The Wall Street Journal ran two pieces under the heading "Eco-Friendly... and Frugal."

Both pieces relate how both appliance manufactures, such as GE and Whirlpool, are aggressively marketing the cost savings of owning Energy Star compliant appliances. While I am a big fan of cost savings, I am also a fan of conservation. However, when purchasing appliances, doors, HVAC, etc., just because its Energy Star compliant doesn't necessarily make it a good deal.

The article states that prices for both traditional and Energy Star are narrowing, which makes the Energy Star product more appealing. However, it is the statements of savings by the manufacturers that have to be evaluated. From the article:

The cost savings don't usually amount to much in the short term. And many families may not see the kinds of savings that companies promise. That is because company estimates make certain assumptions, such as how long the new product lasts, how old your previous appliances were, and whether your are using the latest gadget with other energy or water efficient devices under the same brand name.

Huh, how about that? Further, the articles states that David Lockwood, director of consumer insights at Mintel International, believes that "In general, the actual dollars saved annually end up being lower than most consumers expect..."

To buy or not to buy, that is the question. If you are in the market for appliances and the conventional model is priced at or near an Energy Star product, its worth considering the Energy Star one, as some savings beats no savings. Scrutinize the claims of the manufacturer. See if their claims are consistent with your lifestyle and use of the appliance. Consider also if the appliance adds to the value of your home. In some cases, a home with several Energy Star items (lights, doors, windows, appliances) can garner a premium, even in a down market.

In the end, spend your money they way you want. Consider what features you value and which you don't and act accordingly. That is what defines an economically efficient market, consumer choice and the determination of value.

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