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Evaluation of Energy Saving Investments
Author(s) -
HANNA SHERMAN
Publication year - 1978
Publication title -
journal of consumer affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.582
H-Index - 62
eISSN - 1745-6606
pISSN - 0022-0078
DOI - 10.1111/j.1745-6606.1978.tb00633.x
Subject(s) - energy conservation , payback period , environmental economics , rate of return , payment , loan , energy (signal processing) , value (mathematics) , investment (military) , business , product (mathematics) , actuarial science , economics , production (economics) , microeconomics , finance , computer science , engineering , mathematics , statistics , geometry , machine learning , politics , law , political science , electrical engineering
The problem of consumers in evaluating energy saving investments suggests the need for a uniform disclosure method. Disclosure for energy conservation is related to the use of disclosure policies in Truth‐in‐Lending and other areas. Five methods of evaluating energy saving investments are analyzed: the apparent payback method, the present value method, the actual payback method, the loan payment method, and the rate of return method. The rate of return method is the only method that is both easy to understand and valid. The probable limitations in consumer understanding and use of information related to energy conservation, however, make it likely that a combination policy of disclosure, education, and product standards would be the most effective alternative for reaching energy conservation goals.