The Streetlight Effect in Energy
Why Fragmented ROI Keeps You Vulnerable
That was exhilarating. What happens when a diagnostician turns the Organisational CT Scan upon their own family home? Waiting twelve months to absolutely find out whether you were right, or if you simply threw away the family fortune.
I recently analysed our 1907-built house as a living system. The objective was to eradicate tangible geopolitical risks, mitigate financial friction, and engineer a profoundly more resilient and welcoming environment.
A year ago, we deployed considerable capital into a tripartite energy matrix: a 20 kWh home battery, a 25-panel solar array, and a 100% electric heat pump. Crucially, we executed this all at once, not piecemeal.
We knew solar arrays worked. We knew batteries sounded excellent in theory, and the incredible claims of generating three times the energy for every 1 kWh supplied to an air-source heat pump sounded too good to be true. Yet, few had dared to experiment with whether this would function within a house built over 120 years ago. We had no cavity walls, minimal insulation, and merely older double-glazing retrofitted into original hardwood frames. Conventional wisdom pointed to an inevitable investment failure. If one were to simply read the mainstream media, one would run a mile from such a seemingly mad upfront expenditure.
However, as I reviewed hundreds of papers and articles, an outline began to form—a wireframe of something vastly more valuable. The catalyst for this thinking was our experience living with an electric vehicle (EV).
Our EV had proven significantly more reliable, dependable, and comfortable than any traditional internal combustion engine (ICE) vehicle we had leased over the past three decades. But there was one specific variable that made the difference: the flawless, end-to-end integration between hardware and software. This orchestration mitigated the risk of mechanical or operational failure. If an anomaly appeared, an autonomous software update was deployed. These software-driven EVs actually improved with time—an impossibility with traditional ICE cars.
This prior due diligence served as the intellectual foundation for our home. I hypothesised that if three independent hardware systems could be orchestrated by a single software ecosystem to operate as 'ONE', the mathematics would ultimately validate the investment for our 120-year-old house.
My peers called me crazy. They warned that the investment would never yield a return and that the heat pump would leave us freezing in a poorly insulated, century-old house. Their reaction is entirely understandable. In fact, it reflects a principle I see in boardrooms daily: we are actively trained to evaluate operations using 'old rulers'—metrics that practically guarantee we will talk ourselves out of progress.
The Illusion of Fragmented Metrics
If you measure the future with tools designed for the past, my peers were entirely correct. Viewed as disconnected line items under the 'streetlight effect'—the cognitive trap of only seeking value where it is easiest to observe—the returns are abysmal.
Let us be mathematically precise about what this capital allocation truly represents. In corporate finance terms, we are discussing a strict CapEx (Capital Expenditure) deployed from retained earnings. When a family contemplates an investment of approximately €30,000, they are deploying net, post-tax income—their highly protected Free Cash Flow (FCF). To accumulate €30,000 in liquid 'dry powder', a household must typically generate closer to €60,000 in top-line gross earnings. The tax authorities claim their share long before a single solar panel is procured, representing a brutal EBITDA-to-FCF conversion drag.
Therefore, a capital deployment decision is never merely about the cash at hand; it must clear a steep hurdle rate, weighed against the sheer, arduous operational effort required to generate that capital in the first place. A family can only allocate the €30,000 net, yet they had to double their top-line output just to secure it. When measured against this unforgiving reality of gross earning effort, the fragmented Return on Invested Capital (ROIC) looked like this:
Battery: 14.2-year payback.
Solar: 13.4-year payback.
Heat pump: 25.4-year payback.
This is exactly how organisations evaluate their operations. They scrutinise siloed business units, fixate upon the friction of the initial CapEx, and conclude that the investment is structurally unviable. They perceive a 'broken O' and fixate upon the Relative, entirely missing the Absolute.
Examining the Interconnected Network
Diagnosticians do not look at isolated parts; we examine interconnected networks. Connecting this hardware transformed our household from a passive consumer into an 'invisible' micro-utility capable of stabilising the energy grid.
This transformation requires a provider (in our case, Zonneplan) that understands the critical interplay between hardware and software to orchestrate 'invisible' value. When you view the system holistically, the 'Shadow Data' models a profoundly different, Absolute reality.
After a full twelve months, the verified numbers are in:
We consumed 30.76% more electricity.
We burnt zero gas (this held the biggest risk).
Total utility energy expenditure dropped by >78%.
The True ROI: From Cost Recovery to Compounding Yield
The actual systemic payback for the entire matrix? Approximately 6.8 years (net). But the break-even point is merely the first chapter of this financial narrative. Where the 'old rulers' fail most spectacularly is in their inability to measure what happens on day one of year seven.
Once that 6.8-year threshold is crossed, the initial CapEx is entirely recouped. From that moment forward, the matrix transitions from a liability in recovery to an unencumbered asset generating pure, compounding Free Cash Flow.
Consider the operational lifecycle of the underlying hardware. The solar array carries a robust 25-year performance guarantee, and the home battery is warranted for 15 years. The heat pump—often misunderstood by the market as a fragile novelty—is structurally more reliable than a legacy combustible gas boiler. With routine servicing, it is approximately 33% cheaper to own and maintain over its lifespan, permanently suppressing our baseline operational expenditure (OpEx).
For the subsequent decade—and in the case of the solar array, nearly two decades—this interconnected system will operate as a high-margin annuity, delivering unchecked yield long after the initial capital has been returned. That is the authentic Total Cost of Ownership (TCO) and true ROI calculation that fragmented, silo-based accounting consistently obscures. We did not merely buy hardware; we acquired a long-term cash-generating asset.
And what of the physical reality of living inside this matrix? This compounding financial value held true despite a significantly colder, snowier start to the 2025/2026 winter. As for my peers' warnings that we would be left freezing? Far from it. We actually raised our baseline thermostat by over 10%. As my wife Victoria recently noted, our consignment of extra-thick jumpers and Snoodies™ has officially become obsolete.
The Sovereignty Dividend: Measuring Emotional Freedom
Financial mathematics, however, serves merely as validation. The true value is immeasurable by spreadsheets.
Today, in March 2026, global crises are wreaking havoc upon our energy markets. The 'invisible thread' connecting international conflict to every family's energy bill is ruthless and direct. It is precisely this thread I sought to sever four years earlier. Fixing the Relative in isolation never reveals the hidden Absolutes.
After our first full year operating this system, we hold the evidence. We have insulated our family castle from the contagion of global instability. Such sovereignty is worth ten times the initial investment. That emotional freedom, for us, is priceless.
The Weight of Absolute Truth
A peer recently remarked to me that being a diagnostician is a fascinating path, but one that requires absolute honesty. He is right. People rarely enjoy having their 'broken O' pointed out, but the pursuit of systemic truth is entirely worth it.
I am sharing this deeply personal financial and operational data for a single reason: transparency. I place absolute accountability squarely at my feet. If my systemic mathematics is flawed, I inflict a severe capital 'misallocation' upon my own family. That carries the full weight of responsibility.
But absolute truth transforms understanding. The invisible remains so only until measured. Whether I am decoupling my family home or exposing a €4.92 billion gap in Enterprise Value at Vinted, the lesson remains identical.
The 'old rulers' will keep you dependent and vulnerable. The new rulers are on the table. Let’s see who is ready to use them.
The Diagnostician's Blueprint
For executives, operating partners, and value creation teams wanting to de-risk their portfolios and reverse-engineer the exact mechanics of how to begin measuring these 'invisible' new paths, the foundational framework—the Organisational CT Scan—is detailed in my book, Who Moved My Customers?
To buy a copy choose Amazon or Signed Copy by the Author.
