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An extraordinary opportunity: 
Save taxpayers $7 billion a year while improving our environment

As 2009 gets underway, there's an intense nationwide debate about how we will deal with the present economic scene. One common focus is the Federal budget deficit, and the taxation and inflation that could result from the economic stimulus efforts currently underway. While some funds may be needed to prop up vital sectors of the economy, we need to look for areas where those investments can actually produce long-term gains, not merely short-term fixes.

Our nation's budget deficit going into 2009 is estimated at $482 billion.¹ Every cent that we, as a nation, can save will mean less taxes required, more economic stimulation, and a faster return to a position of real prosperity.

Any business that is spending more than it's earning needs to either boost revenue or cut expenses in order to balance the books. Unfortunately, since the primary way to boost income at a national level is to raise taxes, that just isn't a solution any of us would prefer.

That leaves cost-cutting as the best method of solving the problem.

As you've read on my past posts, and often throughout the energy-price spikes of 2008, one extremely effective way for a family or a business to cut costs is by adopting renewable energy.

For example, a small business (call it "Company A") with $10,000 in annual electrical bills can save more than $126,000 over 25 years by "going solar" (taking into account the cost of paying for the system).

Additionally, that business would eliminate roughly 56,000 pounds of CO2 emissions per year – equivalent to planting nearly 4.4 acres of trees annually! This amounts to a full 50% savings - in other words, over that time period, factoring in the cost of the system, that business would cut its energy costs in half.²

What business doesn't want to cut its energy costs in half?

It's all about scale

Well, just how large is the Federal government's electric bill?

According to Heather Zichal, a member of President Obama's Energy and Environment Policy Transition Team, it's around $14 billion per year.³

With all the costs our government is currently bearing, a savings opportunity like that just can't be ignored.

Just using some very rough numbers for the sake of illustration, our Federal government is spending about 1.4 million times as much on energy as our imaginary "Company A."

Acknowledging that the details will vary substantially at that scale, it's clear that we're talking in terms of hundreds of billions of dollars saved over the next generation. And beyond that, millions of tons of carbon dioxide emissions prevented, and an untold savings in human and environmental health.

An additional benefit is job creation. The initial investment to develop a national renewable energy infrastructure is estimated at $150 billion over 10 years, with 5 million jobs created in the process.⁴ Yes, that money has to come from somewhere. But as a nation we must think more like a business in this case. If the choice is:

1. Spend our money now on infrastructure, which retains its value and produces cost savings over time; or
2. Spend twice as much over decades on sunk costs of polluting, non-renewable energy sources such as coal and oil…

The right decision becomes obvious.

We owe our children a better legacy than one of pollution, indebtedness and inflation. How about a legacy of improved health, environmental protection, and the creation of an infrastructure that will power our nation for the centuries?

That sounds like a great investment to me.

References

1. House Budget Committee, as reported by the Huffington Post.
2. SunWize Power Systems "Clean Power Estimator."
3. Obama-Biden Transition Team.
4. Obama-Biden Transition Team.