Investing in energy conservation: Are homeowners passing up high yields?

Energy conservation is examined as an investment option for homeowners. Conservation technologies produce monetary benefits through reduced fuel costs. Calculations suggest that many conservation measures have rates of return significantly higher than alternative investments in stocks, bonds, and real estate, yet the level of conservation activity is inconsistent with these high yields. Several barriers exist which inhibit investments in conservation; it is perceived as risky and the cost of obtaining reliable information is high. Public policies to encourage conservation should focus on reducing the risk of purchasing energy saving devices by improving the accuracy of energy savings estimates.