How Much Efficiency Can I Afford?

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When buying a heating or air conditioning system, homeowners need to consider many factors before making their purchase. One of these factors is the ‘total efficiency’ of the new system. Energy costs are surely going to rise. The D.W.P. and The Gas Co. already have approval for future rate increases.

How much will I be saving with high efficiency equipment? What will my Return On Investment (ROI) be? In short, what are the benefits in real dollars?

The SEER rating of an air conditioning system will provide you with an indication of the savings. In essence; The higher the SEER rating; the more energy you will save, and the lower your utility bills will be. However, this only applies if the new equipment is installed using matched components and it is also installed properly. (For more information on Proper Installation Techniques, attend our next Homeowner’s Workshop)

New air conditioners and heat pumps must achieve a rating of at least 13 SEER. Some models are rated at a SEER rating of 20 or more, although this doesn’t always insure that they will achieve this rating. New furnaces must be a minimum of 80% AFUE, although there are some models which are as much as 98% AFUE.

There is a formula which will determine the length of time you will reach a break-even point. In other words, if you spend $2,500.00 more for a higher efficiency system, when will you realize the savings, from rebates, incentives, and lower utility bills?

For example, if you save $30.00 per month using a higher efficiency air conditioner, for the typical 4 months of summer, you will save about $120.00 more, per year. If you save $25.00 per month on your gas bill, with a higher efficiency furnace, for the typical 4 months of winter use, you’ll save about $100.00 per year. This would equate to a total yearly savings of approximately $220.00 ($100.00 + $120.00).

A typical high efficiency system may cost you an additional $2,500.00 more than a standard system. Rebates and incentives usually add up to $2,000.00 or more. You can see that this would be a break-even scenario after only the second year of use. This would prove to be a great return on your investment. Higher efficiency equipment also provides other benefits such as the reduction of so-called “Greenhouse Gases”, as well as the reduction in the use of fossil fuels.

In closing, spending a little more for higher efficiency equipment that will provide you with energy savings for the life of the system can be a good idea as long as the benefits make sense.