How to Save Money With Energy-Efficient Home Upgrades

Energy-efficient updates can help homeowners keep some cash.

By + More

Bigger projects. But some jobs are too complicated for the average homeowner, such as new windows, better insulation, or sources of alternative energy, for example. And for those, you'll need to call in the pros: home builders and contractors who specialize in energy efficiency. To find one, Jennifer Owens, manager of residential education programs at the U.S. Green Building Council, recommends that you search through any of several websites that compile and certify builders with sustainability experience, such as the USGBC's Green Home Guide or Energy Star from the Department of Energy.

When choosing a "green" builder, it is important to set goals for energy use reduction upfront. Owens recommends selecting someone who has a holistic approach to the project and looks beyond energy to other factors, such as air quality, ventilation, and pressure. In many cases, "home­owners make powerful improvements, but they haven't taken into account indoor air quality," says Owens. "Make sure you're assessing the current state of the home."

After finding a contractor, it's time to get to work. ­Chances are, insulation will be the first update recommended. If you're building an addition and thus tearing down walls anyway, your contractor may recommend installing rigid foam-board insulation, but if you'd like to add insulation in the least invasive way possible, a contractor will opt to drill evenly spaced holes in your wall for a spray-foam nozzle to fill the spaces behind your drywall. Experts say adding insulation is the best energy upgrade homeowners can make because of an immediate improvement in the temperature of the home, and it's also a project that pays for itself quickly. According to the Joint Center for Housing Studies at Harvard University, the average amount that consumers paid for insulation in 2007 was $1,457, which, relative to other factors in your home, can be recouped within a few years.

After insulation, it may be time to consider upgrading windows, depending on their age. Farr recommends Energy Star windows with a low-emittance coating and double panes filled with argon gas. Windows are pricier, though, costing homeowners an average of $2,790, and it generally takes longer to see a return on investment varying with the age of the old set.

Next, look at the heating and cooling mechanisms of your home. Sealed combustion furnaces are the most efficient and use more than 90 percent of the air they heat in the home without wasting it, according to the Department of Energy. For air conditioners, look for a unit with a seasonal ­energy efficiency ratio of 16 to 21, which is the highest level of efficiency. Another option is a geothermal heating and cooling system, which utilizes pipes running from the more stable, ambient temperatures found 5 feet underground year-round into your home, where they pump heat in or out, depending on the season.

You can also think of ways to modify your home's structure for efficiency. Brian Castelli, executive vice president for programs at the Alliance to Save Energy, built an energy-efficient home in Falls Church, Va., that has windows with an overhang. The angle of the window cover is calibrated to keep the sun out in hot summer months but let it in during winter months when the sun is lower in the sky and can heat rooms passively. You can work with a landscaper to plant trees that will serve the same purpose.

The final step. To achieve a superefficient home, the next step is alternative energy. The most common form is solar power, but it can include the rare residential wind turbine. Farr estimates that installing a solar hot-water system, which is cheaper than installing a photovoltaic system to generate power for the entire home, has a payback of seven or eight years. However, solar panels may elicit complaints from neighbors, who may consider them to be an eyesore.

If you've gone as far as adding an alternative energy source, you may be interested in third-party certification of your green home. LEED, the pre-eminent certification standard, does not have a separate category for renovations, but if a home has had a full retrofit, it may be eligible for LEED residential certification. The National Association of Home Builders also offers a certification for renovations.