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August 08, 2005

Solar & Irrationality of Market

A new trend are "zero-energy homes" which use solar and other energy saving technologies to cut energy bills to almost nothing. They cost an additional $18,000 to $25,000, which means they pay from themselves within seven to twelve years in California.

Now, if the marketplace was rational, every home in the state would have them, since a rational marketplace would price their resale value at far more than their cost.

But we have bubble economics in housing, where unreal speculation no doubt crowds out any rational incentives for investment in saving both money and the environment.

Posted by Nathan at August 8, 2005 12:03 PM