Tag: ROI

This tag is for ideas that have a high return on investment for the amount of capital introduced.

Submitting a test case to the Green Fund for consideration

The $100 million Green Fund was announced last year in order to showcase the coalition’s commitment to finding scalable ways to fight climate change.

But since then, not a lot has happened. On the 1st of March I received an update on the progress of the Green Fund. The update read as follows.

Good afternoon, 

You are being sent this email because you have asked to receive updates on New Zealand Green Investment Finance (NZGIF). The following update has been placed on our webpage : https://treasury.govt.nz/information-and-services/commercial-portfolio-and-advice/new-zealand-green-investment-finance and also on our LinkedIn page.

What now?·       NZGIF is in its establishment phase. This follows the appointments to the board late last year of Cecilia Tarrant (Chair) and David Woods (Director). There is a lot to do before NZGIF will be fully open for business.·       

The next step is to complete the Board appointments.  Applications have closed and are being considered. Appointments will be completed by mid-May.·       

We’re also working on company incorporation. We are in the process of developing the company constitution and other foundation documents, which will enable NZGIF to be incorporated by mid-May. ·       

When will NZGIF be operational? Exact timelines will depend on decisions directors make; however, we expect to see NZGIF fully operational by the middle of the year. Thank you for your continued interest in NZGIF.  We will provide further updates on the priorities and the process for applying for investment as this is made publically available. 

Regards,New Zealand Green Investment Finance

I guess that from an avid viewer’s standpoint, who has read the headlines but who is as yet uncertain how the fund will work, I am a bit worried from the above email that the fund may be losing traction. Which is a shame, because I desperately need some money to go green. 

I recently realised by way of a spreadsheet that I can reduce my travel emissions working as a sales consultant by as much as 20% by switching to a hybrid electric car. The decision was first of all a financial one: switching to a hybrid would pay for itself over ten years in the cost of fuel savings that I would achieve alone, essentially providing close to a 10% ROI. (The return on investment is so high because I am looking at second hand hybrids in the $7k range. A new hybrid will not achieve this.) I need soon to update my car anyway, so this seems to be a wise way to go about things.

In my view, this is the sort of investment that the Green Fund should be exploring – environmentally friendly initiatives that also achieve a return on investment in excess of the long term government bond rate. But it remains to be seen in practice whether this would ever happen. The nature of the second hand car market is that it is rapidly moving, with good deals disappearing off the market every day. The fund, on the other hand, seems to be moving fairly slowly. 

So I am going to test the waters by sending them an email with the spreadsheet attached. I am interested to hear whether they respond at all, and if so, whether they will be able to assist at all in my scenario. 

How buying a second hand hybrid can yield a 15% ROI

The bane of my existence has become the bridges in and out of Levin. Having accepted a new and challenging role in the Horowhenua region, I now am forced to relinquish my good habits around cycling to work (which have netted me an 8kg weight loss in the last few months in addition to hundreds of dollars in savings) in exchange for driving the admittedly slightly shorter distance, simply because the bike cannot negotiate the challenging high speed bridges in and out of Levin safely.

This is a big step backward for my plans to reduce my environmental footprint and lower my petrol costs. Not to mention that with my new role, I may be expected to travel great distances each week. But with each change comes the opportunity for positive adjustment.

I basically need to replace my car anyway. There’s no rush, but there has been an unsightly bit of cosmetic damage that would cost almost as much as the car is worth to repair. The main question is what type of car do I aim to get next – a petrol car or a hybrid? My main focus is to drive a car that at levels of high (read: sales career) usage, realistically pays for itself over time. There’s no point buying a car that’s cheaper upfront if the operating cost is over $1000 or more extra per year. If this leads to a reduction in carbon emissions that is all well and good as well. 

The main problem with hybrids has been cost efficiencies. Hybrid cars have often been reviewed negatively in the past, particularly in the US where many of these reviews originate from, simply because the economics do not stack up – the comparatively miniscule savings in fuel does not offset the higher capital cost of the new product. But this is not so much the case in NZ, and in particular is not so much the case in the second hand hybrid market, which is now flooded with apparently reasonable quality vehicles available for even less than $10,000. Part of the reason for this is that New Zealand taxes fuel far more heavily than the US, meaning that many of the reviews you read about hybrids ought to be discounted in the New Zealand context. 

I’ve scoured online sites and found a number of second hand hybrid cars for what I would consider good value – there is even one currently on sale for $2.50 with no reserve, although it has over 170,000 kms to its name. But, more to the point, there are a range of cars in the $6,000 to $8,000 price range, available for immediate purchase. It’s not like there’s just one or two of these options – there are dozens in this price range, each with well under 100,ooo kms to their odometer. Of course, with Trade Me, you’ll almost certainly need to make a trip up the line to get to it. 

I’ve done a spreadsheet which covers the calculations to justify a ROI of over 15% at the price point of $6995. It’s important to note that this calculator assumes continued fuel price inflation of 2.2% per year (around about the 10 year average in NZ). Because I’m replacing my car anyway, all I’m really doing is stripping the operating cost in a way that saves me money and pays for the new investment.

https://www.balancetransfers.co.nz/wp-content/uploads/2019/03/Jazz-vs-Hybrid.xlsx

The next thing to look at is how I can finance it, or if I have to pay cash. That is a question for another article, but one of the benefits of having a profitable business is that I can potentially put a lease through it. 
A car that pays for itself in six years that’s significantly more eco-friendly for a traveller? Hard to say no to. 

Training kids to measure smart meters

This thought occurred to me on the way to work the other day, and might be one I develop a bit further in the future. 

In previous articles I wrote about how it was essential to measure one’s own home energy use during day time before going so far as to install a solar power system. Without a comprehensive knowledge of the details of your household power consumption, you really can’t make any intelligent decisions regarding solar power, and in fact, many installations completed without paying close attention to home energy use will fall a long way short of expectations.

The problem is, not everybody has time to go and stand outside the front of their smart meter each hour and record data for several weeks before they decide to install. People have lives, believe it or not, and recording the kWh currently consumed by your household each hour on the hour is not high on their list of priorities.

So, who would be good candidates to collect this data? Not the parents in the household – the children in the household. In fact, one could make a fun family project out of it. 

Need to keep the kids occupied during school holidays? Give them an exercise book and send them out to take readings off the smart meter. 

Of course, it may need some clever packaging to make it happen – but if kids could be convinced to collect this data on behalf of parents, it would then lend credibility to many households when making decisions about their renewable energy generation. 

Not to mention it would be a great way to teach your kids valuable skills in applied mathematics!

Is vegetarianism Pareto efficient?

This occurred to me the other day when I was chowing down on some sausage and black lentil soup.

Sausage and black lentil soup is a variation of the recipe for black lentil soup. In fact, there is only one difference, in that you add sausages to the soup.

The cost of black lentil soup, for two servings, is around $1.40. The cost of sausage and black lentil soup, for two serves, is around $4.90. The difference, of course, is due to the sausages, which add 250% to the cost of the soup.

The carbon emissions will differ depending on the type of meat in the sausage. It’s very likely, however, that the same sort of increase will be reflected in carbon emissions.

Not to mention you don’t have to raise an animal just for the sake of eating it.

Now I’m no vegetarian – not at the moment anyway. But this is driving the point home for me.

Vegetarians have been saying this for years, but I’m only just joining the dots. The question is, how to get this point across to the general public?

Did CRC improve my ebike battery efficiency by 35%?

I noticed this on my way in to work this morning. December was a very busy month for me, and with the ebike having heavy use, I nonetheless had very little time to give it the TLC it deserved. In particular, I fed it no CRC across about 7 weeks and at the end of it the ebike was squeaking like a baby mouse.

My standard trip into work during this period consumed around 35% of the battery charge. This would leave me enough charge to get home and enough to pop down to the shops if I needed to.

Last night I applied CRC for the first time in a while. The result this morning was that the bike rode incredibly freely, with far less squeak, and in addition to that, only took me a 26% charge to get to work!

That is an improvement in battery efficiency (for the same ride, on the same settings) of just under 35%.

While this won’t make much practical difference in how I use the bike, the implications are massive.

It means I could go an extra 10 kms to and from with a well maintained bike for each recharge.

It also means that problems I attribute to the battery may in fact just be not enough oil on the chains.

I’ve always applied CRC in the past more as a chore, rather than something that could actually help me. I didn’t realise that by failing to apply CRC I was making my bike ride a third harder!

But now with ebike batteries, these sorts of minor things are much easier to quantify.

What is the ROI of a rice cooker (solar powered) with calculators

So my solar powered slow cooker diet is going well, with loads and loads of stress free and delicious food experiments under way, utilising great local organic Kapiti produce. I wanted to take a further step in the sustainability direction, so I bought myself a rice cooker to work along with the solar panels.
Continue reading “What is the ROI of a rice cooker (solar powered) with calculators”

Otaki Motel has consumed one colour ink cartridge in 12 months

I’m very pleased to report that we have not had to change colour cartridges in over a year. This is a result of some sound planning that I undertook regarding printer cartridge consumption in September last year.

Continue reading “Otaki Motel has consumed one colour ink cartridge in 12 months”

Our plan to cut winter heating costs by 67%

I like to think of a motel as one big eternal cost-cutting operation. The way we can afford to pay our staff more is by keeping overheads as low as possible.

Continue reading “Our plan to cut winter heating costs by 67%”

Parking Savings Calculator: How much do you save in parking fees by riding to work on an ebike?

Here is a nice and simple calculator to help you figure out how much you will save in parking fees and fines by travelling to work and parking an ebike instead of a motorcar.

Continue reading “Parking Savings Calculator: How much do you save in parking fees by riding to work on an ebike?”

What’s the ROI for an ebike?

I got in the habit of riding my bike to work every day while visiting my mum up in the Coromandel and I’m finding it a rather hard habit to shake. The problem is, now my work is 25 km away instead of 5 km away. Could an ebike help with this situation?

Continue reading “What’s the ROI for an ebike?”