Energy Efficiency Calculator: Savings and ROI

Monthly savings = your energy bill × the share the upgrade cuts. Then add those savings over the years you'll count, raising them each year with energy prices. In the example: $500 × 30% is $150 a month. With prices rising 3% a year, that's $20,635 over 10 years.

ROI = (total energy savings − project cost after rebates) ÷ project cost × 100. In the example: $20,635 − $8,000 is $12,635, divided by $8,000 is 158%. Simple payback is cost ÷ yearly savings: $8,000 ÷ $1,800 is about 4.4 years, a little longer than the month-51 payback because the calculator counts rising prices.

It ranges widely. LED lighting often pays back in 1 to 3 years. Smart thermostats and air sealing often in 1 to 3. Insulation 3 to 7, heat pumps 5 to 10, and windows often 15 or more. Rebates can cut these by a third. The example pays back in month 51, a little over 4 years.

Usually the cheapest ones: LED lighting, air sealing, attic insulation, smart thermostats and lighting controls. They cost little and cut bills quickly. Bigger projects such as heat pumps, solar and windows save more dollars but take longer to pay back. Run each one here with its own quote.

Find the share of your bill that lighting uses, often 10% to 40% for a business. LEDs use about 50% to 75% less than older lights. If lighting is 30% of a $500 bill and LEDs cut it by 60%, the upgrade cuts your total bill by 18%. Enter 18% as the cut and the cost of fixtures and labor as the price.

Yes, they lower your real cost. Enter them as a share of the project cost under More options. A 30% rebate on the example's $8,000 project lifts ROI from 158% to 268%. Check your utility, state programs and federal credits, which change often. This isn't tax advice.

US electricity prices have risen about 2% to 3% a year on average over the long run, with sharp jumps in some years and regions. We use 3% by default. Higher price growth makes every upgrade pay back faster. Set your own rate under More options.

Use the life of the upgrade. LEDs often last 10 to 20 years, insulation for the life of the building, and heat pumps 15 or so. Counting 20 years instead of 10, the example saves $48,367 and returns 505%. Don't count past the point you'd replace or sell.

Compare the yearly return with what your money would earn elsewhere. The example returns about 24% a year, which beats most investments with no market risk. Upgrades that pay back within half their useful life are almost always worth doing.

Often, through lower running costs that buyers notice, and some studies find efficient homes sell for a little more. This calculator counts only bill savings, so any added value at sale is extra. For solar panels, use our solar calculator.