Do energy efficiency improvements
pay off?
The answer is a resounding YES!
Independent tests of the financial viability of efficiency improvements include:
- Rate of Return higher than most growth and high yield investments
- Payback in a reasonable time
- Total Lifecycle Payback
- Net increase in property value with respect to system cost
Let's say our home is 2,000 sq ft and averages $220 per month in utility bills. In the Phoenix area, at least 50-60% of that bill is due to the costs of heating and cooling your home. When you weatherize a home by duct sealing, air sealing, installing a radiant barrier and better attic insulation, you save between 20-40% off of your heating and cooling energy costs. So let's use the average homeowner savings of 30%. Doing the math, that's $220 X 50% X 30%, or $33/mth.
So, if you could drop your bill by $33 per month it would put an extra $396 in your pocket over the course of a year. If you have a higher energy bill then the total will be even larger.
Now saving an extra $396 a year is great, but it's actually BETTER? Why? This is AFTER TAX MONEY. This means if you were in the 20% tax bracket, you would have to EARN about $475 to end up with $396. So the REAL value is $475 per year.
Ask yourself "How much would I be willing to invest to get $475 back EVERY year"? For a 2,000 sq ft home, the average investment is less than $2,000, after tax credits and utility rebates. So the RATE OF RETURN on your investment is OVER 20%!
Because these type of improvements last for more than twenty years, the total lifecycle payback is many times the original investment as well.
All these numbers and assumptions are based on energy rates staying exactly the same. Over the past twenty years energy rates have increased 5.4% per year. When rates go up the payback and return on investment is even greater.
Is it worth it to invest in energy efficiency improvements? Unless you can guarantee at least a 20% return on your investments the answer is YES.
And lastly, investing in energy improvement projects increase the value of your home - at least 10 times the annual savings in energy costs. That is because a home that costs less to operate, all things being equal, is worth more. In our example here, that is $4,750 on an investment of about $2,000!
Start saving today! To schedule your Home Energy Audit appointment, call 480-299-7640 or fill out the online form today and an energy consultant will contact you.
