Payback and Savings on Your Energy-Related Home Improvements

 Reviewed and Revised on 10/17/2013

Photo of an inefficient furnace

When looking to do energy related improvements on a home, it is often a good idea to determine a savings to investment ratio (SIR) for each measure before investing in the improvement. The ratio takes into account how much an improvement costs, how much it saves once installed, and how long it will last.

Savings to Investment Ratio formula

The ratio will give a homeowner an estimate of the number of times an improvement will …