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Energy Efficient Home Upgrades – Which Ones Are Worth It?

Energy Efficient Home Upgrades – Which Ones Are Worth It?

We all love the idea of saving money with an energy efficient home. A penny saved is a penny earned, after all. But not every energy efficiency upgrade will give you a return on investment.

The determining factor in whether an energy efficient upgrade is worth the investment comes down to two factors:

  • How long will it take to pay for itself in savings?
  • Does the cost of the investment warrant the monthly savings you stand to see on your energy bills?

In this article, we will evaluate both by breaking upgrades down into three sections:

  • Energy Efficient Upgrades That Pay For Themselves In A Reasonable Amount of Time
  • Upgrades That Pay For Themselves “Eventually”, and
  • Upgrades That MAY Pay For Themselves “Some Day”

Understand that anytime you can improve the overall energy efficiency of your home, there is an inherent benefit. It’s just that some upgrades make more economic sense than others because the savings you realize will quickly pay for the upgrade.

First, let’s clear the air with the most obvious question – which upgrades will pay for themselves the quickest in energy savings?

Energy Efficient Upgrades That Pay For Themself In A Reasonable Amount of Time

  • Outdoor Solar Lighting
  • Low-Flow Showerheads and Faucet Heads
  • Smart Programmable Thermostat
  • Humidity Switch for Bath Fan

Let’s break down each of these and look at how they can pay for themselves in a relatively short period of time.

Outdoor Solar Lighting

This only applies if you currently have outdoor lighting or are considering outdoor lighting for your home. If you are, however, investing in simple solar solutions can keep your energy costs down without compromising outdoor security or accent lighting.

While upgrading your home to LED lighting throughout is definitely a smart energy-saving strategy, outdoor lighting is often overlooked as an opportunity to save money. Yet each night homes power outdoor flood lights and accent lights even though no one is outside to take advantage of them!

The Department of Energy reports that over $10 billion per year is spent on outdoor lighting. That includes city street lights and many other contributors but it makes sense to get control of your little piece of it.

When I built our new home I made it a point to go strictly solar with outdoor lighting around our pool deck. It uses zero electricity yet the deck and pool are well lit all evening and into most of the night thanks to the power of the sun.

And the real advantage here is that I can continue to reap the benefits of that investment for years to come. I even purchased solar security lights for around the house so that even if the power goes down I still have motion-sensing security lighting. Best of all, it adds NOTHING to my monthly utility costs.

Suggested: Read How To Get Started With Solar Power (Simple Solutions!) for more information on how you can incorporate simple solar powered lighting into your energy saving strategy.

Low-Flow Showerheads and Faucet Heads

I never realized how easy it is to reduce monthly water costs until I learned about these devices. Low flow showerheads and low flow faucet heads are super-simple upgrades that immediately begin saving you money.

The average “off-the-shelf” showerhead will use at least 2 gallons per minute. Low-flow showerheads like this one, however, cut that down to 1.25 gallons per minute, easily reducing usage by more than 30%. Best of all, these are very inexpensive and simple DIY upgrades.

Kitchen and bath faucets can be opportunities to save as well with low-flow faucet aerators. Don’t overlook these money-saving opportunities just because they are low-cost. They can quickly recoup their costs in water usage and then continue to provide savings on your monthly utility bills for years to come!

Smart Programmable Thermostat

There are very few energy-saving investments that I’m somewhat radical about, but this is one of them. I upgraded both of my central air and heating systems (we have a separate unit for upstairs) with smart programmable thermostats and I’ve had zero regrets!

Did You Know – The Department of Energy reports that about half of a U.S. household’s energy costs go to heating and cooling a home. Getting control of this expense is worth the investment!

It is amazing the amount of control that you can gain with these devices and that control equates directly to energy savings. For example, you can turn the entire system on or off, adjust the thermostat, set up schedules based on time of day, and even set up a vacation mode for while you are away.

Here’s a simple example. Our upstairs is only used in the afternoons when my son gets home from school and on the weekends. During those hours and days I have it set to keep the room comfortable.

During the off hours, however, when no one is up there the thermostat pulls back to a less comfortable but very energy efficient level. I could never do that with a manual thermostat. It would get set while he was up there and then forgotten and left burning money in energy costs all night!

Here’s another great example. We are generally at work during the day for pre-determined hours. The thermostat knows this and adjusts the temperatures back accordingly. However, if one of us is heading home early we can adjust the thermostat from our mobile phone so that the house is nice and cozy by the time we get home!

This is the model of thermostat that we have in our house. I wholeheartedly recommend it based on using them since 2017. In fact, I will never go back to a manual thermostat again!

Suggested: Read Automate Your Home Electricity Savings for more information on how smart programmable thermostats and other automated devices can help you to save money on your monthly electrical bill.

Humidity Switch for Bath Exhaust Fan

This is the one. This is the single, biggest waste of energy in a home. Why? Because it is designed to exhaust conditioned air out of your house. Now, that sounds crazy, but it’s true. A bathroom exhaust fan, by its very nature, takes conditioned air (the air you paid to heat or cool!) and exhausts it outside. Of course, the goal of this device is to exhaust humidity (and at times odor) but when it is left on, unattended, it continues to force conditioned air out and can cost you a small fortune in energy costs!

I used to wake up and find that my kids’ bathroom exhaust fan had run all night. What a waste of money!

I solved this with a simple afternoon upgrade. A humidity sensor like this one that automatically turns the exhaust fan off after humidity levels return to normal. It’ll turn it on automatically as well if humidity levels rise while you are in the shower.

But it gets better. You can turn it on manually as an “odor eliminator” and it will still turn itself off after a predetermined amount of time.

This one paid for itself quickly in my home, mostly due to bad habits of the kids but my wife was guilty of leaving it on at times too. I can tell you this: putting an automated stop to this energy waste is a no-brainer!

Upgrades That Pay For Themselves “Eventually”

While the return-on-investment in the energy saving upgrades is slower, these are still very viable second-tier upgrade options for ensuring an energy-efficient home.

  • Phantom Power Interrupters
  • Replacing Incandescent Lighting With LED
  • Insulate Your Water Heater and Pipes

Let’s break these down and see why each of these should still be on your to-do list for creating an energy efficient home.

Phantom Power Interrupters

Phantom, or vampire power consumption accounts for about $100 in annual energy costs for average household according to the Department of Energy. You won’t retire on the savings from this one alone, but it is worth getting these energy consumption hogs under control.

What’s happening with phantom energy consumption is, whenever electronic devices are plugged in, they are drawing a small amount of energy, even if they aren’t actively being used.

Computer equipment, televisions, the list goes on. Just look around your house at all of the electronic devices that are plugged in right now even though you aren’t using them. It’s eye-opening when you stop and take inventory of it.

You can get control of this energy waste with some inexpensive energy-conservation power control devices.

For a home computer, this smart surge protector is a smart buy. It’s designed so that when the computer is turned off, it automatically cuts power to all connected devices (monitors, printer, etc). This is the type of device that pays for itself without you having to think about it. It does everything automatically.

This would also be a great option for a home theater where you want to kill power to all of the accessory devices when you turn off the TV.

Granted, it will take some time for you to save enough in energy usage for it to pay for itself but it’s inexpensive and doesn’t require an active lifestyle change in order for you to benefit from its capabilities. That’s a win-win in my book.

Replacing Incandescent Lighting With LED

I don’t think anyone is disputing the logic of moving to LED lighting anymore. Still, LED lights are more expensive than traditional incandescent options (if you can find them). You do stand to save money in energy costs by converting your home to LED lighting but it will likely take some time for you to recoup your initial investment and really see a savings on your electric bill.

The good news is that these devices last up to 25 times longer than their antiquated predecessors and can use up to 75% less energy according to the Department of Energy. So, while it may take a while for LED lights to pay for themselves, they have the stamina to get you there.

Insulate Your Water Heater and Pipes

I have researched this one quite a bit and, although there is a lot of debate on the time it takes to see a return on investment when it comes to insulating your water heater and the pipes that extend from it, there aren’t many “experts” who will tell you its a bad idea.

The challenge with zeroing in on savings with this one has to do with the varying levels of built-in insulation that exists in water tanks from different manufacturers. Some are better, some are worse. What they do all have in common though is that they suffer some level of heat loss. And heat loss means energy costs.

And for that reason, a water heater insulation blanket is still a good investment. Although you won’t see a drastic reduction in energy costs, it should give you with at least some money savings that can add up over time. These blankets provide an R-10 insulation value which is better than a lot of HVAC ducting insulation, sadly.

Suggested: Read Why Is My Electric Bill So High? Here’s The Answer! for more details on saving money on your electric bill with strategies like these.

Upgrades That MAY Pay For Themselves “Some Day”

What we’ve done is address the long-hanging fruit first. The energy efficiency upgrades that are most likely to not only make a positive impact on our monthly utility bills but to actually pay for themselves in energy savings.

Now, we are taking our energy savings to the next level. We are improving the thermal envelope of our home’s structure and upgrading major appliances to Energy Star certified models. But there is a caveat to each of these so let’s proceed cautiously and ensure that we do our due diligence.

I’ll admit that it’s difficult for me to put some of these in this category because they rank among my favorite hacks for stopping energy waste. At the time, these upgrades are generally either expensive or difficult (or both) and the highest expense an upgrade costs, the more dramatic the energy savings needs to be if we are to see a return in energy savings for our efforts.

  • Air Sealing
  • Increasing Insulation
  • Upgrading to Energy-Star Certified Appliances

Here’s a breakdown of the energy saving potential for each of these and why they ended up on this section of the list.

Air Sealing

I am an avid believer in the benefits of air sealing. When I built my current home I spend countless evenings and weekends going through every seam and opening that I could find in the attic and walls and filling them with Great Stuff foam spray. Light fixtures, holes where wiring and pipers were routed, and air conditioning vents were all sealed with foam spray. Seriously, I did that.

air sealed vent

While I remain unwavering in my conviction of the benefits of air sealing a home, I have to admit there are some very serious challenges with this one.

First, if your home is already insulated, finding and sealing the countless number of potential air leaks can be overwhelming and likely impossible. That doesn’t mean it shouldn’t be done, just that it may not be possible for some people to do on their own.

Second, the return on investment for this one is good but it won’t necessarily be life-changing compared to the amount of work involved. This of course depends on how many breaks there are in the thermal envelope of your home but Energy Star estimates a 10% savings on annual energy costs from air sealing. It’s worth it, but you may not be able to access the air leaks to seal them.

But air sealing is about more than just the attic and that’s where you can take advantage of this energy saving opportunity easily. Caulk around windows, make sure the weatherstripping on exterior doors is in good condition and isn’t allowing conditioned air to escape and take the time to install outlet insulation gaskets on all of your exterior wall outlets. I even installed these in my garage on the walls that were adjacent to conditioned space.

insulation gaskets for electrical outlets

Increasing Insulation

This is another one that depends heavily on your situation. If you have very little insulation in your attic and walls, your energy savings will be much higher than if you already have an solid blanket of insulation.

There is a diminishing return on investment when it comes to adding additional insulation. While you do stand to reduce your energy costs, you won’t necessarily see a significant decrease in your electric bill by going from an R-30 in the attic to an R-45.

What you need to do is look at the type of insulation that you have in your attic (rolled or blown in) and how thick it is. If you see a large number of visible holes in the insulation blanket (rolled insulation is very prone to this due to the nature of its design) then it may be worth having a fresh batch of insulation blown in.

Attic insulation - is it worth adding more?

Compressed insulation could also be a cause for concern as it loses its resistance value when compressed. Examine your situation carefully to decide whether or not this is a worthwhile investment in energy savings.

Upgrading to Energy-Star Certified Appliances

Everyone talks about these. Energy star appliances are marketed heavily as opportunities to save money on energy costs. But the math is a little fuzzy.

You see, it depends on several factors. The age of your current appliance and it’s expected remaining life for example. If your washing machine is not Energy Star certified but is only two years old, you will most likely not see energy savings worthy of ditching it for a new Energy Star rated model.

The difference in energy savings between the two devices should also be factored in. It may not be worth upgrading if you will only see a minor increase in efficiency.

On the other hand, if you are already in the market for an upgrade, meaning the lifecycle of your current appliance is near its end, then spending a little extra for an Energy-Star rated upgrade may make sense.

Still, you have to weigh the additional cost against how long you will be using it. If you anticipate moving in the next few years, for example, you may not recoup the extra money spent to get that Energy-Star rating.

You see, it’s not exactly black and white. And that is why, despite the glaring benefits of energy-star rated, higher efficiency systems, it is not always a simple matter when determining whether or not an energy efficient appliance upgrade is worth it.

And so, Energy Star appliance upgrades falls in the category of upgrades that MAY pay for themselves someday.

I’ve written a complete guide on the seven critical factors to determining if an appliance upgrade is worth the investment. I highly suggest you read that article before making a purchase.


I hope that this helps you to have a better understanding of where you can see the greatest benefit when it comes to energy efficient upgrades. Some will result in recouping your investment quickly. Others will take some time. In the end, you need to make decisions that are informed but are within your budget. Focus on the small things you can do to improve the energy efficiency of your home and grow from there.

If you would like to really get a handle on the energy efficiency of your home, read Is My Home Energy Efficient? Here’s How To Know!

Do you want to cut energy costs and provide a sense of security for your family in the event of a power outage? Read Seven Reasons Why A Solar Generator May Make Sense For You

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