These 5 home improvements pay for themselves fast!

Something that is less discussed is that a lot of clean energy solutions for homes and buildings pay for themselves in about 5 years. And with oil prices heading north again, it’s time to start thinking about this. Even some of the big-ticket items are great. For example solar panels on your roof in the USA pay for themselves in an average of 7.5 years, less in some places. The equipment lasts 20-40 years.

But there are some improvements that pay out far more quickly:

  1. LED LightsLED lighting

LED lighting pays for itself immediately. Pretty much every study, or your own analysis will confirm this. Switch to LED lights and the saving will cover the cost almost always in the first year. And all you’re doing is buying different lightbulbs at Home Depot or someplace like that, and swopping them out. Usually it’s the same for businesses, although some businesses do a more expensive job and it takes a little over a year to pay off.

  1. Insulation

It’s harder to generalize on this one because insulation might mean sealing up the cracks around your badly installed windows. Or it might mean an expensive rip-out-the-walls renovation. But even if you do the latter, and do it properly, the payback is usually a few years, not a decade or something. On average, insulation pays out fast. Just don’t screw it up. Get expert help.

InsulationGas companies and furnace guys don’t want me to tell you this, but if you are building a new place or gutting something, and you build to the passive house standard (super-insulation and modern windows), you will save 80% – 90% on energy and you will not need a furnace or big-ass air conditioner.

Passive houses don’t have furnaces. They have a heat recovery ventilator for fresh air, and small, relatively inexpensive heat pump for heating and cooling. But Passive House is not simple. You must do homework, and invest some capital. It will usually pay out in under 5 years because the Passive House premium is now usually under 10% of construction costs.

Some people in North America are building net-zero (similar) for the same cost as a conventional building, but these are the determined construction veterans. Still it indicates what’s possible. If you don’t like my approximate payback range that’s a positive sign. Hire a green building engineer, because in the modern day the exact costs, savings and payout can all be modelled and calculated very accurately in advance.

  1. 32 Minisplit composite low resCold-climate heat pumps

Heat pumps (also called mini-splits and multi-splits) have a huge share of the European and Asian heating and cooling market and they are now moving quickly into North America, because they offer incomparable value, especially in smaller homes and condos. Furthermore, the newest versions are better than ever, because the North American building industry demanded better (mostly due to classic resistance to change, but It had the effect of forcing producers to increase efficiencies and improve cold-weather performance).

If you now have electric baseboard heaters in smallish dwellings, swopping them for modern heat pumps will save about half on your heating bill. They cost some thousands, so be careful and do the math or find a green HVAC guy to do it with you. Also check on grants and rebates because a lot of states, provinces or utilities offer rebates on heat pumps.

Switching to heat pumps from a gas furnace will pay out more slowly based on today’s prices (and depending where you are), but I think that will change in the next few years in most North American regions.

  1. good windowsNew windows

Do new windows pay for themselves fast? In capital letters: IT DEPENDS. The short answer is yes, but not usually in isolation. If you have really old windows and you do the aforementioned insulation upgrade, without replacing the windows, you could have problems. Properly installed and sealed fibreglass framed windows will payout fast if they are part of a larger home upgrade strategy.

  1. Hot water

Hot water is not a relatively big expense for most North Americans, but if you have a large family in one house or any other reason that you are using an above average volume of hot water, there are some good measures that can save a significant amount on water heating. If your water heater is an old one, wrapping an insulating blanket around it will pay for itself in the first year. They are inexpensive and you can install it yourself on the weekend. In subsequent years you’ll pocket 10% – 20% every year.

34 powerpipeAnother is a drain water heat recovery pipe for your shower. It’s about $1000 installed, and saves about 60% on your water heating bill. So do the math and calculate your payback. It can be installed in about an hour. How many months/years to get your $1000 back?

The big-ticket item is an on-demand water heater, which gets rid of your tank and eliminates water heating energy waste. But for this last one you’ll need some thousands, and you’ll need to sit down with your water heating bill, get a quote, and get out your calculator, because although it’s good for your greenhouse gas footprint, it might not pay out fast.


I want to also mention geothermal heating and cooling. It’s not on the above list because it’s pretty expensive up front, but financing help is creeping into many jurisdictions. It takes about 8-12 years to pay for itself. The equipment lasts 25-50 years, so it makes a lot of financial sense, helps the environment, and if used with an energy recovery ventilator and radiant heating system, provides the healthiest, most comfortable indoor air quality. It’s perfect if you’re a flush empty-nester building a retirement place on a lake somewhere.


Banks and finance companies are increasingly willing to look at upgrades like solar PV and geothermal. If that’s the case, you really only need to recover your interest payments, and that means you’re often in the black from day one, because the reduction in your utility bill almost always covers the interest on the loan. Both solar and geothermal add to the value of the property.

Sometimes there’s a little kerfuffle about exact paybacks. But there are more and more young engineers who can do the green calculations for you in advance. And as mentioned, the modelling today is generally very accurate. So ask around.

Every once in a while one of the daily newspapers finds the one idiot in the country who installed a clean energy system wrong and it doesn’t work. Generally the newspaper article fails to mention that 99.9% DO work perfectly.

Anyway start with the top of this list, cut your monthly bills, and enjoy life!

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