You’ve heard the spiel: spending money to make your house more energy efficient can help you save big bucks.  But is it true?  How much can you really save by adding a programmable thermostat or weatherstripping windows?  Or are these just tricks by manufacturers to make you purchase their products? A little bit of math can help you find out.

Carly has been living in her first home for two years.  She’s paid attention to her energy bills and notices that she spends \$250 each month to heat her house in the winter.  Where she lives, that’s about 5 months of the year.

That means she’s spending \$250 x 5 or \$1,250 each year on heating costs.

She’s got three projects on her mind: installing a programmable thermostat, weatherstripping windows and lowering the thermostat on her water heater.  If she does this work, how much money can she expect to save?  Let’s take a look.

1.  Installing a programmable thermostat: The U.S. Department of Energy estimates that you can expect to save 10% on heating costs each year by turning the thermostat back by 10 to 15 degrees for 8 hours each day.  And the easiest way to do this is by installing a programmable thermostat.

Pretty quickly, Carly figures out that she can save \$125 each year.  Here’s how:

10% of \$1,250

0.10 x 1,250 = \$125

The programmable thermostat that Carly has been eyeing costs \$47, and she’s decided to install it herself (the instructions don’t seem too tough at all). So, this year she can expect to save:

\$125 – \$47 = \$78.

2.  Weatherstripping windows: It’s a real pain, but Carly is wondering if weatherstripping and caulking her windows can help keep some cash in her pocket.  Again, she consults the U.S. Department of Energy, which estimates that drafty windows can cause energy efficiency to dip by 5% to 30%.  Playing it cautious, Carly estimates a 5% savings:

5% of 1,250

0.05 x 1,250 = \$62.50

She figures she’ll need 3 tubes of caulk at \$2.50 each, plus weatherstripping materials at \$55.00:

(3 x \$2.50) + \$55

\$7.50+ \$55 = \$62.50

Huh.  She’s not saving anything by weatherstripping.

\$62.50 – \$62.50 = \$0

But if she does the work this year, she can probably avoid it next year — keeping that entire \$62.50 in the bank.

3. Turning down the water heater:  According to Carly, there’s nothing better than a hot shower.  But she’s willing to sacrifice that luxury, in order to save some money.  Right now, her water heater is set at 130 degrees.  But if she lowers it to 120 degrees, she can save about 4% in energy costs.

4% of 1,250

0.04 x 1,250 = \$50

And lowering the thermostat on her water heater doesn’t cost a thing.

So with these three changes, what can Carly expect to save this year?

\$78 + \$0 + \$50 = \$128

That’s not a lot of cash.  But what about the following year?  Assuming she won’t have to reapply any weatherstripping, Carly’s looking at:

\$125 + \$62.50 + \$50 = \$237.50

Sounds worth it to me!

What do you think? Is all of this work worth the savings that Carly expects?  What other considerations (or variables) should she consider?  Would you approach this question differently?