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Spending a dime to save a dollar

mikeolder | Posted in General Questions on

Under that scenario, it would be a “no brainer” spending a little time and money insulating over and above minimum code levels.   But I’m only guessing the statement is untrue regarding super insulating.  That some folks might spend more money on efficiency than is actually saved on utility bills “during ownership”..  If those folks have plenty of money and feel warm and fuzzy because they are “green” great! Because wealthy folks make the world go round after all..  But for the majority of folks who live paycheck to paycheck, they need proof that the dollar they spend, does actually equal a dollar or more saved.

I’d love to see a study by Lstiburek that suggests..
“If you upgrade your new 1200 sq’ home insulation package by $3k with 4″ of exterior insulation, it would reduce a regular house $200 per month utility bill, to $75 a month, which would take 24 years to recoup or break even. ”  Does a study like that exist?

Anyway, I’m not seeing any case studies regarding “break even” costs regarding super insulation, and that’s what most people with average incomes like myself want to know.  Honest GBA studies for example, that arent trying to market something.



  1. user-36575 | | #1

    The BeOpt program can create optimization curves based on your modeling. Now you can model any case study you want.
    They probably have links to various studies there, or you can search online for BeOpt payback studies.

  2. user-36575 | | #2

    ...At the BeOpt website, look under Support/Publications...

    And, note that it's free, so it won't even cost you a dime. :)

  3. Expert Member
    Dana Dorsett | | #3

    >"Under that scenario, it would be a “no brainer” spending a little time and money insulating over and above minimum code levels."

    That's not necessarily true for insulation, but can be true for air sealing. IRC 2018 is a much better insulated house than 1988, but by 2048 you'll already be in a warmer climate zone thanks to climate change.

    Then there is the the projected cost of energy. At the current lifecycle cost of even rooftop PV solar and current technology heat pumps the heat pump is already cost-competive with natural gas in most markets. Solar is getting cheaper year-on-year, and even without any major efficiency breakthroughs such as perovskite-silicon hybrids (they sorta work in the lab, but are nowhere near commercialization) the incremental learning curve is still pretty dramatic, so the replacement will be cheaper. Similarly heat pumps are getting incrementally more efficient over time without increasing cost.

    The net annual cost of your heating energy should go down with time, due to fewer heating degree-days and higher efficiency heat pumps at replacement time, and lower cost solar at replacement time. Cooling energy use may go up, but cooling energy cost may still be trending down (in inflation-adjusted dollar terms.)

    If you look at insulation beyond code as a 100 year investment, a heat pump as a 20 year investment and PV as a 30 year investment the error bars may be large, but the trends are all pointing toward cheaper energy cost and lower energy use even at code-minimum. Where the crossovers occur will vary, but it is by no means a no-brainer even in the longer term, and absolutely not a no-brainer in time horizons shorter than 20 years.

    The analysis of where the financial rationality limits are in this now decade-old study didn't factor in climate change or efficiency, but it's still a pretty good reference:

    See Table 2, p10, and read the whole first

    Note: Heat pumps have gained something like 20% in efficiency since that paper was published, and the cost of rooftop solar has dropped by about 60-65%%, and the cost of utility scale solar has dropped by over 70% (but still more expensive than utility scale wind, if only by a little.) Bumping up a full climate zone warmer would probably be more realistic with today's equipment efficiencies.

    And within the lifecycle of a heat pump even the annual heating/cooling degree days will change:

    Building a house to the IRC 2018 code min for zone 4 for a house in US climate zone 2 can usually hit Net Zero Energy cost effectively with an array that fits on the roof without much difficulty even today.

    1. mikeolder | | #4

      Thanks guys.

       I'm in zone 5, so the 2018 IECC for zone 7 states concrete-R15 walls-R25 ceiling- R49.    That's quite a ways from a "pretty good house" 10-20-40-60
      The article "The Diminishing Returns of Adding Insulation" says it all, and the best parts are in the comments.. Martins leaky house he wont fix "Call me an ass if you want," etc..  It's a good read..
       Like when Alan says. "Residential energy efficiency is rarely 'cost effective'.  Only half the project will pay for itself within the predicted lifespan of the improvements."   
      And then later says.. "If energy retrofits aren't cost effective and energy results are consistently disappointing, wouldn't it be good to admit that as an industry for honesty's sake? Once those admissions are behind us, we can move on to real problems, which usually aren't saving clients $300-1000/year in utilities, which is typical.
      I enjoyed the article and what I'm gathering, is that if I build my small house to  15-25-49 zone 7 guide lines, I will be doing just fine IF, I can achieve great ACH50 number's.

      But I'm not sold on PV quite yet especially with the proposed HF669 and SF583 looming and my 13 cent per kwh price.  Ditching the propane furnace for a mini split sounds sort of legit except for serviceability aspect. I pay $1.10 a gallon.
      Is there a rule of thumb like Martins "Off-grid homeowners paying on the order of $0.50 to $1.00 per kWh." 
      But for DIY grid tie systems?  Could the price ever compete with 13 cents?

      1. Expert Member
        Dana Dorsett | | #5

        The IRC doesn't specify slab insulation, but in zone 5 a continuous layer of 1.5-2" of EPS "worth it" from a moisture control point of view, even if the "payback" is nearly-never if based purely on net-present value of future energy savings basis.

        The 20 year lifecycle cost of PV can easily compete with 13 cents if net-metered and taking full advantage of federal tax credits or other incentives, even when professionally installed at ~$3/watt ($3000/kw) all-in, before incentives. Play around with this LCOE calculator for a bit:

        You'll have to figure out what your capacity factor would be based on your location/insolation averages, and use a reasonable discount rate (the cost of financing interest + 1% to 2% wouldn't be insane for most conservative investments.)

        For no-grid-export or unremunerated grid export grid tied systems it gets more complicated to calculate. In Australia it has been popular to install simple controllers to dump excess production into a water heater rather than export to the grid at a paltry return. That's a heluva lot cheaper than batteries and the range of use of that excess power is limited to thermal applications, but it's still not terrible.

        Buck-ten propane in a condensing water heater delivers at-best ~$13/MMBTU and could be 1.5x that. At 13 cents a plain old electric tank is on the order of $40/MMBTU. A DIY grid-tied system might come in at half that on a levelized cost basis, but if the choice is a "use it or lose it" curtailment or donation of that power to the utility the cost of any excess is effectively $0/MMBTU.

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