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Return on Investment on Energy Efficiency Implementations

NIzerifin
7 years ago

I realize that this is one of those questions that involve so many variables that it's hard to give a concrete answer, but I wanted to at least take a stab at getting some input.

My wife and I are in the early stages of researching the specs for our near-future home build. We certainly want our home to be energy efficient, but do not want to break the bank making it happen.

So, if you had to rank the various implementations that make a home "green" and energy efficient by their cost effectiveness (money savings compared to the initial added investment cost over standard construction practices) what would your order be?

We're in the process of meeting with architects and want to bring a decent understanding of these items to the table. Fortunately, we're only interviewing firms with experience working on LEED projects.

Thanks!

Comments (49)

  • User
    7 years ago

    As a former builder, to me, thinking about the building envelope is really where to start. When I built my own home, for instance, I went with SIPs over stick framing because of the efficiency. I'd also look at your HVAC systems quite closely.

  • just_janni
    7 years ago

    Building envelope and HVAC / air quality, as well as site orientation with appropriate shading or ability to take advantage of passive heating. Having the right builder and subs that realize construction care an adherence to the principles of a tight envelope are important.

    DO NOT go crazy. We're shooting for LEED platinum - but there's little "value" in it for the homeowner - and LEED takes "weird things" into consideration.

    Energy efficiency is a fairly small part of LEED - it's much more holistic - taking things like "walkability", infill, electric car charging stations, how fast your water heats at the longest run, etc.... Much of that stuff isn't (IMO) of value to the homeowner, it's for the builder / developer as they may market the home.

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  • cpartist
    7 years ago

    IC and Janni gave you a great start.

    One of the best things is to build just what you need and not what you think you need. For example, do you need the island seating, a separate dining room and a dining table in the kitchen? Do you need a family room, an office and a living room? I think you mentioned you're hoping to have 1-3 children in the near future. Can a guest room/office now become a bedroom later?

    If you haven't read The Not So Big House by Sarah Susanka, I highly, highly recommend it.

    Another way to save is to not build with jigs and jogs. A square or rectangle is the most energy efficient.

    Orient the house to get the best passive solar heating/cooling. A lot will depend on where you live but in general a the longest sides of the house should face N/S and the shortest sides E/W. Most windows on the south facing side.

    Where are you building because that too will determine the best type of materials to use.

  • Oaktown
    7 years ago

    On the $ side of things, check for rebates, credits, etc. that might be available to you, for example from your energy provider. Some things that might not be cost effective for others might turn out to be a great deal for you if you have access to special incentives.

  • mushcreek
    7 years ago

    We built a fairly energy efficient house, and found that there is more to it than just money. The comfort is a very real thing, too. Our house is ICF, and there are no cold spots, warm spots, drafts, etc. This method also yields a very strong and quiet house. We also spent more on windows because better windows will last longer in general, maintaining the energy rating they start with better than cheap windows, which may sag and warp over time.

    We also spent a lot of time on site orientation, and carefully considering just how much house we wanted and needed. Our house is small by modern standards, and a simple rectangle. Will the extra money spent on efficiency ever pay back. I honestly don't know, but it was worth it to us.

  • PRO
    Springtime Builders
    7 years ago
    last modified: 7 years ago

    Indoor air quality is closely tied to energy efficiency and home performance improvements. Hard to put a price on health. Green, energy efficient and healthier construction results in better resale value and in our area, less days on the market.

    Energy efficiency costs more compared to what? 2006 or 2009 energy codes? Costs more, compared to the poorest performance allowed by local inspection departments? Personally, I feel that 2012 and 2015 IECC prescriptions are a good minimum level of cost effectiveness for energy efficient improvements. Better blower door testing minimums of the building envelope are an obvious detail that could greatly improve performance at very minimal upfront costs.

    Hiring an experienced third party energy rater or certifier like for Energy Star can be a great investment for navigating regional differences and requirements. Involve them early in the design process. The same goes for using builders experienced in good site design for energy efficiency.

  • lazy_gardens
    7 years ago

    1 - Minimize the space inside the "envelope". Less costly to build, less costly to run compared to a larger structure.

    2 - Make it as close to a cube as possible, without making it a dark cave in the interior. All those zigs and zags need sealing and are costly in terms of the custom cutting they require.

    3 - Take sun exposure and (in the north) winter winds into account.

    4 - Use the outdoors as much as the climate allows.

    5 - Think about using passive heating and cooling to the extent possible.

    • Replacing two fixed skylights with venting skylights in our 1880s house means that when it's cool outside I can pop the skylights open and get a nice breeze as the hot, stale air goes up and out. Well worth the money.
    • Make sure you can use the cooling effects of cross ventilation, especially if you have a 2-story. Opening windows on opposite sides of the two floors leads the cool outside air through the house, up the stairs and out.
    • A sunporch where it will be most useful in the winter.

    6 - Beyond a certain price point, the extra money does not buy better function, and in some cases may actually get you less. Get the functionality - the specifications pinned down first, then look at products that meet the specifications.

    A well thought out design that mixes of low and moderate cost materials that meet the functional specs, with a judicious use of "bling" will get you a long ways.

    7 - If you have to have a temporary solution, make it in a place where the effort and cost of replacing will be as low as possible, and the removed stuff recyclable. Or do without.

  • User
    7 years ago

    Most energy saving or convenience features have to be designed in the initial plans.

    Years ago, I designed an earth contact house with several passive energy saving features. Many of those features could be incorporated in conventional buildings.

    Southern exposure windows can be larger, and have heavy drapery inside. Maximum heat in winter, minimum in summer. Sun shading screens that are moveable but allow a view.

    Preheated water to the water heater. A series of windings of supply water to the heater contained in a built on on the south side of the building. A big box under the windows kind of thing, filled with sand and having a clear cover. The sun heats the water before it gets to the heater and in some cases, gets the water ho9t enough the heater seldom operates.

    Ridge vent roof. Soffit vents supply incoming ambient air as the ridge vent allows hot attic air to escape at the highest point in the attic. Works on hot air rises principle and works regardless of weather, needing no power, and is the cheapest venting option long term.

    Insulated siding. Coupled with internal insulation, siding insulation minimizes exterior noises, adds thermal efficiency, and is a install and forget option.

    Newer options include air exchangers that provide fresh air heating as stale interior air is exhausted. Keeps odors, contaminates, and heating bills low while providing continuous fresh air.

    Recirculating fans. Moves the air from lower parts of the house to higher areas and vice versa. Cool air in the summer gets moved to second/etc. floors and warmer air in winter to cooler areas.

    Those two options have a relatively high initial cost(in equipment and ducting), but provide pay back for the life of the building.

    In areas where daytime temps/sun are high and night time low(desert), thermal mass provides night time heating assistance. One reason buildings in the desert are rock/adobe/etc.

    The key is to find the methods that suit your location and budget.

  • mushcreek
    7 years ago

    We've been keeping good records of our energy usage for two years now. Our ICF house is in upstate SC, a fairly mild climate. Winter lows average 20 degrees or so, although we've been down near zero. Summer highs are in the 90's, and occasionally over 100. Our A/C adds about $20 per month to our power bill during the hottest months, and heat adds about $40. We are using two small mini-split heat pumps, but rarely run both of them. Our total HVAC cost per YEAR is about $250; less than we paid for one month in FL. Although our basement (also ICF) has no HVAC, the temperature ranges from 60 in the winter to 76 in the summer, so almost no need for HVAC. It certainly wouldn't take much additional to move the temp a few degrees.

    We were on a very tight budget for our mostly DIY house. We opted for ICF, careful siting, good windows (Marvin), and careful sealing of the structure to control air leakage. We gave up square footage and niceties such as soapstone counters and $800 faucets. Will we ever see a ROI on the extra money spent? I have no idea, but we're very happy with the choices we made. We also used all-LED lighting to further save.

  • User
    7 years ago

    The answer depends on how long you will own the house and how much you are able or willing to invest at this time.

  • PRO
    Charles Ross Homes
    7 years ago

    With regard to energy efficiency and return on investment, the analysis becomes an incremental cost/incremental return calculation.

    I concur with Ichabod Crane that investing in a good, energy-efficient and sustainable envelope is where to focus. You'll be more comfortable and the efficiency of all systems inside the efficient envelope will be less important than they would be in an inefficient one. Do keep in mind potential indoor air quality issues as was noted by Springtime Builders.

    I think you'll find chasing residential LEED certification to be an expensive proposition, but it will make interesting conversation at cocktail parties if you are in the company of architects and engineers (spoiler alert: we're not that entertaining at parties.) In addition, hanging the LEED certificate on a wall in your home reduces the amount of artwork you'll need to purchase to decorate it.

  • NIzerifin
    Original Author
    7 years ago

    @Charles Ross Homes

    lol

    We're not worried about getting that certification, but do want to implement some of the more cost-effective energy-saving measures.

  • energy_rater_la
    7 years ago

    then hire an energy rater to review your plans, discuss your budget,

    the wants & needs of your occupancy.

    this rater can make specific to you/your build recommendations

    that reflect your wants & needs.

    this rater will provide you a blueprint for efficiency,

    verify performance & installation.

    start at resnet or bpi for a pro in your area.

    established energy raters have insulation & hvac companies

    they have worked sucessfully with in the past.

    this will save you a lot of vetting companies.


    resnet raters provide cost analysis of each upgrade

    so that you can decide what is the best choice.

    that it is all based on your specific home.

    not everything is one size fits all..

    our software models the home to meet code, then to the

    level of efficiency desired.

    one example is SEER ratings of hvac.

    13 SEER is code....15 SEER is mid range efficiency...20 SEER

    high range efficiency, having the information to make these

    choices will allow you to make better decisions.



    building's thermal envelope, sealing of all thermal

    bypasses & air infiltration is the first step.

    having a plan for hvac. load calc for sizing reflecting

    the upgrades to the bldg envelope you chose.

    design & sizing of ductwork. hvac needs planning,

    not just last minute where it fits.

    rater will perform duct testing, blower door testing of house.


    just basic info, for your beginning stages of planning.

    where are you located?

    and btw...beware of 'green washing' one can get so caught

    up in the green aspect that they are susceptible to overpriced

    items labeled green.


    best of luck

































  • PRO
    Virgil Carter Fine Art
    7 years ago

    There are lots of good suggestions in this thread. My suggestions will probably seem so basic as to be insignificant, as compared with lots of the ones above which incorporate spiffy technologies.

    Energy efficiency begins with the lot/land selection. Assuming one is in the northern hemisphere, find a lot which allows and rewards a house being designed with the majority of the public spaces and large windows facing south. Maximize the length of the southern façade of the house and minimize the east and west façade lengths. Use the data of summer and winter sun angles for economical passive energy strategies. Incorporate strategies to deal with seasonal adverse weather--for example, reduced number and size of openings on north and northwest facing elevations.

    Utilize sound, basic passive energy features in the organization and design of the house, which fit the climate where the house will be located. For example, are heating or cooling loads the major challenge for the livability of the house? Are there prevailing winds which may be used advantageously?

    Before Mr. Carrier invented air conditioning, these sorts of issues resulted in regional design approaches for houses which made for highly distinctive architecture. Northern New England houses differed significantly from southern Tidewater houses, and the climate was the reason. Relearn these lost lessons!

    As others have said, pay attention to the external building envelope and use appropriate strategies for one's climatic location. Ceiling heights and passive ventilation, cooling and warming strategies can easily be used to complement the strategies for envelope design.

    Incorporated early and creatively in the design stages of a house, these strategies may be highly effective at very little additional cost.

    Not high-tech, but certainly high-thought! :-)

  • cpartist
    7 years ago

    Northern New England houses differed significantly from southern Tidewater houses, and the climate was the reason. Relearn these lost lessons!

    Do you have any links to where we can easily find out this info?

  • PRO
    Virgil Carter Fine Art
    7 years ago

    Cpartist, Google "designing with climate" and "role of climate in design of houses" and see if these help point you in a desired direction. "A Field Guide to American Houses" by Virginia & Lee McAlester is a standard reference for the types of houses in America, from the 17th century to the present. The authors catalog and illustrate all of the various types of houses in America in great detail.

  • cpartist
    7 years ago

    Yes I have poured over the field guide. :) Will google as suggested. Good stationary bike reading.

  • bry911
    7 years ago

    While I will leave most of this discussion to others, I will comment on the idea of ROI (others may have mentioned this).

    Don't think in terms of payback period and all of that stuff. Think about this like you think about many of your other life decisions - in terms of cash flows. Since we know from the other thread that you are going to be borrowing money we can figure that every additional $1,000 you spend is about $5.23 per month in additional mortgage payment. You should think about that expense while considering both the reduction in your electric bills and the increase in comfort. Note: this isn't perfect but really it is a good start.

    I agree with most people that smart design is much more important than some of the things that are sold to us as green.

  • energy_rater_la
    7 years ago

    op asked specifically for roi.

    as this is based on climate, it varies.

    energy cost and features report provided by energy rater

    provides this info. energy savings & roi.

    is there a way to send to individuals links on new and

    improved garden web? any pm or the like these days?

  • David Cary
    7 years ago

    I do think the mortgage payment is a pretty good rule of thumb. ROI is one thing and resale is another. In my area (Raleigh, NC), builder's mention HERS ratings in MLS listings - it is just starting. I suspect that energy costs will only become more significant over time. So when you sell in 10 years, it will be more important than resale today.

    Now that is certainly regional.

    Envelope costs can reduce HVAC costs to really improve their return. Unfortunately HVAC subs don't like this and builders are afraid of this. So you rarely get the savings unless you push it. Also - maintenance of HVAC is an important consideration. Fictitious example. Spend $5k more on envelope and save $2k on HVAC install costs. When compressor dies on smaller HVAC, it is less to replace. Even under warranty as you might get charged for the freon exchange anyway and bigger costs more. When the compressor fails out of warranty, it is even less. Note, cheaper system has cheaper repair costs. So spending more on fancy HVAC means spending more to fix later. Ask me how I know.

    Tight envelope with above code insulation, solar gain planning. Next is keep ducts in conditioned space. I like doing it with conventional insulation (cheap) by building room for the ducts rather than sealing the attic with foam. Last house, I put upstairs ducts between the floors. Your a/c will last longer if not placed in a hot attic.


  • just_janni
    7 years ago

    We're Americans - we LOVE to throw fancy / flashy stuff at problems (crazy HVAC stuff) and ignore less dramatic things like building envelopes, and correct shading / site placement....

  • mushcreek
    7 years ago

    I guess I'm not a typical American- I put a lot of study into siting, orientation, shade, and a robust, energy efficient envelope, and used two small, inexpensive mini-splits instead. Oh yeah- I built a SMALL house, too!

  • bry911
    7 years ago

    Mush - I love mini-splits, we had them in Europe and the Middle East, best thing since sliced bread.

  • Am E
    7 years ago

    I've skimmed through this thread, lots of good advice. I want to comment because we spent a lot of time on the OPs exact question before building our house. (In construction now).

    I don't think I saw this mentioned, but for a very reasonable fee, we were able to enlist the help of a home energy consultant. (He's mostly a passive house consultant, although we did not take our house to nearly that level). He was very helpful by being able to run a lot of calculations for us and make product recommendations that fit our preferred trade-offs for performance/cost/ROI. The calculations helped us understand the trade-offs between cost and return. Things like how much more insulation is worth paying for vs a larger HVAC system, window performance, etc. He helped us draw that line.


    We intended to take ROI further than most are willing to, out to 20 years, although almost everything we chose paid off a whole lot faster than that. (We are in central NC). Everyone is right about focusing on the envelope. SIPS construction was a no brainer. I would really like to advocate for that. I'm officially a SIPS evangelist. Mini split HVAC system in our area is the only way to go. Our two small ducted units are rated 21 seer, although, if you can make use of the newest ductless mini-splits, our single ductless unit is rated 33 seer. (<--- this is magic btw)

    Because we are building new, we were able to make the envelope very good. Therefore, geothermal was way too expensive, and did not pay itself back. I know some people who added a geothermal to an old farmhouse with a poor envelope (even with nice, new windows), and it was worth it in that case.

    I want to second this: "Envelope costs can reduce HVAC costs to really improve their return.
    Unfortunately HVAC subs don't like this and builders are afraid of this.
    So you rarely get the savings unless you push it." - we had to push against both the GC and the HVAC guys to get what we wanted. They really think we need double the HVAC capacity we are actually going to install. We are very confident they are wrong, and our HVAC design will work great. We found an HVAC contractor who is very good, and willing to do what we want, but we basically had to sign a waiver saying that if the HVAC didn't perform as designed, it wasn't his fault (as long as there are not mechanical or installation issues.)

    We ended up choosing Marvin Integrity windows, although there are higher performing windows out there.

    Our lessons reflect this thread: SIPS, very good but not top end (energy performance-wise) windows, and good doors. Smaller HVAC, not-so-big? house that is oriented properly on the site.

  • Am E
    7 years ago

    A few more choices we made: all LED lighting. Heat pump water heater (we do not have natural gas available, which is hard to beat). We are going to have solar panels, but we save some cost since we can design the system and do the install ourselves. We are not paying to get LEED certified.


  • Fred M
    7 years ago

    We are building fairly energy effiecent home. Superior wall basement, SIPs walls and low U value Windows. The biggest struggle we have had is getting contractors willing to listen to what the home needs based on the technologies used to build the home and not just what a similar house needs. You are paying a premium for those technologies and most likely a premium for contractors to install them and work around them.

  • mushcreek
    7 years ago

    If you build a very efficient envelope, be prepared to argue over the size HVAC system you need. Early on, I spoke to a 'professional' contractor who assured me that I needed at least 2-1/2 tons of cooling. He told me this confidently, without even seeing the house. He said the construction didn't matter that much! I bought a $50 program and ran my own Manual J calculations, and it turns out I only needed 9000 BTU's, or 3/4 of a ton. A 2-1/2 ton system would have been woefully inefficient, and not done a very good job of dehumidifying because of being so oversized.

  • rwiegand
    7 years ago

    The calculations become much different if you take a different time frame. I assume that our house will be good for another hundred years, many of the houses in our immediate neighborhood are 2-300 years old, some with only modest changes from the original, very good construction. (the poorly built/maintained ones turned into compost long ago). If you are willing to "pay it forward" just a little bit building a comfortable, efficient house becomes a completely reasonable proposition that will benefit its inhabitants for many decades to come. I do also believe that the market will eventually come to value the comfort and efficiency of a well-insulated and sealed home.

  • bry911
    7 years ago

    If you are willing to "pay it forward" just a little bit building a comfortable, efficient house becomes a completely reasonable proposition that will benefit its inhabitants for many decades to come. -

    While this is certainly something to look at when you are building a home, it isn't something to consider when calculating ROI. ROI is a specific idea about how to efficiently use your money, in this case it should probably be how to get the most energy savings for the least amount of money.

    I know this is getting all finance and people hate to be told that there is a right or wrong way to make financial decisions. However, when properly used, tools like Net Present Value lead to very smart and real differences. They are not always splashy or cool. An NPV calculation is going to favor good building practices over sexy new (expensive) equipment and knowledge. It can lead to a house that doesn't look any different than your neighbors', so there is no badge of energy savings that you can pin on your shirt when you leave the house, but costs significantly less to operate.

    P.S. never use payback period - it is a faulty number and worth nothing really (any payback beyond 10-12 years arguably never really pays back). Simply use the mortgage payment or an NPV calculator.

  • BT
    7 years ago
    last modified: 7 years ago

    HeatCad has trial period of 30 days and it is ACCA certified. More than enough to calculate single home. You could put different windows and wall insulation types to see how it will impact you cooling and heating load.


    Unless you have some sort of gov benefit I do not think LEED is worth it. It adds 15k in costs. If you want to do blower door test or envelop test $350 pales in comp to $15k. ACH 50 below 1 is easy if you are meticulous and careful. I would never use payback over 10 years as equipment will not last ten years. HVAC coils are failing left and right and new titanium are not fully proven. Some things make sense. Using ZIP+R 1 1/2 insulation sheathing adds $10/sheet with nearly $0 cost to install. $22,000 HVAC system "Infinity" and Beyond will have to be replaced long before you pay of your mortgage. [Probably 2 - 3 times]. Super duper waterheater with heat-pump still will leak after 6 - 10 years. R38 walls require window boxes

  • PRO
    Charles Ross Homes
    7 years ago

    Lots of good considerations offered by various posters.

    Simply payback time is, well, a simple metric. However, I believe it can be useful-- particularly when evaluating incremental investment in components or systems with short life expectancy. For example, if the incremental investment in a higher SEER air conditioner is say, $1,000, the simple (zero interest) payback time is 3-5 years, and the life expectancy of the system is 15 years or more, I would consider that attractive in the current (low interest) environment. The closer the simple payback time is to the life expectancy of the component or system, and the higher the interest rate environment the less attractive the incremental investment becomes.

    If you figure the incremental cost/month to your 30-year mortgage for components and systems with less than a 30-year life expectancy, keep in mind that you'll be paying for a longer time period than the life expectancy.


  • BT
    7 years ago
    last modified: 7 years ago

    Here <link> you can see before you invest into new system... Notice recent article talks about 5 years, or after 4 - 6 years system fails since the install. There have been a countless litigation and <presumably> corrupt, dirty federal judges have been fixing the cases. Trane [phony] blames "Formaldehyde". And the existence of Formaldehyde most home owners can not control or disprove. The reality Trane / carrier / etc made tubes thinner and 410 operates at higher pressure. Thus replace expensive coils replacement, or even entire system. Thinner tubing is not there to increase "efficiency", it is cost saving method. Copper is an excellent thermal conductor anyway.

    These issues with copper coils and tubing are wide spread. Even iF you are not aware of issues with "pin hole" leak you will notice decrease of efficiency. Spending money on gourmet hvac system is not worth it right now.

  • bry911
    7 years ago
    last modified: 7 years ago

    payback time is, well, a simple metric. However, I believe it can be useful-- particularly when evaluating incremental investment in components or systems with short life expectancy. -

    There is much less value in using payback period for systems with short life expectancy than there is using it for payback period for items with long life expectancy. For shorter life your cost will rise over the 30 years of the loan while your benefit requires an additional capital outlay.

    If you figure the incremental cost/month to your 30-year mortgage for components and systems with less than a 30-year life expectancy, keep in mind that you'll be paying for a longer time period than the life expectancy. -

    If you have a 30 year mortgage then you are paying for it for 30 years. The life expectancy of anything in your house doesn't change the terms of the loan. Since money is fungible a loan on your house is for every component, thus you are paying for the 30 years whether you want to consider it or not.

  • rwiegand
    7 years ago

    I'm always surprised at folks who seem not to give a second thought to the cost and value of relatively ephemeral parts of their houses or components that will never add net value (kitchen cabinets, draperies, swimming pools, jaccuzzi tubs in marble bathrooms, etc) but get all weirded out about ROI, NPV, payback etc when it comes to adding insulation and other relatively permanent improvements to construction quality. (I'm not pointing any fingers here, thinking more of some of my neighbors and acquaintances.) Why do they demand that insulation pay for itself in 6 and not 20 years, but the bathroom remodel or extra three decorative gables never does?

  • just_janni
    7 years ago

    It's not sexy. It's not "external". It does not keep up with the Joneses.

    I HAVE heard that building crazy super efficient homes (to the point of absurd) is the new rage in Silicon Valley / San Francisco - instead of the HUGE home - they are now (slightly) more modest and loaded with energy saving (expensive) tech. Maybe in the Valley - that IS keeping up with he Jon(b)eses?

    Anyhow - I am not one to talk - I am spending an obscene amount of money on an almost passive house / LEED platinum house. I KNOW I have gone overboard. I also know that there is a peace of mind knowing that my operating costs will be very low and if I add solar I can be net zero / energy producer - it's part of my stress free retirement plan. Trying to remove costs that can be so variable.... can't do much about health care (other than to exercise and stay fit!), but can manage my home for ease of maintenance, and low operating costs. Should we have an energy type crisis in the future - that is one expense that wouldn't keep us from staying in the house.

    SO - I know the ROI isn't there. Most of this is a project / engineering challenge for hubby, and a sense of accomplishment. It's more like a hobby. Good thing - since we no longer have any money for hobbies... And it also makes us feel like we have done a decent job being a good steward of the planet.

  • bry911
    7 years ago
    last modified: 7 years ago

    I'm always surprised at folks who seem not to give a second thought to the cost and value of relatively ephemeral parts of their houses [...] but get all weirded out about ROI, NPV, payback etc when it comes to adding insulation and other relatively permanent improvements to construction quality. -

    I simply disagree with much of your assertion, so feel free to point your finger at me. Energy efficiency has a specific goal - to lower energy costs, so it just makes sense to evaluate it using some metric that considers expenditures vs. cost savings. Essentially, you are evaluating those things the same way you evaluate everything else - how good it is at doing its job.

    Specifically to your point, the best insulation never pays for itself in my area, when you consider the added cost vs. savings. I could take the price difference and stick it in a very safe investment (government bond) and I could easily pay the additional utility expense for the rest of my life. That same thing gets even more absurd when considering ground source heat pumps.

    We evaluate kitchen cabinets, draperies, swimming pools, jaccuzzi tubs in marble bathrooms, etc., on the exact same metric, how good they are at doing their job. We just assign them different jobs. For example, swimming pools and jaccuzzis may be evaluated on how good they are at making us feel better or how much fun we have vs. the cost.

    As people we always want to maximize utility (here this means getting the most of our desired outcome for the least of our income) something designed to save money should be evaluated on how it saves you money. While something that saves you money AND makes you more comfortable should be evaluated on how much it costs vs. how much you save AND how much better it makes you feel.

  • User
    7 years ago

    Foam insulation has benefits beyond just it's R value. The sound attenuation that it adds does make for a quieter home than batt. That is just one example of ''efficiency'' having more benefits to be weighed beyond just the spreadsheet. Solar hot water preventing costs little, but can mean that you can actually use that 150 gallon behemoth tub without adding a second water heater to the home. The peace of mind that rising utility costs won't impact your retirement income negatively is a big mental benefit, as well as dollars saved. Etc. It's a big picture cost benefit that includes more variables than just dollars. It's too complex to reduce it to just that.

  • PRO
    Springtime Builders
    7 years ago
    last modified: 7 years ago

    To add to Sophie's point, foam insulative sheathing or other board stock types used to wrap exterior framing keeps structural components and hidden cavities safer from condensation and mold. It's been introduced as code minimum in colder building climate zones and a good practice for most zones with reductions in thermal bridging and air leakage.

    Proving airtightness with a blower door test is the most cost-effective energy efficiency measure and it's a starting point for healthier indoor air quality measurements, which makes for an even more fun payback calculation.

  • bry911
    7 years ago
    last modified: 7 years ago

    Whoever said it only included dollars? In this case, one side of the transaction will only be dollars (the cost). My advice is to simply put that into real dollars, not some arbitrary and meaningless number called payback period. In the end, "is the added comfort or safety worth paying $18 per month for?" is a question we can answer while, "it will pay back in 9 years," is utterly useless for making that type of decision.

    To steal an expression from another member we are in heated agreement!

    That is just one example of ''efficiency'' having more benefits to be weighed beyond just the spreadsheet.

    Again, this is the exact reason that you shouldn't use payback period. I completely agree that there are non-financial reasons to do many of these things, in fact, I have said it several times on this very thread.

  • schreibdave
    7 years ago

    Off topic a little but we just sold our tight, well insulated and efficient home and buyers were not interested in those features. I loved it for the 8 years we lived there but i doubt we saved enough in energy during that time and i know that buyers were not interested. Next house will not include any upgraded energy efficient features as we know we will be selling again in 15 years when we reture. Good luck.

  • just_janni
    7 years ago

    Unless our energy costs start to look like they do in Europe, energy efficient upgrades will only appeal to a limited geeky audience. I agree with schreibdave above. I also say that you need to decide what you are doing for yourself that makes you happy vs what works for resale. Always a balance.

  • Am E
    7 years ago

    I think you are exactly right jannicone, although I whenever I consider that point, I sort of shake my head. I get that most people don't value energy efficiency like I do, and that's fine, but sometimes experience's like schreibdave's seem a bit irrational to me.

    Our new, roughly 2600 sq ft home will cost the same or less per month in total utility costs to live in than our current 900 sq ft home. It will also be a lot more comfortable (temperature, air quality, etc. etc.). Yes, it costs a little more up front, but the much maligned-in-this-thread payback period for the difference in cost will be well within the period of time we plan to live in the house. Most of the energy efficiency aspects we chose were not THAT expensive.

    I guess I just don't understand why most prefer the trade-offs required for lower initial cost, which usually means houses built as cheaply as possible (except for the granite countertops). It seems like finding the lowest possible initial cost is all people consider, regardless of the balance of cost of ownership. With the right choices, it costs much less money overall to have a somewhat higher initial cost and pay for that in the monthly mortgage payment, than have a somewhat lower mortgage payment and pay much higher energy costs every month forever (in a less comfortable house).

    We knew before we started building that almost no one would be willing the pay the same premium we are willing to for the energy efficiency aspects of our home if we needed to sell it.

    In my rural area, people regularly accept $300+/month energy bills, even on houses where the cost of sealing some ducts and adding a little insulation would pay itself back in less than a year, and the house would be more comfortable. People around here have $ for everything else in the world besides replacement windows for their leaking, single pane windows, which would start saving them money every month very quickly. I don't get it.

    (Apologies if I sound smug, I just don't understand "saving" money on less insulation and poor windows so you can buy a much larger HVAC system and nicer countertops.....does not compute).

  • just_janni
    7 years ago

    am_e - I am with ya! Hubby is an engineer - so he's very interested in building PERFORMANCE. I am interested in managing operating expenses as we age, as well as indoor air quality and comfort. I am totally expecting we will be able to heat our house with dog farts. (we'll need more indoor air quality work here, though, obviously) :D freeing up operating expenses and paying very little for about 8K sq feet under roof will allow us to do other things that will drive live improvements - so I count that as a return.

  • schreibdave
    7 years ago

    My last house was insulated with spray foam, had expensive windows and an HRV. According to my realtor none of those things helped me on resale. People were much more interested in the granite, cabinetry and landscaping.

  • bry911
    7 years ago
    last modified: 7 years ago

    I guess I just don't understand why most prefer the trade-offs required for lower initial cost,

    Let me help you there, (I hope this doesn't come off as condescending because it is not intended that way). Perfectly rational and informed people may choose to avoid energy efficiency and/or comfort. Money today is simply more valuable than money tomorrow, this is called the time value of money. I personally use an 8% discount rate because after fees I can typically earn that on investing, so any time I could invest the money and end up with more than I get from spending the money I strongly consider doing that.

    For example, I priced a kitchen at a high end custom shop, when I pointed out that the cabinets were more than double the estimate I got for a similar design somewhere else, the designer started talking about how long the cabinets would last compared to the furniture board junk the other quote used. I pulled my trusty ti-84 and realized that if I invested the price difference in a fairly safe mutual fund I could pay for new junk kitchen cabinets every 10 years (adjusting for inflation) with the savings.

    A really quick and easy shortcut for making these types of decisions is the rule of 72, at 8% I get a doubling time of around 9 years. This means every dollar I don't spend will become two dollars in about 9 years. So any project that doesn't pay for itself in 9 years isn't worth doing financially.

    This doesn't mean I always go with the numbers, in fact, I often make decisions that I like regardless, and since unspent money is really just paper (or 0's and 1's in a computer), that is OK. I don't want people to always make the proper money decision I just want them to fully understand the decision. Often when we fully understand the financial consequences we make smarter energy decisions rather than trendy ones. Sometimes the best things for the environment and for energy efficiency are not very sexy.

  • PRO
    Charles Ross Homes
    7 years ago

    Different home buyers will have different perspectives about what is important to them in a home, and yes, many folks are more concerned about "bling" than the "bones" of the home.

    Realtors need to do a better job of marketing the benefits of energy-efficient homes. They can start by educating themselves first and then educating prospective buyers.

  • mushcreek
    7 years ago

    Looking back, I realize that I never considered the energy efficiency of any previous homes we bought. After the Big Three (location, location, location) I was interested in the property, overall condition of the house, and price.


    In designing and building our new home, I had the opportunity to 'get it right'. Our new house is not only very energy efficient, but it is also very comfortable and quiet. I never considered ROI or resale; I built the house I did for US.