I find last week’s topic on climate change to be fascinating from the risk perception/risk communication/risk appetite perspective.
Climate change is a great example of an extended risk as opposed to an immediate risk. I’m not sure I see the difference in how people prepare for natural disasters in their own communities vice how we prepare for something that has much more of an extended impact on everything – the food we eat, the insurance prices we pay, etc.
For example, VT experienced a lot of rain this summer with significant impact during July. Fortunately, we are at a higher elevation, but there were several areas that had never been flooded before that were severely impacted. And a lot of farmers lost their crops. There are folks who are still waiting for their houses to be rebuilt since there aren’t that many tradespeople to support the need. In fact, the governor asked tradespeople who had retired to consider coming out to retirement to assist with getting people back into their homes. Despite having a contractor, we are still finding it difficult to procure some home services and there was a great article in the New York Times earlier this week that speaks to how the aging out of the workforce is having an impact in VT as an indicator of what the rest of the country will experience. I imagine that AK has similar challenges.
While I try not to impose my personal beliefs in this course, and many of you are not homeowners yet, I’d like to share some real-life experience with some of the possible technologies. I will share that my husband and I had good luck with our solar panels in MD – the ROI was about 8 years and we achieved that since we lived in the house for 12 years. We spent less than $1K per year on both electric and natural gas, since we had also installed a 95% efficiency furnace. I don’t know if it was a selling point for the buyers or not – our real estate wasn’t a fan and wanted us to remove the panels and install a new roof, but we nixed that idea quickly since the roof was fine. Given the high interest rates at the moment, there aren’t a lot of houses on the market, and so we had a lot of interest regardless of the solar panels. You do need to watch out for snow loads, though – they took our new gutter after a 16” snowstorm, which is a bit of an anomaly for the area. 😊
We did add solar panels to our new house and the ROI will be about 16 years with current electric rates, simply because VT has lower rates than MD. So, we may or may not get the return, but still felt that it was the right thing to do. In the new house, we also moved to an induction stove, which we find to be better than gas (which we loved using for cooking), since it reduces the indoor air quality concerns although you do need to have the right kind of pans to make this work. And we went with a heat exchanger for our heat – but there are limitations to that technology. These units don’t work well at less than 20 degrees, so they need to be supplemented by propane. Our contractor wasn’t familiar with this technology – it was a bear to get these things into the contract – but we are grateful that we pushed. And we do use a generator as our back up system, so propane was always going to be part of the picture. We’re thinking about an EV, but the juice isn’t quite worth the squeeze yet, so we just economize by grouping all our errands together. We’ll get some tax benefits for these investments and would like to think that this is our contribution to the future.
The biggest challenge, however, in sustaining these types of changes on a national basis will be dependent on whether the electrical grid can sustain these types of changes in the long term. As more customers adopt these types of technologies, there is a question as to whether the grid is designed to support them. We have instances locally where some of the wind generators can’t run since it will overload the system and in fact be a waste of energy.
As always, there are pros and cons to all decisions and it’s important in risk management to consider all the options and complete a cost-benefit analysis. I wish you luck in considering your options and contributions to being part of the solution.
Be safe and well,