Folks want to know how much they will save by adding insulation to the attic
of their home. The formula below will help you to estimate the cost
effectiveness of adding insulation in terms of the "years to payback"
for savings of heating costs. You can also estimate the savings per year.

Years to payback is the time required for the additional insulation to save
enough fuel from heating (at present prices) to pay for itself.

The cost of the energy source is a key factor in determining payback.
Energy prices vary widely from region to region, and from season to season.

Other factors, such as the rate of production and inventories of fuels
nationwide, can also affect local energy prices. Also, the weather varies, so your energy costs from year to year
will vary as well.

To figure the cost of energy, consult your local utility for a rate
schedule, or read your energy bills and plug your specific costs into the
formula.

**Get your paper and pencile ready.**

Years to Payback =

C(i) x R(1) x R(2) x E

C(e) x [R(2) - R(1)] x HDD x 24

To calculate the payback, you need to supply the following information:

C(i) = Cost of insulation in $/ft². This cost per square foot
should include the total cost of all materials, labor and equipment divided by
the size of your attic. You need the square footage to buy the materials anyway.

C(e) = Cost of energy, expressed in $/Btu.

To figure the price you pay per unit, take the total amount of your bills
(for oil, electricity, propane, or natural gas) during the heating season, and
divide it by the total number of gallons, kWh, or therms you consumed during
those months.

The following table provides estimated $/Btu prices:

E = Efficiency of the heating system. For gas, propane, and
fuel oil systems, this is the Annual Fuel Utilization Efficiency or AFUE.
Typical AFUE values are 0.6 to 0.88 for oil or propane furnaces, and 0.7 to
0.92 for natural gas furnaces.

Older systems are usually less efficient.

Use E = 1.00 for electric resistance heating.

For heat pumps, use the Coefficient of Performance, or COP, for E;
where E = 1.6 to 2.4 for air-to-air heat pumps, and E = 2.8 to
3.5 for geothermal heat pumps.

R(1) = Initial R-value of section

R(2) = Final R-value of section

R(2) - R(1) = R-value of additional insulation being considered

HDD = Heating degree days/year. HDD information can usually be
obtained from your local weather station, utility, or oil dealer. I get HHD
data from Weather Underground.com at http://www.wunderground.com

24 = Multiplier used to convert heating degree days to heating
hours (24 hours/day).

**Here is an example to help you understand it**

Suppose that you want to know how many years it will take to recover the
cost of installing additional insulation in your attic. You are planning to
increase the thickness of insulation from R-19 (6 inch fiberglass batts with
moisture barrier on the warm side) to R-30 by adding R-11 (3.5 inch unfaced
fiberglass batts). You have a gas furnace with an AFUE of 0.88. Assume a
$1.10/therm price for natural gas and a cost of insulation of $0.18/ft².

C(i) = $0.18/ft²

C(e) = ($1.10/therm)/(100,000 Btu/therm) = $0.000011/Btu

E = 0.88

R(1) = 19

R(2) = 30

R(2) - R(1) = 11

HDD = 7,000

By plugging the numbers into the formula, you obtain the
years to payback.

**Years to Payback =**

0.18 x 19 x 30 x 0.88

$0.000011 x 11 x 7,000 x 24

90.288 = 4.44 years

20.328

If the cost of natural gas increases to $1.30/therm, then
the payback period is reduced to just under 4 years. Also, some additional
savings will accrue due to reduced energy use during the air conditioning
season.

**Savings per year estimate**

Divide the total cost of the project by the years to payback that you
calculated above. The result is the estimated savings per year. The savings
increase when the price of enegry raises.

Remember these are just estimates and can be a little off. Actually they
are “eneginering estimates” not scientific calculations, but they do give you a
good idea of the savings you will get.

If you enjoyed this post, then click here to subscribe to the Energy Boomer Newsletter.

**Related Posts:**

How Much More Attic Insulation do I Need?

INSULATING A HOME WITH BOOKS, MAGAZINES AND FABRIC

.