Thursday, January 08, 2009

Long term savings?

This was just a little thought experiment, so try not to take this too seriously. I saw someone quote some numbers recently to the effect that a Prius gets ~46 mpg, while a comparably sized standard vehicle gets 31 mpg. The price difference between these vehicles was said to be $7000.

So, I thought to myself . . . how long do you have to drive that Prius to make up the price difference?

Feel free to check my math, but here's the formula I used:

ΔE * G * M = Δ$

Where ΔE is the difference in fuel efficiency of the vehicles, G is the cost of gasoline, and M is the number of miles you have to drive to make up Δ$, the difference in cost between the two vehicles. Efficiency, in this case, has to be put in gallons per mile to work out properly.

Anyhow, I estimate that if gasoline were running $4/gal. again, you'd have to drive that Prius for 175k miles to make up that $7k price difference.

That's not a good number, especially because it only gets higher when gasoline is cheaper. This also doesn't take into account any differences in maintenance costs, since I have no idea what that might be. Unless you're driving that car a lot, it's going to take a very long time to make up the price difference on gasoline costs, and it's entirely possible that by the time you've driven the car that much, vehicles at least as efficient (if not more) will be similarly priced as the non-hybrid.

I only bring this up because I heard on the radio this morning that part of Obama's plans for reducing government cost is to make all government buildings more energy efficient. I don't know what goes into such measures, but I'm betting it will be expensive. The question is, however, what's the return on investment? Or more precisely, how long will that building have to stand before that investment is returned?

If it's anything like our Prius example above, it could be decades before that cost is made up, which seems like the intent is more to pander to environmental groups than offer any substantive benefit to the tax payer. Perhaps I'm just being cynical, but I haven't heard anybody challenging him on this one yet.

1 comment:

Ryan said...

After the building is standing for decades there will be more money being pumped into building maintenance