A few years ago my wife and I bought a house built in 1930. We took possession in October and we we were about a month away from greeting our first baby. The first year we did very little to the house other than move in. The following fall we had our first energuide evaluation and started working in the basement. We quickly discovered there was very little insulation anywhere. Over the next year and a half I purchased about $8000 worth of materials: rigid board insulation, rock wool, polyurethane sprayfoam, drywall, cellulose insulation, cfl light bulbs, lumber and a toilet. I rented blowers, drills and bought tools.
Original Energuide Rating : 34
Current Energuide Rating : 70
We currently save about $800 a year on natural gas, $150 a year on electricity and $200 in water.
So my $8000 investment saves me $1150 a year. That is a 14% return on investment. Unlike investment income there are no taxes to pay, it is just saved money. Go to any financial advisor and ask for an investment that guarantees a 14% return on your investment and they will laugh at you. The best one can do on a guaranteed investment is 2-3%. 14% is a pretty good return even on the volatile stock market.
Now what if I hadn’t done all the work myself? Well it probably would have cost me closer to $13000. In most reno projects materials and labour are worth about the same, but one insulating project, cost me about $4000 just for the insulation (tigerfoam spray foam). The project took me 3 days so I doubt a contractor would would charge me $4000 to do the same work. Even with $13000 invested that is still a 9% return. With all the uncertainties in the financial markets who wouldn’t want a guaranteed 9% return.
At the time I qualified for over $7000 of rebates through energuide for homes program. So my investment was really $1000 + my labour. Currently the national government stopped funding the energuide program so if I did it today I’d only get $3500 back from the provincial government. It is still a fantastic deal.
There are things I’ve passed on doing. I could have upgraded my furnace to one that is 94% efficient from the current 80% but that would have cost $4000 and only saved me $150 a year. That is still a 3.75% return, which is better than a GIC. The problem with using a more efficient furnace is that the returns diminish as your house holds more heat. If I used $2000 worth of fuel to heat my house and switched to a furnace that used 15% less fuel to heat the same area then I would save $300 a year. However if I reduce heat loss and I only need $800 worth of fuel to heat my home switching to the same furnace only saves me $120. Some upgrades make more sense than others. As the easy upgrades are done with the return on investment drops on things that use fuel more efficiently (like a furnace) or keep more heat in the house (like windows/insulation).
One upgrade I’m considering is the Cansolair 240. It looks to be a marvelous invention for home heating. Basically it is a solar oven that pulls the cold air from the bottom of a room heats it up outside your house and blows back in to the house through a dryer vent. Some people claim they are seeing payback in 6 years on a $3000 investment. Things are always bit sketchy without hard numbers. If they are saving $500 a year they are probably using home heating oil which is more expensive than natural gas. Even if I only saved $200 a year that would be a 6.6% return on investment. It is still a better upgrade than a high efficiency furnace and a slightly better return than paying down my mortgage. The nice thing about solar heating is that it requires no fuel at all and very little maintenance.