Economies of Scale
Jun 04, 2009
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The problem with many renewable energy products is that they are just too expensive. It’s not PC to say this, but in the end, market forces to matter. Customers rule the market: and like your economics professor would mention, get those two supply and demand curves to align, and then you’ve got a market.
Take the case of the Canadian wartime homes. Many of these homes have seen better days, but there are still a million of these homes throughout Canada. Built quickly to house Canadian manufacturing workers during World War II, they offer a huge opportunity for green-friendly retrofitting.
There’s a problem, however–in Windsor, Ontario, across the river from Detriot, the average price of these homes are well under CAD$100,000. The price to remodel a home and make it carbon-neutral is . . . CAD$85,000.
Ouch.
But as the news report states . . . go back to what your economics professor said . . . the cost could be brought down significantly if there were economies of scale. Translation: volume! The more solar panels, insulation, LEED-certified building materials, etc., are produced, the more the cost goes down.
Second, government incentives help. We pay energy taxes . . . why not get those back and even more by having a house that doesn’t sap from the electrical grid–but actually could even ADD to it?
