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HOME ENERGY AUDIT: ENERGY EFFICIENCY WORKSHEET

Calculating Lifecycle Costs—How much will an appliance cost to buy and use over a lifetime?

 purchase price + (annual energy cost x estimated lifetime x discount factor) = lifecycle cost

 APPLIANCE ESTIMATED LIFETIME (years) DISCOUNT FACTOR water heater 13 .83 refrigerators and freezers 20 .76 room air conditioner 15 .81 dishwasher 12 .84 clothes washer 18 .78

Calculating Payback Period—How long will it take to recover the extra money you spend for a more efficient appliance?

 purchase price of more expensive model - purchase price of less expensive model = difference in purchase price

 higher yearly operating cost - lower annual operating cost = difference in annual operating cost

difference in purchase price / difference in annual operating cost = payback period

Example: You are shopping for a refrigerator. There are two models. One casts \$100 more than the other but saves \$25 per year in electricity costs. Which refigerator should you buy?

 \$1000 purchase price of more expensive model - \$900 purchase price of less expensive model = \$100 difference in purchase price

\$100 / \$25 savings in electricity costs/year = 4 years It would take 4 years to realize the savings. However, since the payback period is only 4 years and your refrigerator will last much longer than that, you will save money over the life of the rerigerator and conserve natural resources.

Problems:

You would like to buy a new refrigerator and are looking at two different models.

1. If model A uses 700 kWh/year, how much is the yearly operating cost (based on a cost of \$.089 per kWh)?
700 kWh/year x \$.89 /kWh = \$62.30
2. What is the lifecycle cost of model A if it cost \$789?
lifecycle cost = purchase price + (yearly operating cost x estimated lifetime x discount factor)

yearly operating cost x estimated lifetime x discount factor = \$62.30 x 20y x .76 = \$946.96

\$789.00 + \$946.96 = \$1,735.96

3. If model B uses 900 kWh/year, how much is the yearly operating cost (based on a cost of \$.089 per kWh)?
900 kWh/year x \$.089 /kWh = \$80.10
4. What is the Lifecycle cost of Model B?
(\$80.10 x 20y x.76) = \$1217.52 \$700.00 + \$1217.52 = \$1,917.52
5. If model A costs \$789 to buy and model B costs only \$700, what is the payback period?
(Difference in purchase price) / (Difference in annual operating cost) = payback period

\$89.00 / \$17.80 = 5 year payback period

Created for the NTEP II program on behalf of the National Renewable Energy Laboratory in Golden, Colorado.