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 Energy efficiency choices, unlike many other investments in your home, help pay for themselves in lower energy bills. For this reason many consumers want to know how quickly the cost of the efficiency measures will be paid back in energy bill savings. Dividing the cost of the project by the annual savings gives you a "simple payback" number. For example, if you were going to replace 10 windows, the added cost of high-efficiency windows was $300, and the annual energy savings was $100, the efficient windows would pay for themselves in three years.
Because energy efficiency improvements — like other home improvements — cost money, you may need financing to help get the job done. The good news is that energy efficiency financing has some advantages over conventional financing, due mainly to the fact that energy efficiency investments produce savings. These energy bill reductions are often larger than the loan payments, producing what the bankers call "positive cash flow." This means that efficiency loans help pay for themselves by freeing up other income that would have gone to pay energy bills. More information on remodeling and the benefits of refinancing your home for energy-efficient improvements.
This program does not calculate the economics of your efficiency choices, because the costs and savings for your house depend on many details not captured in the program. Costs for a specific measure can depend on the size and construction of the house, local material and labor costs, and other factors. Savings can depend on similar size and construction details, actual energy prices, number and behavior of occupants, and other factors. For these reasons we recommend you obtain a detailed energy audit to develop specific cost and savings figures for energy projects you want to undertake.
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