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How Much Money Do You Really Spend On Energy?

Wednesday, September 9, 2014

How your day-to-day decisions affect the climate is hard to access and measure. How your day-to-day decisions impact your finances is significant, direct, and can be measured precisely. Our focus will now be on money, your money.

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If you are connected to the grid, each month you pay a bill for the consumed energy. The prices might be more or less volatile, but long term they tend to increase. As long as you consume energy from the grid, you will to pay for it.

Let’s asses how much money you really spend on energy, starting with electricity. Each month you send money to a utility company for your electricity bill. Then, there is the energy used for heating water, to keep your place warm or cool (space heating and/or cooling) and heat used for cooking. Finally, there is transportation. The fuel you buy to drive a car.

Add the amount of your electric bill, natural gas/propane bill, and estimate the money you pay for gasoline/petrol. Here is an example:

  • Electricity: $100.
  • Natural gas: $150.
  • Car fuel: $200.
  • Total per month: $450.

Now, multiply this by 12, for annual expenses. Then by 20, for 20 years:
$450 x 12 = $5,400.
$5,400x 20 = $108,000.

This is the amount leaking out of your pocket, assuming energy prices would be fixed. Let’s assume energy prices increase by 2% each year and the amount out of your pocket just jumped to $131,205. In 2013, energy prices rose by at least 3% depending on the fuel type and country.

Now do the math for your home or your business. Did you expect that result? Now imagine never having to pay for energy again. What would you do with that money? Pay off the mortgage? Go on holiday? Expand your business? Start a business?

Source: CleanTechnica

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