Inflation, fluctuating prices, and supply chain issues have hit household budgets hard over the past few years, including the rising cost of home electricity. Families are looking for ways to save money on utilities, while also making their homes more energy efficient.
Using less electricity is one step, but many are taking a step further with energy-efficient investments for lighting, heating and cooling, appliances, and more. It’s true that some upgrades are more costly. You may ask: How soon will I recoup my investment or start seeing savings on my power bill? Will these investments help my home’s overall value?
From tax credits and rebates to lower utility bills, it’s easy to quantify the positive impact on your wallet, as well as the environment and economy at large. Whether you’re updating or building a new home or commercial property, explore the potential returns of your energy-saving investments and the easiest ones to implement today.
Low-Cost Energy Investments
Some minor upgrades go a long way and are fairly easy to integrate, such as:
- Lighting upgrades may be the simplest way to begin your energy-efficient efforts at home. LED light bulbs are coming down in price than previous versions, use up to 90% less energy and last 25 times longer than incandescent bulbs, and are more environmentally friendly. The average utility bill saves $225 a year with LEDs, so the cost is often recouped within a year.
- A programmable thermostat is standard in most homes today. You can set temperatures for certain hours, such as higher “away” temps to keep from cooling the house while you’re gone. Smart, Wi-Fi enabled and programmable thermostats can be accessed from an app on your phone. This $100 to $400 investment (of the thermostat plus installation) easily returns $180 in savings each year, so costs are often paid back within one to two years.
- Better sealing and insulation keeps leaky air from sending paid-for heat or A/C right out the window. Weather-stripping doors and windows, better insulation in the attic and around pipes and outlets saves money every month. Whether you DIY or hire a professional, this is a relatively cheap way to save money on your home’s biggest electricity expense (heating and cooling).
Whether the ROI on these investments is one year or several, they positively impact your home’s value and environmental footprint.
Larger Energy-Efficient ROI
Reaping the economic rewards of everyday-use items may require more substantial upfront costs. Consider these ways to “go green” while also reaping the savings:
- Appliances have changed significantly through the decades as technology improves alongside environmental awareness. Upgrading to ENERGY STAR appliances like washers, dryers, dishwashers, refrigerators, and more help you start saving from day one.
- Water heaters are the second-largest utility expense for homes. Investing in a solar or electric heat pump water heater can save 50% to 70% a year. They also add to a home’s overall value and are eligible for tax benefits.
- Energy-efficient windows provide a high return on investment in terms of comfortability and cost savings. New windows, for example, may cost $10,000 but will recoup $8,500 on house value (not to mention monthly savings in heating/cooling costs); 85% is the calculated return on investment (ROI).
- HVAC system replacement offers another big bang for its buck. If your system is struggling or more than 10 years old, consider energy-efficient replacement models. While an update can be costly ($5,000 to $12,000), new HVACs can have an ROI of 35% to 50% and daily benefits of keeping your home comfortable while using less energy.
Check out this Energy Saver Guide from the Department of Energy for more savings ideas. The ENERGY STAR rebate finder helps connect you to additional financial incentives from your state or local government.
U.S. policymakers are making eco-friendly energy a priority by 1) providing incentives and rebates for consumers, 2) setting targets for net-zero emissions of carbon dioxide by 2050, and 3) incentivizing innovation for companies to create energy-efficient products and solutions. Through the Inflation Reduction Act (IRA) passed in late 2022, consumers can save hundreds to thousands of dollars on everything from electric vehicles, electrification upgrades and energy-efficient windows and appliances. Read more here.
Beyond the impact to your pocketbook, lowering energy costs for homes and businesses can benefit the overall economy. As businesses have cheaper operating costs (like utilities), industry and manufacturing can pass on those cost savings to consumers. Additionally, the IRA is expected to spur on 9 million new jobs over the next decade related to clean-energy innovation and production.
Consider what energy-efficient measures you can take today and reap the benefits for years to come.