Green Investments that "Beat the Street"

Social worker LuAnn Kuder (left) and tax guru Maureen O’Brien used some of their retirement savings to invest in solar photovoltaic and geothermal systems to handle the electrical and heating demands of their Boston-area home. While their Wall Street retirement portfolios have dipped 11% the past two years, their green home improvements, have earned better than 7%.

Photo: Margaret Jerome

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Editor's Note: This is part of a series in partnership with the American Solar Energy Society. Click here for more articles about the National Solar Tour, and look for updates each Tuesday.

The U.S. Department of Energy predicts that the average residential electricity bill will increase 5% this year – and that it will escalate by another 10% in 2009.

Today’s runaway energy costs – coupled with unprecedented job losses, falling home prices, the highest foreclosure rate in 30 years, bankruptcies in abundance, a $700 billion corporate bailout, a precarious dependence on foreign oil and plummeting investments -- are enough to keep just about anyone up at night.

But Newbury, Mass., residents LuAnn Kuder and Maureen O’Brien are sleeping soundly. They’ve found a way to “Beat the Street” (Wall Street that is) with the returns they’re realizing on their retirement savings.

What’s keeping them rolling in the green is the very process of going green.

These two ladies have invested nearly $62,000 of their retirement savings in symbiotic solar and geothermal technologies for their home: $38,000 for a 500-foot-deep geothermal pump to heat and cool it and $24,000 for solar photovoltaics to accommodate the bulk of their electricity needs – including the running of the geothermal pump.

Massachusetts’ electricity rates are among the nation’s highest.

What this translates into is a remarkable return on their monetary investment, improved property values, a $2,000 federal tax credit, a larger and more comfortable usable living space, a smaller carbon footprint and essential immunity to rising energy costs, as their power is generated from the spectrum of solar well above the earth and the heat that lay deep inside the earth’s core.

“Our solar and geothermal investments are giving us more for our money than anything we have in the bank – or in the market,” said 59-year-old Maureen, a former H&R Block franchisee and financial consultant. She’s developed a spread sheet denoting the couple’s solar investments, their calculated ongoing savings and the rebates and tax credits they’re receiving as a result of their decision to go green.

And while their Wall Street investments have tanked 11% over the course of the past two years (still a bit better than the average 25% dip Americans have seen their investments take the past 18 months), their green home improvements are bringing them 7.2%.

LuAnn and Maureen were first introduced to the renewable energy options they’ve purchased for their home two years ago during the National Solar Tour, the American Solar Energy Society’s annual event whereby thousands of solar-savvy individuals across the U.S. open the doors of their homes, public agencies and businesses to neighbors who wish to learn the economic and environmental benefits of going solar. The National Solar Tour is the largest annual grassroots event in the history of the U.S. Last year, 115,000 people in 46 states participated. (This year's National Solar Tour begins Oct. 4. Find events near you at www.nationalsolartour.org).

“We knew we would both be looking at retirement soon ... and we both knew we were soon going to need a new heater for our home. We thought we’d be proactive and consider all of our options ... to see what we could learn on the tour,” said Maureen.

“The ASES tour was immensely helpful in showing us how to reduce our carbon footprint,” said LuAnn. “We conserved energy where we could, we replaced old incandescent lights with energy-saving CFLs, we added rain barrels to collect and recycle water ... it got us on the path to making our lives more sustainable,” she said.

The ladies took the tour, looked at solar independent of geothermal, and considered their options. They initially felt that, given their new conservation efforts, their electricity usage wouldn’t justify a solar electric (photovoltaic) investment. “It just didn’t make much sense, as our electric bill really wasn’t that high,” Maureen noted.

That all changed when Maureen sold her H&R Block franchise in 2006 and found herself home during the day, when their two-story 1,800-square foot Cape would get stiflingly hot in the summer and bitter cold in those Massachusetts winters. The two live about 40 miles north of Boston, near the New Hampshire border.

“I remember the summer I retired as a franchisee as one of the hottest on record,” recalls Maureen. “I was accustomed to being in an air conditioned office all day and without central air, our house was stiflingly hot, particularly upstairs. I’ve always considered myself a hardy New Englander, but this was unbearable,” she confessed.

The two now have geothermal to cool them in the summer and warm them in the winter. (Pictured at right: A drill used to install the geothermal heating and cooling system, which uses the constant 50-degree temperature of the Earth to heat the air in the winter or cool it in the summer. Photo by LuAnn Kuder.)

“It’s allowed us to double the usable living space of our two-story home with little anxiety about heating bills and the costs of air conditioning,” said Maureen. It’s so much more comfortable – and it’s sustainable.”

Following is a snapshot of how the two are realizing big ongoing returns on their $62,000 in renewable investments:

1. $9,310 cash rebate for purchase of a 14-panel, 2.7 kW solar system from the Massachusetts Technology Collaborative;

2. $2,000 one-time federal tax credit;

3. $1,000 one-time state tax credit;

4. $2,150 annual heating bill (oil) and electricity bill savings; All future utility increases add to ROI;

5. A more comfortable living situation with central air and heat throughout the house;

6. A reduced carbon footprint and a cleaner environment.

“You know we considered a smaller initial investment in improving our home: spending $20,000 on central air, a new oil burner and insulation. But for another $30,000, we’re using renewable energy systems that bring us immense short-term and ongoing payback on our money,” said the 59-year-old entrepreneur. “We definitely made the right choice.”

Maureen and LuAnn are quick to point out that the system that was right for them may not be the best option for others, that it is always best to talk to a professional when dealing with the critical asset of retirement savings.

“We’re not recommending that folks sell what they’ve got in the market without talking to a qualified advisor. That wouldn’t make sense. But in the realm of retirement savings, there may be other investments to consider,” said LuAnn, who is a social worker who advocates for senior citizens. “It’s worked for us.”

Alternatives have certainly paid off for this pair. “We feel like we’re locked into a really nice utility rate for the next 20 years, regardless of what goes on in the rest of the economy – or the world, for that matter,” said LuAnn. “We are energy independent, earning money on our investments, living more comfortably and loving it.”

Now that’s one recipe for a good night’s sleep.

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