Why Go Green? Major & Minor Energy Efficiency Upgrades for Homes ? Part 1 of Our Going Green Series

April 8, 2009


Before We Begin?

Trees offset energy consuption

Trees offset fossil fuel consumption

This series is intended to provide a framework for understanding what being environmentally responsible means, how it can affect energy consumption, resource utilization, and what impact energy savings can have on our everyday lives. The information provided is not intended to be definitive or strictly scientific. I am not trained as a civil or mechanical engineer. I have referenced standard sources1,2,3,4,5,6 and used calculations that are widely accepted in making estimates on costs, savings, and CO2 emissions7,8,9. The basic assumptions made in this series are that a majority of US homes were built before 1985, the average size home is 2000 square feet, and mechanical equipment, insulation, and windows, are either original or at least 10 years old. I used the average monthly cost for natural gas and electricity for Chicago in 2008 in any calculations requiring energy cost assumptions10. Every building has unique features, making broad generalizations about what any particular energy efficiency upgrade will cost difficult. However, my goal is that the reader can go to the sites referenced and reproduce the calculations I have made for their particular situation thus making an informed decision for themselves.

Financial or Environmental Motivation

As I introduced in my two previous articles, my main tenets are that there is a shade of green for every project and for every budget. This means that in a very real way, upgrading our buildings to more energy efficient structures will help lead to decreased dependence on finite natural resources, lead to economic recovery, and improve the comfort and quality of our indoor spaces.

My next four articles are designed to provide some real life examples and comparisons for readers to evaluate as they consider how they might incorporate green upgrades to projects that are planned, dreamed, or unexpected. I will begin with single-family residential properties, but the comparisons can be used for multi-family and small commercial buildings as well.

This article, the first in the series, will look at air conditioning, gas heating, the building envelope (primarily insulation), and hot water heaters. I have focused on forced air systems for heating and cooling, and gas hot water heaters. There are of course many different types of heating and cooling systems, but to address them all in this short article and series would be too much to tackle. The calculations and comparisons for gas and oil-fired boilers, electric hot water heaters, and room air conditioners are similar, and the principles of cost savings, energy savings, and CO2 emission reductions are equally well demonstrated using any combination of systems. I have chosen forced air heating and cooling and gas hot water heating because it is what I happen to have in my home, not because it achieves any particular agenda.

In the United States in 2008, buildings consumed almost 40% of all energy produced, 70% of the electricity, and 14% of the potable water. They also produced 40% of the CO2 emissions in that year.11,12 In many articles you can find on the Internet, in publications, and in advertisements for energy efficient products, there are claims made of impressive energy savings for making certain energy efficient improvements to homes and buildings. 20% energy savings for buying a new furnace, or 20% savings for insulating your home, or 10% savings for installing a new water heater are claims I see frequently. What would it mean to our country if every building were actually able to reduce its energy use by that much? What about if the savings were more substantial? Is it worth trying to go green if we can reduce the energy consumption of buildings in the US by 25% or 30%? I think so. But is it realistic and affordable? Yes it is, and I?ll show you how.

Does High-Efficiency Air Conditioning Pay Off?

Let?s start with central air conditioning. The efficiency of an air condition is measured in a value called the Seasonal Energy Efficiency Rating (SEER). The higher the SEER efficiency rating, the more efficient the system is. Heat pumps have a slightly different rating scheme. I will focus on the standard split system air conditioning units. Most equipment that was installed more than 10 years ago has a rating of 10 or less. It is common to see a SEER of 9 in homes 20 or more years old with original equipment.  The other part of the energy equation is the tonnage, or how much cooling the unit can provide. Tonnage is really an expression of electricity consumed to create a certain level of cooling and is measured in British Thermal Units (BTUs). I used 3 tons as the common element for this example. A 3-ton unit is rated at 36,000 BTU/hr. This can get complicated and technical, so I made a table to show the results.


A 13 SEER system is 31% more efficient than a 9 SEER system it might be replacing. Thirteen SEER is currently the minimum efficiency rating allowed by the Department of Energy. A 16 SEER system is another 15% more efficient, and a 21 SEER system is an additional 10% more efficient. That?s fine, but what you really want to know is how much will it cost you to run that system and at what point does the cost of the more efficient system outweigh the savings you might hope to get.

Assuming 125 days of cooling at 8 hours a day (as this makes the math easy)13 what you see is that the 13 SEER system saves almost $200 a season, a 16 SEER system saves you more than $225 a season, and a 21 SEER system saves $300 a season. A new 13 SEER system might cost $1035 for the unit alone, 16 SEER system $1378 for the unit alone, and a 21 SEER system $2100 for the unit alone. (I have left out the cost of labor and other parts that will probably be required as these would be required for any new system, regardless of its efficiency in the same installation.)

So in the end, a 16 SEER system is 44% more efficient, only 25% more expensive and saves around $225 a season in energy costs compared to the 9 SEER system it replaces. Basically, in the first season of use, the extra efficiency pays for itself and the homeowner has money every year after that to go to buy season passes for the entire family to their favorite amusement park.

For those keeping track of CO2, the 13 SEER system would emit 6.23 tons of CO2 per year and would require the planting of 31 trees to offset that amount of emission. The original 9 SEER system emits 9 tons of CO2 requiring 45 trees, and the more efficient 16 SEER system emits only 5 tons of CO2 and needs 25 trees to clean it up. The 21 SEER system is quire a bit better, emitting only 3.85 tons of CO2 and needs only 14 trees to clean up that amount.

When looking at this, you have to balance what you can reasonably expect the consumer to pay and what they can reasonably expect to get in return. If a homeowner spends 25% more, can recover that cost in a year, saves 40% in energy and reduces CO2 by 44%, that is a win for everyone.

Does High-Efficiency Heating Pay Off?

Now that we?ve got our feet wet with air conditioning, let?s take a similar look at furnaces. Again, I?ve made some assumptions and also limited myself to natural gas, forced air systems. There are oil and gas fired boilers, electric systems, and other modes of heating like stoves, fireplaces, and space heaters, but I will not cover those. For our 2,000 square foot house, we will be using an 80,000 BTU furnace as the controlling number for the energy and cost comparisons.

Furnaces are rated by their Annualized Fuel Utilization Efficiency (AFUE). This is a way of measuring how much of the heat created by burning the gas is transferred to heat in the home. It says that for every dollar?s worth of gas burned, the rated percentage is used to create heat while the rest is wasted out the vent stack. An 80% AFUE furnace converts 80 cents of every dollar worth of gas to heat in the home. A 95% AFUE furnace wastes only 5 cents worth. I?m simplifying this a bit (more than a bit) since not really all the gas burned is converted to heating and the rating is not the actual output of the unit. But it serves the purpose for here.

Once again, have a look at the table below and ignore all the technical stuff.


I used 240 days of heating for 8 hours a day for the energy consumption calculation. Most older homes have an 80% AFUE furnace. The actual output is going to be determined by many more factors than just the gas burned: how clean the unit is, how well the ducts are sealed, and several other factors may make the older unit much less efficient than 80%. But for consistency, 80% will be the base figure.

The government says that a 90% AFUE is the minimum EnergyStar® compliant unit. You can purchase 80, 90, 92, 94, 95, and 96% AFUE units. Again, we want to know the tipping point in efficiency versus additional cost of a more efficient unit if you leave out all the labor and extra equipment that has to be purchased (blowers, humidifiers, and ducting).

An 80% AFUE unit uses 1090 Therms15 which will cost $1,384 to run for the season. A 90% AFUE furnace uses 780 Therms and costs $991 for the season and is 30% more efficient. A 95% AFUE furnace uses 739 Therms and costs $939 for the season and is 34% more efficient. (Comparison is to a new replacement 80% AFUE unit or a peak running older unit).

The base price of a new 80% AFUE is $678, a 90% AFUE unit is $919 (30% more expensive) and a 95% AFUE unit is $1,217 (80% more expensive). The time to recovery of the cost is quickly seen. It will take only half of the operating season to recover the additional cost of a 90% efficient system that saves a little over 30% in energy! Even the 95% efficient system pays for itself in a season and a half. Now the homeowner has saved enough money to go buy season hockey tickets for the family (minor league at least).

For the green converted, the CO2 count is also pretty clear. The 80% AFUE unit generates 2.6 tons of CO2, and the 95% AFUE unit creates only 1.8 tons of CO2, a 31% reduction. That?s the equivalent of 13 trees needed versus 9 trees needed.

So the tipping point is at 90% AFUE. Everything after that is incremental. However, most of the tax rebates and incentives require you to buy a 94% AFUE unit or better to qualify (more on that in a later article in the series) but as you can see, the cost difference and the time to recover that cost is not that great. In 2 years, your additional cost for the most efficient unit you can purchase is recovered.

Do High-Efficiency Water Heaters Pay Off?

If I have not lost you yet, let?s take a look at water heaters. Using natural gas as our heat source (not ignoring electric or solar water heating, just not including them here) what can we do to improve efficiency and save money?

Water heaters are rated on a measurement called the Efficiency Factor (EF). This reflects the overall efficiency of the unit taking into account the heat recovery efficiency (energy captured by the unit to heat the water), the stand-by loss (how much energy is lost due to the water standing around), and the cycling loss (the loss of heat as the water circulates through a water heater tank, and/or inlet and outlet pipes). There are other measurements for water heaters but they are not applicable now. The size of the water heater and its BTU are accounted for in the EF, so they do not need to be accounted for in this demonstration.

Most older water heaters have an EF of 0.57 or even less. The most efficient new tanked water heaters are up to 0.68, and a tankless water heater can have a rating of 0.84 EF.16 Looking at the table below and ignoring all the technical stuff that is boring, lets look at 3 examples:


Assuming an EF of 0.57, you would use 262 Therms and spend $297 to heat your water for a year. An EF of 0.67 uses 233 Therms and costs $264. A tankless 0.84 EF water heater uses only 177 Therms and costs $201 for the year. The 0.67 EF unit is 22% more efficient and the tankelss unit is 33% more efficient. An EnergyStar® compliant water heater is at least an EF of 0.66 until 2010.

The cost of a new water heater might run $418 for a 0.57 model, $528 for a 0.67 model, and $900 for a tankless 0.84 model. Once again there is a tipping point. Its only $100 more expensive to get the more efficient tanked water heater, but since the overall savings rate is lower by comparison, it will take 3 years to recover the cost difference. But look at the tankless unit. It is twice as expensive, but 33% more efficient. The time to recovery is only 4 years. Here the choice is harder to make and might have more to do with individual economics than anything else.

The CO2 count is not that helpful in this case either since the numbers are not as big. The 0.57 EF unit generates 0.42 tons of CO2 and the tankless 0.84 unit 0.29 tons of CO2. It takes 2.14 trees to absorb the CO2 from the base unit and 1.45 trees for the most efficient unit. Still and all, the savings in CO2 are there and not immeasurable. For those trying to be as energy conscious as possible, clearly the tankless is the way to go, as long as cost is not a limiting factor.

Does Insulation Pay Off?

The last part of the energy equation I want to look at is insulation. This really is much harder to quantify. Insulation of any type is really all about air sealing. Keeping outside air out and inside air in, and controlling the amount of the exchange of the two air volumes as much as possible. The more the house leaks, the more energy is wasted. So insulation is really about the integrity of the home and how well it is sealed.

A house with many leaks. (Click to enlarge)

A house with many leaks. (Click to enlarge)

Homes can leak energy in all kinds of places. Wall outlets, recessed lighting, outdoor spigots, window frames, door frames, window seals, door seals, attic openings, crawl spaces and basements, and floor/wall junctions are all part of the building envelope that need to be addressed when looking at decreasing the amount of energy that is leaking from a home.

Since every home is different, the only way to figure some of this out is have the home inspected by a licensed energy rater. They can bring specialized equipment to the house and measure how badly it is leaking, from where, and provide an action plan to fix them.17

I?d like to make a couple of assumptions. First if you have an old home that has single pane windows, you should simply replace them. Whatever the cost is, replacing the windows with Low E glass, double or tripled paned windows will save so much money compared to the initial cost that it should be done if the budget allows.

Second, most older homes, those built in the 1950s, and some built in the 1975 ? 1985 boom are under insulated or not insulated at all. Attics and basements or crawl spaces are places that can be pretty easily attended to and upgraded with proper insulation. Exterior walls are much harder and will require either removing some of the siding, drilling holes in the mortar of brick homes, or doing extensive indoor work. Unless a major renovation is in your budget, wall insulation won?t be cost effective.

A well insulated house (Click to enlarge)

A well insulated house (Click to enlarge)

The Department of energy says that you can save 20% on overall energy costs related to heating and cooling by making sure that the home is properly insulated and sealed.18 For our region, the recommended insulation for an attic space is R-49 (R value is the amount of insulation needed to achieve a certain level of thermal resistance.) and the recommended level for basements is R-19. Exterior walls are recommended to be R-21.

What might it cost to insulate the attic and basement of our sample home? Assuming R-30 exists in the attic, adding 8 inches of insulation to achieve R-49 for fiberglass would cost roughly $931. To do the basement, which is likely to be uninsulated currently and taking it to R-19, it might cost $600. (For this purpose I contacted a few contractors and asked them to give me installed prices for this project). So for a total investment of $1500, you can reasonably expect to reduce your energy usage by up to 14% and save 12% overall on you energy costs. But you might expect to see a 20% reduction in heating and cooling related costs. For example, our home with the 9 SEER air conditioner and 80% AFUE furnace, this would save $380 for a full year of heating and cooling and reduce the CO2 emissions by 2.32 tons. So you can see, insulating and air sealing the home can save quite a bit of money right away, and the payback on that $1500 is only 3 years ? faster if you apply for federal credits and local incentives.19

Other Energy and Money Saving Options

There are more ways to save money and energy and for it to be cost effective. Every appliance in the house has an expected lifespan. At some point it needs to be replaced. Choosing EnergyStar® compliant equipment will guarantee that you are getting a unit that has been certified to meet the minimum federal standards for energy efficiency. The payback on any of these items will be within the lifespan of the unit. Choosing models that exceed the minimum standards is also possible, and desirable, but you have to do the energy/costs analysis to see at what point the return on your investment is outweighed by the absolute cost of the equipment.20

All Systems Impact Each Other

In all the discussion about cost and energy and CO2, what is probably lost is the fact that you can?t look at each individual system in isolation. Changes and improvements in one of the home?s systems will affect the others in some way. Creating a tighter building envelope will reduce the demand for heating and cooling and thus decrease the size of the equipment required ? additional savings. However, a tighter home might have moisture and odor control issues and will need better fresh air ventilation via a mechanical air exchanger. Programmable thermostats can help reduce energy costs by adjusting the temperature of the house based on the time of day and how many people are home. Indoor air quality can be improved in a tighter home, so better air filters might be needed. This reduces air particles and can decrease asthma or other respiratory illness (more in a later article). All of these items will add to the cost of the upgrade, but since the payback time is so short on the basic unit, it?s a cost that can be recovered in a 3 year time frame.

A more efficient water heater might mean that you can set the temperature of the hot water lower. You might also be able to use hot water for other purposes in the home, or recapture drained warm water to help preheat water going into the hot water heater, making it more efficient. (The waste water is not mixed with fresh water, just the warmth from that water is exchanged).

Does Going Green Pay Off?

If you made it this far, I thank you for taking the time to work through what amounts to a very complicated assessment of the nuts and bolts of going green in your home. The original question that I posed in the beginning was whether it is worth doing energy efficient upgrades at all, and if you do them, can you achieve the savings that are bandied about. While the savings are not strictly additive, you can see that under each system we looked at, there are considerable savings to be had by going green. Saving real dollars in hard times is no joke. Depending on the installation, and depending on the starting point of the building, the overall savings might be substantially more than the 20% or so I?ve shown using a 25 year old home.

In addition to saving money, I think I?ve shown that the energy savings for these upgrades is pretty substantial. Now multiply the energy savings a few million times over and you can see that the total energy consumption can drop pretty dramatically by incorporating modest individual improvements. The homeowner saves money, and our country begins to move toward a more efficient energy model. Instead of 40% energy consumption, maybe we get down to 30% energy consumption for buildings. That would amount to literally billions in savings annually.

The Benefits of Going Green Are Real

I hope that this article has given you some understanding and rationale for undertaking energy efficient upgrades to your existing homes, provided you did not fall asleep getting to the end. I?m not advocating going out to replace equipment that is in good working order. But if you need to replace your equipment due to malfunction or disrepair or are planning on replacing it as part of a home renovation project, there is no reason why every home can?t be upgraded to the most efficient units available. The upfront costs are real, but the pay back on that cost is pretty short. If you plan to stay in your home for at least 4 years, every single upgrade will pay for itself in that time, most of them in a year or less. And the benefits to the environment are everlasting. I have provided a few documents to look at and several links to websites and organizations that can provide immense amounts of information on this portion of our look at going green. The next article will look at the home as a system and I?ll try to explain more about additive effects of making changes to your homes.


Additional Helpful Green Links


  1. http://www.energystar.gov/index.cfm?c=home_sealing.hm_improvement_methodology
  2. http://www.ashrae.org/publications/
  3. http://windows.lbl.gov/software/resfen/FAQ/31_FAQ.htm
  4. http://www.eere.energy.gov/
  5. http://www.gamanet.org/
  6. http://www1.eere.energy.gov/consumer/tips/water_heating.html
  7. http://en.wikipedia.org/wiki/Greenhouse_gas
  8. http://www.carbonify.com/carbon-calculator.htm
  9. http://www.energystar.gov/ia/business/bulk_purchasing/bpsavings_calc/Calc_Furnaces.xls
  10. Natural Gas: $1.27/Therm ($0.0127/cubic foot); Electricity: $0.13/kWh
  11. Environmental Information Administration (2008). Annual Energy Outlook 2008 (from USGBC)
  12. United States Geological Survey (2000)(from USGBC).
  13. http://www.inspect-ny.com/aircond/aircond04.htm
  14. http://www.carbonify.com/carbon-calculator.htm
  15. 1 Therm = 100,000 BTU/h = 100 cubic feet of natural gas
  16. Tankless water heaters heat water instantaneously when needed and do not have a storage unit. They can be electric or gas and be whole-home or point source. For this article, I?m only including whole-home gas fired units.
  17. http://www.energysavers.gov/seasonal/energy_audits.html
  18. http://www.energystar.gov/index.cfm?c=home_sealing.hm_improvement_methodology
  19. www.dsireusa.org
  20. www.cee1.org has a list of products that exceed energy star certification standards.

We would like to thank joiseyshowaa for today’s beautiful picture of two trees. Thank you for sharing them via the Creative Commons License.

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About Stuart Feldman

Stuart Feldman, an emergency medicine physician by training, but recently received his LEED AP. He has been working as a green developer for the past four years. Feel free to contact him through his website www.rivertrailproperties.com. He assists in the design, construction, and materials selection for any project. He is LEED AP certified, and can help get your home LEED rated or EnergyStar® certified, or simply running at peak performance. He has 8 home designs that can be built on most city-sized lots, and he can design homes of any quality and style using his design team. New or renovated home projects can be completed in four months from the time of starting construction. Stuart also is building a conservation community in 2010. The River Hill Conservation Community embraces the best of environmentally responsible design and construction in an innovative and community oriented subdivision in Lake County and will showcase what is possible in the design and construction of truly environmentally responsible homes. Stuart still works full time in the ER and enjoys time with his 2 young sons and loving wife. In his spare time he enjoys a round of golf, sailing, and dining out. You can contact him at stuartdo@rivertrailproperties.com.

View all posts by Stuart Feldman

5 Responses to “Why Go Green? Major & Minor Energy Efficiency Upgrades for Homes ? Part 1 of Our Going Green Series”

  1. Lisa Gregg Says:

    Whoa! tons of great info. Lots to digest, but definitely worth the 10 minutes to read. Thanks for putting this all in one place!

  2. Libby | leed certified Says:

    This is a lot of great information and resources. I have an older home and I know I have tried to update the air conditioner, appliances, and windows – it seems to be an on going process. There’s a lot of great information to help me prioritize!


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