Finance guru Zvi Bodie had recently claimed that the best and safest investments are on I-bonds, inflation-adjusted bonds from the US government. This means that the rate of interest is guaranteed to be at least the rate of inflation. They are backed with the credit and full faith of the US government for 30 years, and can be cashed out anytime with the security that it is adjusted and the purchasing power has been maintained.
In response to this article, however, one Hilton Dier, owner of Renewable Energy Designs, argues that it is not the safest investment out there. Instead, he claims that energy efficiency investments have the best return, and are the safest type of investment.
First, he stresses that this type of investment only works for people who own property–homes or businesses–but does not work for people who rent. One of the key points that he underlines is that investments do not necessarily mean earning money, but can also mean saving money. If you save $100 on an electric bill, for example, it is the same as earning $100 on an investment, but perhaps even better, since saved money is not taxable.
He also adds that just as I-bonds are inflation-adjusted, so are personal energy investments. In fact, it might be well over than just inflation-adjusted since it seems that the cost of energy–all the different kinds–is going up faster than inflation. So, the money saved in the first year, is guaranteed to adjust in the next year, as the costs go up and efficiency lowers the money spent.
Finally, perhaps the biggest advantage of energy efficiency investments is that they are insured. Whether you make improvements on a business or a home, they will always be protected by the insurance over the establishment. Any damage on equipment or on the property will always be covered. The best part, is that it will always be yours.
As for his final comments, he adds that returns will vary depending on location and the types of energy replacements/efficiency equipment you decide to install. For example, using solar energy in New Mexico will return more than if it was used in Seattle. But overall, the return on energy efficiency investments will be much higher than any other financial investments. A lot of states have even jumped in to help, creating tax credits and other incentives for those who decide to take on personal energy investments.
The first step is an energy audit. The report will include the deficiencies of the building, the possible solutions, and estimates on both costs and eventual savings. Whether it is a simple air sealing of the building to make central heat and air systems more efficient or completely turning into solar energy, each investment is not only good for the pocket, but good for the environment as well.