WHAT IS THE PAYOFF? Refrigerators are the energy hogs of home appliances: The average refrigerator uses 1,383 kilowatt-hours of electricity per year. That's $125 annually, based on the national average cost of residential electricity. Buy a brand-new GE Energy Star fridge, which will save you about $100 annually, and the appliance will pay for itself in savings in less than eight years.
A Toyota Prius pays for itself even faster. When comparing it with a similarly equipped Honda Civic Sedan EX, the Prius has an up-front cost of about $2,700 more. But with a gas mileage of 60 mpg in the city versus the Honda's 30 mpg, the Prius costs $775 less per year for every 15,000 miles driven - which means the price difference is made up in about three and a half years.
The biggest no-brainers for a going-green payoff are compact fluorescent lightbulbs, which cost about $4 for a 100-watt equivalent. You can get a standard 100-watter for about 50 cents, but the compact fluorescents will save $4 in energy in one year and about $30 during their life span.
Patagonia's recycled-polyester saga is instructive, though, in that it reveals a few good reasons why it can be more expensive to buy an environmentally friendly product than one that is not. Many green companies are smaller than their conventional counterparts, so they lack the buying power and economies of scale that can bring the cost of materials down. Their components may just be more expensive, period - like sustainably grown, fair-trade coffee beans or the hybrid engine in a Toyota Prius. And the simple laws of economics help too. Once other apparel manufacturers start buying recycled-polyester fabrics and organic cotton, for instance, production will go up and prices will go down for everyone.
"Supply and demand," says Nicole Goldman, an interior designer in Cape Cod who's opening an all-green building-products store this month. "For years, solar-slash-photovoltaic was very expensive. The market was so small that only a few suppliers made it. Now it's matured as a product. We'll see the cost come down because demand is up, so more people are willing to produce it."
Companies selling everything from organic milk to recycled-glass countertops to furniture made of reclaimed wood each have their own "why it costs more" story to tell. Taylor Maid Farm's certified organic coffees and teas cost more in the raw, so they have to cost more on the shelf; the company buys tea from small organic farms at $1.95 a pound, whereas conventional tea is available from big suppliers at 35 cents a pound. Zwanette Design, a sustainable furnitur company in San Francisco, pays $179 per four-by-eight-foot sheet of fast-to-regrow bamboo, while a sheet of maple costs only $120. Stonyfield Farm - whose president and CEO, Gary Hirshberg, has been a poster boy for the organic movement - xplains in its publications that it's not just the higher per-hundredweight cost for unprocessed organic milk that makes its yogurts, cheeses, and other dairy products more expensive. It's transportation too. "We are able to pick up conventionally produced milk from neighboring farms, often just a few miles down the road from one another," reads the company brochure A Practical Guide to Understanding Organic. "Our organic dairy farmers may be as much as 50 miles from one another, so our organic-milk transportation costs are double that of the conventional." Earth Weave Carpet Mills, which makes environmentally friendly, pure-wool carpet, spent big bucks developing a non-urea-formaldehyde adhesive for its carpet backing, so its cost of doing business is higher than that of others in the carpet industry that are still using the readily available urea-formaldehyde adhesive.
"When I look at the companies in our network, they're charging a premium if ingredients or the cost of doing business is more," says Deborah Nelson, executive director of the Social Venture Network, a coalition of socially and environmentally conscious companies. "If they can do their business at a better price, that's a competitive advantage."
Nelson gives the example of New Leaf Paper, which makes a range of green paper products. "Today, given the way the industry is structured, it costs more to create postconsumer recycled paper than it does to use virgin wood," she says. "If you want to be part of the solution, and you don't want to be involved in the destruction of old-growth forests, you have to pay a premium for that."