Hey this is Ed with AtticFoil.com and this video is called "What's the payback?"
People always want to know, "Do energy improvements really payoff?" And the answer is, "Yes."
The math proves it. In this video I'm gonna show you exactly HOW energy improvements are
great investments. There's generally two methods of energy savings on a home: air sealing and
methods to reduce heat gain and heat loss. Air sealing is quite simple. Your home is
basically just a big box. Kinda think of it as a refrigerator - you're trying to keep
the air inside the box. The best way to do this is to seal the ducts, duct systems typically
leak anywhere from 5% to 20%. Testing has shown that the older the homes, generally
the higher the duct leakage. It's not uncommon to have older homes with 20%, 30%, 40% percent
duct leakage. If your sprinkler were blowing 30/ 40% of the water in the street, you would
have it fixed TODAY. But duct systems, because you can't see them, people tend to ignore
them and don't get them fixed. House air sealing is another thing. You want to caulk and seal
- seal up all the windows, cracks, crevices - as the wind blows on a house, just the
natural pressure can cause a lot of natural air changes. And once again, this is hot or
cold air that you're buying - you wanna keep it inside the box. The other area is reducing
heat gain or heat loss. This is done by installing a radiant barrier. A radiant barrier is your
first line of defense against radiant heat flow. The second thing is attic ventilation.
If you can keep your attic cooler and you're running duct work through an attic (you're
running 50 degree air through a hot attic), it's nice if the attic can be 100 or 105 degrees,
rather than 120 or 150 degrees. More attic insulation, attic insulation is your second
line on defense against conductive heat flow. So most homes need anywhere from 12-15 inches
of attic insulation. And finally, window protection. Windows are very inefficient no matter how
good they are, especially if they face West and catch direct sunlight. The BEST window
still doesn't provide a lot of thermal protection. So you want to install either solar screens
or a really good quality window film to keep the heat from getting in. Another thing is
to focus on dollars, NOT a percentage of the savings. People always ask me, "What percentage
will I decrease my electric bill?" Really, the question is "How many dollars will I take
off my electric bill?" When it comes to estimating savings and payback, it's really a question
of: Based on spending X, how much can you save? Or how much will you save (Y)? Here's
a simple example: If you make improvements which average about $25 per month in savings
- very easy to achieve - you're gonna have an annual savings of about $300. Now, how
much is $300 really worth? Say you're in the 20% tax bracket. You pay your utility bills
with after-tax money. So in order to take home $300, you'd have to earn about $375 in
order to keep $300. So the REAL value of $300 in savings is about $375 worth of income.
Now, this is a GUARANTEED return. Energy rates COULD drop down, but most people think over
the long haul, energy rates are gonna go up. So your money is guaranteed a return on your
investment (ROI). And, as energy rates go up, your ROI is gonna go up even more. So
how much would you be willing to invest for a guaranteed savings of $375 per year? Let's
take a look. At a 10% Return On Investment, you can invest $3,750 to get that $375 payback.
Or, at a low 5%, you could invest up to $7,500 to get that $375 payback. Now think about
all the improvements you can do for between $3,500 and $7,500. That's a lot of radiant
barrier, insulation, duct sealing - you can do a lot with that. And reducing an average
utility bill by $25 a month is a TOTAL No Brainer. I mean, you can buy a $20 bucket
of Mastic, start sealing your ductwork and a lot of times that will save you $20-$30
a month right there. It's pretty typical, you can easily reduce your monthly utility
bill by $50 or $100. So, it's a great investment. Now, what about tax credits? Currently there
are tax credits 30% of what you spend, up to $1500 - you need to talk to your tax professional
to find out exactly what qualifies and what doesn't. But in general most of the things
we're talking about do qualify for the 30% tax credit. Here's an example, you take that
$3,700 less an $1,100 tax credit - the REAL cost is about $2,600. Now, the equivalent
return on investment AFTER the tax credit - if you spend $2600, you get a $375 return
on your investment. We're talking a 14% return on investment on energy savings improvements.
This is a GREAT return! Let's say "What if?" What if these improvements resulted in a $50
or a $75 a month in savings? At $50 a month, your annual savings would be close to $600.
Your ROI on that, we're talking 23% or more - that is a GREAT return! Here's the deal,
experience shows that energy improvements REGULARLY have an ROI of over 30-40%. Even
on the low end of 10-15% it's a great investment. So typically 15-40% that's gonna be money
well spent to improve the energy efficiency of your home. Plus, if you go to sell your
home, energy efficient homes are worth more. So, do you do it yourself or hire someone?
Well, take a look at the money and whatever's best for you, determine your ROI and decide
if that's a good investment. AtticFoil.com provides radiant barrier foil for Do-It-Yourselfers
and professional installers. If you can invest $300- $400 for a typical home to install radiant
barrier - you can have a huge return on your investment. I've got many customers who've
spent $200-$400 on radiant barrier and then told me they saved that money in the FIRST
summer. For more information on radiant barrier foil - how to install it and other money saving
tips, visit AtticFoil.com or my blog, RadiantBarrierGuru.com. }