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04 September 2008



Why did Building even grace space to the report in the first place, though!



Welcome back. Hope you enjoyed your break.

I've calculated payback periods of around 30 years on some of our projects. I think this is more realistic than the 200 years quoted. That is still too long though. Probably needs to be around 5 years to make it an easier sell.

This of course was on the basis of the time taken for the savings achieved to stack up against the capital cost. What is not considered in this is the hidden costs - the real payback is reducing the impact on the planet.

Being able to express the carbon saving savings into a notional monetary figure (Defra's SPC for example), which I've dabbled with more recently is an interesting way of making the commercial argument for doing it more compelling.

I'm fairly certain the figures quoted in the RICS report don't consider this sort of thing, but perhaps they should have.


These raw payback calculations have to be calculated against the costs of alternative (conventional?) energy supplies. However, these are anything but stable at present, so how is this being done?
IF: against current costs, this is totally unrealistic when, in the face of a looming worldwide energy crisis, they are climbing rapidly and inexorably.
IF: (on the other hand) against some future projection, how is this arrived at when in future it may be only similarly expensive renewable sources that are available, anyway; and the price of current conventionals has gone off-scale?
Those rejecting solar NOW, on either basis, could look very silly if they finish up with no affordable alternative energy supply at all in a few years time.
'Standard' (conventional) discounting procedures are meaningless for this type of scenario, where the future value of an investment is likely to continue appreciating (perhaps exponentially) rather than depreciating. Cost-benefit analysis here needs to be combined (and tempered) with some very shrewd risk analysis and futurology indeed.
Many resources, including (crucially) oil and uranium, are projected to become exhausted by or during the second half of this century. In such a growing world-wide resource-depletion crisis, the magnitude of future project assessment difficulties should not be underestimated. To bury our heads in the sand, pretend it's not happening, and carry on regardless with rapidly obsolescing techniques, could be a suicidal recipe for disaster.

Prof Tim Dixon

I am afraid, once again, that the BCIS/RICS research will serve only to confuse and dissuade homeowners from 'going green'. There is plenty of other research to support the view that much lower payback periods apply --see this link for more information: http://www.brookes.ac.uk/schools/be/staff/resources/It's_payback_time.pdf

Phil Clark

Thanks for all the responses, and for the link Tim. Making such calculations is clearly not an exact science but we can be confident that the RICS' effort is of the flat earth variety.

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