SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

Energy Wise Investors Wish ListD.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!

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

Energy Wise Investors Wish ListPreface:

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)

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

Basic Assumptions1. 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

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

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

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

A “Window” In TimeThe 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

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

Opportunity Of A LifetimeThe “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 Green5. Contractors and Tradesmen

available at favorable rates

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

What’s Wrong?Why Dont We Pick Up

The Cards That We’ve Been Dealt & Turn This Amazing Engine Loose, & Fix The

Problems?

?

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

Contractors Wont, Homeowners Cant,

Landlords Wont Even Consider It

(Doing Deep Energy

Retrofits)

(And that is the only thingthat will really turn our

situation around) Why Not?

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

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 ...

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

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)

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

Why The Current “Program Based” Approach Will Struggle & Produce

Minimal ResultsHome OwnersMost 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

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

Why The Current “Program Based” Approach Will Struggle & Produce

Minimal ResultsLandlords

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!

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

Which Looks Better?

Results Current Residential Real Estate Investing Models:

Lipstick On Pig ModelMaximizes ROI

Fastest TurnaroundNo Energy RetrofitNo Energy Saved

Foreign Oil Dependence, SameCarbon Footprint The Same

No Jobs CreatedDrags Down NeighborhoodCreates Tenants, vs Owners

Reduces Tax Base

Energy Wise InvestorProbably less ROI

Longer Term Thinking RequiredDeep Energy Retrofit

Save 30-50% easilyReduced Dependence

Reduces Carbon FootprintCreates Green Jobs

Improves NeighborhoodCreates Home Ownership

Increases Tax Base

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

What’s Wrong?Why Dont We Pick Up

The Cards That We’ve Been Dealt & Turn This Amazing Engine Loose, & Fix The

Problems?

?

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

BarriersContractors 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.

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

BarriersAppraisal 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?)

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

Barriers

Real Estate Industry

The Real Estate Industry has fought

energy improvement legislation, including

Energy Efficient Mortgages for many

years.

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

BarriersGovernment 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.

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

BarriersGovernment Programs rely on massive

inefficient bureaucracies.

To justify their existence, bureaucracies must grow = increase in

complexity.

Success of the Bureaucracy usually means Elimination of

Creativity the Entrepreneurial Spirit.

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

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

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

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 BasedBase any incentives

on Performance(Real Performance,

Not Expensive Unreliable Modeling)

SavingThe PlanetOne HouseAt A Time

G r e e n E a r t h E q u i t i e s . C o m © 2010

Suggestions:To Be Continued

Not Just One Way

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.