The Harvard Energy Advisory Committee (HEAC) wants the town to apply for Green Community status. Article 4 of the Special Town Meeting considers the adoption of the “Stretch Energy Code” as one of the requirements. A major advantage of Green Community status would be the ability to obtain grants available from the state.
To make an informed decision, however, voters need to understand the true financial returns associated with the Stretch Code. Supporters for the adoption of the Stretch Code use the analysis provided by the Massachusetts Department of Energy Resources (DER). In reading the DER material, I found their presentation and conclusions about the costs/benefits disingenuous at best.
In its report, Massachusetts Stretch Code Modeling and Cash Flow Analysis, April 2010, DER presents the bottom-line conclusion in bold italics on the first page, “….typical Massachusetts homes can be built to the Stretch Code with a positive cash flow (saving money for the homeowner) in the first year of occupancy.”
Based on the financial analysis presented in its own report, however, this conclusion is deceptive. It is not true that the cash flow is a net positive in the first year, “saving money for the homeowner.” In fact, in the Baseline Home example, considering the time value of money, it takes more than 16 years to have the cash flow turn positive. It is not until year 17 that the homeowner starts to save money.
The Green Community literature touts internal rates of return of as much as 100 percent for Stretch Code projects. None of the examples provided in the DER report, however, come close to that level of return. Using the figures provided for the baseline home, the internal rate of return is 9 percent, considering the cash flow over a 30-year period. The small-home example was only 5 percent.
Supporters of the Stretch Code say that Harvard will save money immediately by converting town buildings to meet the code. It will, however, cost a considerable, upfront investment to do the conversions. Like the DER home examples, it will take years before the investment turns positive.
Anthony J. Marolda
Jacob Gates Road
