Tuesday, July 11, 2017

Is Complex Tech Worth It?

A Prius might get 50-53 miles per gallon.   But far less expensive cars can get 40 miles per gallon.  In an era of cheap gas, is the complexity and cost of a hybrid worth it?

Energy savings are a great deal.   And if you can cut your energy bill, you save money over time, as it is a subscription service and small increases in subscriptions can add up to big dollars, when compounded over 20-30 years.

So, for example, we replaced our old single-pane wood windows with double-pane insulated vinyl replacement windows.  It was ridiculously easy to do - the old windows pop out and the new ones pop in.  Screw and caulk and done.   About $3700 for 18 windows.   Installers charge more - a lot more - on the premise you "save energy" so it "pays for itself".   But our install will pay for itself in a couple of years.  If I had hired someone, it might be a decade or longer.

Once paybacks on energy savings take more than say, five years, you really have to stop and think about where you are going with this.   Now granted, there may also be ancillary benefits as well.  For example, the vinyl replacement windows are much, much quieter than the old wood windows.  We don't hear road noise or indeed, if someone pulls into the driveway.  They are also more comfortable too - the old windows radiated heat inside in the Georgia summers, necessitating we kept the blinds closed.   LED light bulbs are a lot cooler than incandescent bulbs, which makes the kitchen a lot less warmer than it was before.

But if you do the math, a 7w LED bulb replacing a 60W bulb is saving 53 watts.  At 10 cents a Kw-H and 8 hours a day on average, you are "saving" 4.24 cents a day or maybe $15.48 a year.  There are real and immediate cost-savings going to an LED bulb over an incandescent, and not only that, each bulb is 53 watts of heat you don't have to pump out of your house as well.

Other technologies have longer payback periods.  And why I say 5 years is a good number as the average person moves about every 5 years or so.  High-tech energy-efficient appliances add little, if anything, to the value of a house.  A buyer expects there to be a furnace, hot water heater, and a stove.   Fancy doesn't count for more.   Or at least not much more.  Hell, these days, the buyers rip everything out, even brand-new appliances (I've seen it done!) to "upgrade" to their fancy.

So for example, we were putting a furnace in our house in Virginia.  A fancy 95% efficient "condensing" unit cost like $6000 to install.  It actually extracts so much heat from the combustion process that the gases condense into liquid and drain out into a floor drain.   Carbon Dioxide goes out a dryer vent.   But this requires a secondary heat exchanger coil, control panel, induction fan and whatnot.  A more plebian gas furnace about 80% efficient was about $3000 installed.

Which was a better value?  The house was bulldozed five years later.   Our energy bill went down substantially with the 80% furnace, as our old Chrysler "Air Temp" from the 1950's was probably barely 50% efficient.   I sincerely doubt we would have recovered the delta in price between the 80% furnace and the 95% furnace in less than five years.  But going from 50% to 80%, that was a no-brainer (and it wasn't like we had a choice, the old furnace had a cracked heat exchanger, which can kill you with CO gas).

Not only that, the fancy furnace would have broken down right out of warranty.  Remember, I used to work at the factory.   I saw the returns of the printed circuit boards.  The more complex a piece of machinery is, the more likely it is to break.   And the more commonly made equipment is more reliable as they make more of it.
And this doesn't even address the install cost.   The 80% furnace fit right up to existing ductwork and flue pipes.   The condensing furnace would require a floor drain and a hole in the wall for the vent.

Cars are the same way.   Hybrids are popular, as people want to make a political statement.  But as an economic proposition, well, I don't have a hybrid in my garage, which just about says it all.  If they were cheaper to buy, own, and operate, I would have one.   But I realize that getting "reasonable" gas mileage is really the key.  The hamster gets about 30 on average and up to 35 on the highway.  Yea, I could get up to 50 in a Prius.  But we drive about 5,000 miles a year and gas is presently $2.15 a gallon.

Even assuming we drove the standard 15,000 miles a year most Americans drive, that comes to 300 gallons of gas in the Prius, versus 500 in the hamster.  That's about $430 a year in additional fuel costs.  A stripped Prius starts at about $24,000.  A stripped hamster starts at about $16,000.   How many years do you have to own the car to make up an $8000 delta in purchase price?  That's right, over 18 years.

The Prius is a well-made car, and the batteries seem to last a decade or more.  But 18 years?  Odds are even a Toyota is ready for the junkyard by then - or getting close.

Sorry, but it just isn't worth it.  You'd have to see a payback much sooner than that, as few people keep cars that long.   And bear in mind 18 years is the point where you break even.   And yes, opportunity cost does enter into this, as you had $8000 tied up in a car (and increased depreciation) over that time period.

Going from a 10 mpg gas hog to a 20 mpg light truck saves a ton of money ($1600 a year!).   20-30 saves even less (about $500 a year).  30-40 less still ($270).  And so on.   Because gas mileage is a fraction, each increment gets exponentially smaller.   Hyper-miler cars reach a point of diminishing returns, something Mr. Elio hasn't figured out (not that his car will get 80 miles per gallon anyway, and it will never get built).

Hydronic heating, I wrote about before.   It falls down on two grounds.  First, it is ungodly expensive to buy and install - and repair.   And yes, running miles of tubing through your house is not a swell idea.  It will leak, eventually - all plumbing does, you know.   But the energy savings?   People say it is "a different kind of heat" which defies what my Thermodynamics textbook says.   Heat is heat, God only made it in one flavor.   But worse, as my experience showed, during the spring and fall, the hysteresis effect was such that in the morning you would turn it on because you were "cold" and by noon you had every damn window open to get rid of the excess heat.

Maybe you could argue it is a comfort thing.  But it is not any more efficient that a much cheaper (by a factor of 10 sometimes) forced-air furnace.   And in fact, it is often far less efficient (our cast-iron "boiler" blew tons of heat up the chimney!).

But people love complex HVAC systems, convinced they will heat or cool their house for nothing.   A reader writes that Google is spinning off its Ground Sourced Heat Pump division which sells a pretty conventional Ground Sourced Heat Pump with a novel well-drilling system.   Likely they are losing money on the company as they are quoting a staggering $25,000 for an install, which means a payback of never.

Ground Source Heat Pumps are just like the regular kind, except that they reject (or absorb) heat from a "ground loop" rather than the outside air.

Like hydronic heating, there are pumps and piping (not as much, but some) and more complexity in the controls.  These are not new systems - we were selling them back in the 1980's.  A neighbor in New York, a Doctor, installed one in his house.  He had a lot of money to spend and liked tech-y things.   He sold the house and the system needed repair.   Problem was, there was only ONE guy in the area with the expertise to repair it.  And as you might imagine, a lot of the parts were "special order".   Was it worth it?   Probably not.

The best Engineering follows the KISS principle - Keep It Simple, Stupid!  And as a consumer, you are better off buying run-of-the-mill standard equipment rather than fancy esoteric stuff.   A Chevy Cruz is going to be more reliable that a BMW 3-series, even if the latter is a far more fun car to drive.  Mass-produced items always beat out niche products.

And the same is true for household appliances.   Wolf ranges and AGA stoves (which are always on) are fancy and fun, but hugely expensive to buy (which is the point) and expensive to repair.  All you really get is bragging rights that you spent a lot of money (which you may or may not have).  You might as well just leave your bank account statement laying on the coffee table for visitors to look at.  It would be less tacky.

This is not to say you should live in a yurt and heat it with a wood fire, cooking Yak steaks over a forked branch.   Being extremist really annoys me.   What it means is that the optimal bang for the buck is right in the middle of the pack - the one time being a pack animal is to your advantage.  The Walmart lifestyle I call it - others call it the middle class.

And some say the middle class is disappearing.   I am not so certain.  I think the middle class has destroyed itself in an orgy of over-consumption.  People who could be content with regular appliances and countertops, rip out perfectly good kitchens to "upgrade" to the priciest of appliances.  Rather than buying a modest car to commute to work, they decide they deserve a fully-loaded $80,000 SUV.

You can buy all that fancy shit if you want to (and we've all done it).   The reality it, is just is a wallet-lightener, and it doesn't make your life better.   In fact, by pushing you into debt, it makes it a whole lot worse!