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Plan Well, Retire Well

Saving and investing your money
Home Energy Calculator

What's the Payback Time for Home Energy Improvements?


After months of cold winter days, and paying to heat my home, I'm ready in the spring for new ways to make my home more energy efficient! This time of the year is also when many homeowners like myself scramble to put home improvement plans into action, especially those plans that require hiring expertise to do the work.

This year we're finally replacing the siding on our home! When we moved in, our home inspector told us that we could wait a few years before we needed to deal with the aging paint and siding boards. With one expense or another, the siding replacement has been pushed back year after year. But now's the time!

Deciding to replace the siding was the easy decision. However, one home improvement idea often spurs other ideas and decisions that aren't so easy to make! For example, if you're removing all the siding and window trim and replacing it, this might be a good time to replace old windows too. Well, we've been slowly replacing old windows over the years, and it was relatively easy to decide to pass on this thought.

However, the more difficult decision has been, do we want to improve the insulation in the house walls? Certainly at first glance this seems like a fantastic idea. After all, it's not every year that you have access to the space between a house's inside and outside walls. A quick search at www.energystar.gov produces a colorful map that shows the recommended insulation levels for retrofitting existing wood-framed buildings; for our zone, it's recommended that an insulated wood-frame wall add R5 insulative sheathing before installing the new siding. So far, so good. We contracted with the siding company to do essentially this.

But then in a conversation, we mentioned that we don't think our house currently has any insulation between the wall and outside siding. "Had we considered blowing in insulation into the empty wall cavity before installing the new siding?" we were asked. No, we hadn't. But sure enough, on closer reading, there's the recommendation to do this on the energystar.gov website.

Now my husband and I were in a quandary. The siding job is just about ready to launch and here was another possible step to add in! On top of this, we were already committed to our budgeted home improvement amount for the year, without this addition. What should we do?

One way to look at home energy improvement projects is the return on the investment. For example, if you replace traditional light bulbs with CFLs (especially in high use fixtures), your cost for the new light bulbs will be returned in savings on your energy bill in one year. Over the lifetime of the CFL bulb, your savings will give you an estimated 62% return on your investment. With that kind of return and the relatively low-cost of light bulbs, this is a home energy improvement that definitely makes sense.

Just what is the return on wall insulation? I regularly recommend an excellent online tool, Home Energy Saver, at http://hes.lbl.gov to evaluate the costs versus the benefits of home energy improvements. At this website, you input information about your home and then see how changes to your home would save in energy costs. You can choose to use default information or you can add more detailed information about your home's structure, windows, appliances, etc. Save your session number and you can come back and add more information to your home profile.

Using this website calculator, I put in my home's information and was able to look at the number of years for the improvement costs to payback. It was a lot of years! I also looked at other home improvement upgrades the calculator recommended; there are several that are relatively easy to implement with a quicker payback time.

When considering the energy savings information, in combination with our budget situation and the inconvenience of adding another step to the current construction job, my husband and I decided to not add blown-in insulation. In your situation, the decision might be different. However, this reminded me that when deciding on home improvements, it's important to take many variables into account including:

  • your budget,
  • length of time you plan to stay in your home,
  • and potential gains (in costs as well as improved satisfaction)

before deciding to do the improvement.



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