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
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.
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