What does the acronym SIR mean?

SIR refers to “Savings to Investment Ratio.” It is basically a calculation of whether a modification to a home will pay for itself in energy savings.  SIR is a most often used by the U.S. Department of Energy Weatherization Assistance program to determine the cost effectiveness and energy savings of applying weatherization measures (e.g. adding additional insulation to the attic).

It is the ratio of the savings generated by the weatherization project to the cost of the project. SIR is calculated by dividing the sum of a project’s discounted savings by its investment costs. For a project to be cost effective, weatherization programs generally require the SIR to be greater than 1.

More information can be found on the Payback and Savings on Your Energy-related Home Improvements page.