Fast Payback on Insulation – The Naked Truth

As I peruse the popular media I often see statements similar to this, "with an investment of a few hundred dollars in insulation and/or air sealing a person can save 30 to 40% or more on their heating bills."  The statement is not patently false but it is misleading.   Here’s the scoop:

  1. People can save that much with an investment of just a few hundred dollars, but it is rare. These are cases when you have an old house and you go from ZERO insulation to SOME insulation in your walls or attic.  The energy savings for upgrading from an R-value of 1 to an R-value of 2 is many times greater than going from an R-value of 10 to an R-value of 20.  That may be counterintuitive but that is how conductive heat loss works, it is not linear.
  2. There are still big opportunities to save in most homes but generally they will cost more than a few hundred dollars to upgrade and you have to know where they are.  The point is, just spending the money won't give you a fast payback if you spend it on the wrong thing. If you replaced your windows and location that was really losing the most heat was your basement then you won't get the gain you hoped from the investment.  You have to pick your battles correctly.
  3. Sadly, there are some homes that are built in such a way that they don’t lend themselves to insulation upgrades that offer a fast payback.  Yes, you may find somewhere that needs more insulation or air sealing but it’s just plain hard to get to now that the house is done.  Poorly insulated cathedral ceilings come to mind  or the 70’s era “modern style” house with huge plate glass windows and flat ceilings and large overhangs.  In those cases you just have to settle into the long term investment  in insulation and consider the comfort and environmental benefits you will be also be getting. 
  4. Every home is different and it takes effort to find the right insulation upgrade to get a quick payback but there are things that offer a fast payback in almost every home. Here’s a short list 1-3 year paybacks: 
    1. Weather-stripping a window.  That costs $3.00 in adhesive backed weather strip from the hardware store and returns $3.00 in trapped warm air the first year. One-year payback.
    2. Setting back your thermostat and while the house is unoccupied and at night has a payback from the instant you start doing it. Expect between 5% and 10% in energy savings from this move.
    3. Removing your baseboard and caulking the joint between the floor and the wallboard costs $30-40 in caulk plus your labor but can return $50-100 per heating season.
    4. Make sure your windows are closed completely and the latches are locked all winter long.  I don’t know how many apartments and homes I have been in, in the dead of winter, where this is not true. 
    5. Add rigid board to the top of your attic hatch, weather-strip your hatch and install latches that cinch it down tight.  Investment: $30-40, payback term: about 1 heating season.
    6. Conduct an insulation audit on your home, either DIY or hire a professional.  Payback can be as little as 1 heating season.
        

Payback and return on investment in insulation.  Insulation is always a good long-term investment.  It’s zero risk and zero maintenance. Insulation will continue to spit out consistent energy savings year after year. Look at your other places you could spend your money and see how they compare: Solar panels require maintenance, windmills too. Will wood pellet prices always be stable?  Will used fry oil always be free? Who knows?  These can all be good investments but in the long term they don’t hold a candle to insulation.  So, if you have the long view, make your choice with confidence and move forward. 

High-yield, short-term investments in insulation are also available but they take more effort to find.  You have to become a student of your house and figure out where the greatest heat loss areas are and how to fix them with the least money.  At a recent project in New Hampshire, the homeowner was able to cut his fuel consumption from 3200 gallons of heating oil to 1400 gallons just by  spray foaming the top of his foundation walls and insulating the ductwork in his basement. Cost: $3500, payback: about $7800 at present heating oil prices. That same $3500 investment would not have yielded the same return if he had spent it in his attic. 

So what do we learn from this case study?  Insulate basements and not attics? NO.  We learn that money spent in the right place yields the best return, not all that different from the advice an investment broker might give.  The big opportunities do exist, click here to learn how to find them.  

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