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Opportunities Lost

April 1, 2014

Richard Kauffman, New York State chairman of energy and finance, wants to stimulate markets by using subsidies since many clean energy projects are inherently uneconomic.

He also wants to use psychology to get consumers to take actions they probably would not take, without a psychological push.

He said, “Too many of us in the clean energy area – and those of us involved in smart buildings – don’t think enough about the emotions that are involved in a decision.”

To get consumers to act, he said, “It often means playing to the herd mentality of consumers.”

He suggests playing to the herd mentality is needed to get consumers to adopt uneconomic clean energy projects: If, for example, they see a neighbor installing clean energy, they are more likely to follow suit.

Niagara Falls, with Maid of Mist. Photo by D. Dears

Niagara Falls, with Maid of Mist. Photo by D. Dears

His comments were made in Buffalo NY, near Niagara Falls.

He readily acknowledges that getting consumers to act on clean energy projects is a tough sell because of the high upfront costs and long payback periods of clean energy projects.

Contrary to his views, it’s certainly hoped that most consumers are capable of making good decisions without following the herd.

He says that because of clean energy projects being inherently uneconomic, it requires government to subsidize them.

He cited a big role for government agencies, such as NYSERDA, and the $210 million NY Green Bank initiative helping finance clean energy projects.

“The New York Power Authority, for example, spent $280 million last year on energy efficiency projects and expects to spend between $250 million and $300 million annually on similar initiatives through 2020.”

He makes no mention, however how these large funds could have been put to better use by investing in opportunities having a more favorable economic impact.

By definition, he admits these projects are uneconomic … with long payback periods.

There are opportunities lost when money is spent on uneconomic projects.


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3 Comments leave one →
  1. April 3, 2014 11:17 pm

    Well said, as usual, Donn. Thanks!


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