Are you Spending Money or Investing it?

posted Oct 14, 2009, 11:11 PM by Brian Carpenter   [ updated Apr 3, 2012, 5:41 AM ]
Home projects are often viewed differently depending on your outlook. I was in a conversation the other day with a person for whom I had done a Home Energy Audit. The results were pretty average for a house of its year, and in my recommendations I suggested some ways they could save some money. The thing was, my recommendations were not so simple as"turn down your thermostat". They actually required the clients to spend some money making the changes. This was met with a bit of pessimism and phrases like: "I can't spend the money on that" kept coming up during the conversation.

I guess it was a difference of perspective. For me, investing money in Home Energy work, especially Weatherization, is not on a similar playing field as, perhaps, a new floor, or new kitchen. Weatherization work is an investment in your house, one which will bring about a dividend over time the same way an investment in a money market account might be expected to. As long as fuel prices keep going up and the winters stiill get cold, investing on weatherization is just that, and investment. A kitchen, however is an aesthetic improvement. Perhaps it is just as important, but it could only return the initial investment in the event of a sale of the home, and it is just as likely that the new owners will rip it all out and do it over their way. (I have done the ripping in the past).

I have never seen anyone rip out a good insulation or air sealing job because it was not to their particulat taste. Insulation is expected to be there, and expected to perform. And the savings from said work come back to you on a monthly basis during the heating season, and they do so for as long as you own the home. There has never been such a sure thing.

For example, I did an audit of a home built in 2003 and determined that their house needed to actually add air to maintain proper influx rates and remain healthy. So in this case, air sealing or weatherization work was not appropriate. So, I took a look at the clients recent energy bills and found that they were renting a hot water heater from the utility. It was sitting in the same closet as the high efficiency boiler. I determined that giving that back to the utility and replacing it with a boiler-fed domestic hot water tank was the best investment they could make. They would save a very real $15/month rental fee. They would save the estimated $290/year cost of operating the appliance. And their boiler was at least 40% more efficient than the water heater, so they would heat the same water for less all year. Yes, it is a $1200+ investment, but  they would recoup that in less than 18 months on the rental fee alone. At the end of which, domestic hot water would be , in effect, free all winter, and very affordable in the summer, with dramatically less latent heat loss from the device itself.

But that is if they looked at it as a investment and not spending money on their home. If they were just spending money, they would have bought a couch. And there is nothing wrong with that.