Friday, February 22, 2013

What's a good payback or return on investment for a "green" product?

Q: What's a good payback or return on investment for a "green" product?

A: That's difficult to say without knowing the exact product in question or how it is being applied in the construction or operation of a house.

For example:

If you were to install a Geo-thermal heating system in your home you would have to wait at least 10 years to get a return on your investment, this being because Geo-thermal heating is extremely expensive to install compared to conventional heating methods. That might sound like a long time but one thing that you have to consider is that a geo-thermal heating system will raise the value of your home immediately. Geo-thermal and other green innovations are becoming more sought after in today’s real estate market.
When you add in the savings for the heating, cooling and the free hot water that you receive from the system and then add in the added real estate value, it is easy to say that you would get your full return on the investment in less than 5 years.

If you were to install a green roofing product like Enviroshake instead of asphalt shingles, the same rules apply of increased real estate value immediately. With roofing products like Enviroshake you wouldn’t receive the full return of the cost of the roofing system on your real estate value. Where you would see the return is after 10 to 15 years when you have to replace the asphalt shingles, the Enviroshake product looks like it did the first year that you installed it. In-fact you will probably replace the asphalt shingles on your roof 4 to 5 times before you have to think about repairing or replacing an Enviroshake roofing system. Enviroshake has a 50 year warranty; basically they should outlast you living in your home.

So the return on your green investment really depends on what that product does and how expensive it is at the beginning compared to non-green products.

Rob Abbott
Operations Manager
Village Builders

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