Is The Juice Worth The Squeeze: Energy-Efficiency Projects Make Cents
With the burden of rising energy costs, many homeowners are feeling the pinch in their pockets. The National Foundation for Credit Counseling reports that 'Government agencies define utilities above 6% of your income as a high energy burden.' However, it is not just the high energy costs that are the issue, but also the site's energy consumption that is driving up the bill. But there is hope—energy efficiency projects can provide relief from this financial strain. According to the American Council for an Energy-Efficient Economy (ACEEE), the average U.S. household spends about 3.1% of income on energy, while low-income households spend more than 8%, with some exceeding 16%.
To resolve high energy utilization, homeowners should look into home energy-retrofit projects that are cost-effective—meaning that the investment has a positive impact on the household budget. Take a look at the Forbes article in April titled, 'Our Energy Bills Are High, And This Is Why,' to learn about the 'why' behind high energy bills.
After an energy audit, the building science practitioner should review the report with the homeowner. The report should capture all diagnostic testing and show where the customer should start investing. The energy-modeling software report should provide detailed information to empower customers to make informed decisions. The solutions often come with cost-benefit metrics such as 'Simple Payback,' 'Savings-to-Investment Ratio (SIR),' and 'Return on Investment (ROI),' all of which can give homeowners a sense of control over their energy usage and costs.
Simple payback is a financial metric that calculates how quickly an investment is recovered. This may be important to some people, as money has more value today than it will in the future due to inflation. This concept is known as the 'Time Value of Money.' For commercial projects, the ideal goal is for a project to pay for itself within five years. In the residential sector, projects are considered fair if they pay for themselves within 10 years or less.
Example: Retrofit costs $1,000 and saves $100 per year.
Payback = (1,000/100) = 10 years
The SIR metric indicates that a project will pay for itself. To calculate the SIR, divide a project's savings by its initial investment. The SIR considers the life cycle cost of the retrofit project. An SIR of 1 means that the project will pay for itself in its useful life. The higher the number, the more the project will pay for itself. SIR may not matter to some customers, as comfort may be what they value. For example, in the Midwest region of the country with short summers, an air conditioner, even if considered high efficiency, will not run long enough to offset its initial investment. Despite this, customers still want to be comfortable and will purchase the system anyway.
$30,000.00 (existing system) - $20,000.00 (cost of the new system) = $10,000.00 (savings)
$10,000.00 (savings) ÷ $5,000.00 (initial cost) = 2 SIR
2 SIR means the retrofit will pay for itself twice during its life cycle.
The Annual Return is the interest rate your money earns on your retrofit project. It is similar to returns in a 401(k) or investment account. The Annual Return is the reciprocal of the SIR. To calculate the Annual Return, take the annual savings of a project and divide it by the initial investment of the project.
Example: Retrofit costs $1,000 and saves $100 per year.
Annual Return = (100/1,000) = 10%
The energy savings from the project can often cover the financing payments, making the retrofit budget-neutral.
In conclusion, energy-efficiency retrofit projects are not just practical—they are essential. They empower homeowners to lower utility costs, increase comfort, and invest wisely in their property's future. With supportive data, financing options, and a clear return on investment, the case is clear: energy efficiency is a smart financial move and a step toward a more sustainable, affordable lifestyle.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
15 minutes ago
- Yahoo
We're about to find out who's really paying for tariffs
Earnings season gets going in earnest this week, giving investors a fuller picture of how tariffs are impacting the bottom line—and specifically how much of the cost is being eaten by companies and how much is being passed on to consumers. So far, tariffs have yet to fuel a surge in inflation, but their effects are expected to show up more later this year. Earnings for the second quarter will heat up this week, with more at stake than usual as they represent a fuller picture on how tariffs are actually affecting businesses and consumers. The top U.S. banks will report, starting with JPMorgan Chase, Citigroup and Wells Fargo on Tuesday. In the tech sector, streaming leader Netflix and chip giant TSMC report on Thursday. Among industrials, results from Alcoa, GE Aerospace, and 3M are also due this week. The consensus estimate on Wall Street is that earnings from S&P 500 companies grew just 4% in the second quarter from a year ago, the slowest pace since 2023 and down from first-quarter growth of 13%. That comes as President Donald Trump's trade war has yet to fuel a big inflation inflation spike, though tariffs are expected to show up more in economic data later this year. The consumer price index will come out on Tuesday, and analysts expect a 0.3% monthly increase for June, up from May's 0.1% pace. The producer price index is due on Wednesday, and is also expected to show acceleration to 0.2% from 0.1%. The uptick could be a due to companies running out of inventories that were stockpiled ahead of the tariffs, forcing them to incorporate more of those costs in the price of their goods. Capital Economics said last week that Wall Street doesn't see Corporate America shouldering much of the future tariff burden, and exporters don't appear to be cutting their prices aggressively to offset the tariffs. A survey published last week by KPMG found more than 80% of companies plan to hike prices in the next six months, and 73% said they have already passed on up to half of tariff-related costs to consumers. But that was still not enough to preserve earnings, as 57% of firms said their gross margins are falling. Meanwhile, economists at Goldman Sachs expect companies will pass on 70% of tariff costs to consumers via higher prices, according to a note earlier this month. If that pans out, it would be a heavier blow than some earlier forecasts. Chris Harvey, Wells Fargo Securities' head of equity strategy, said if tariffs settle around 10%, then a third of the cost could be eaten by the importer, a third by companies, and a third by consumers. 'That's not a big impact,' he told CNBC on May 30. That 10% target looks increasingly optimistic, as Trump has continued to push for aggressive rates. Goldman Sachs expects the effective rate to eventually settle around 17%. But companies that pass on tariff costs also risk a backlash. The KPMG survey said 34% of companies said customer pushback is a challenge, and 45% said sales are already beginning to dip. And there's one consumer in particular that companies need to avoid annoying: Trump. In May, he warned Walmart not to hike prices after the retail giant said on an earnings call that prices could go up on a wide array of products. 'Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain,' Trump posted on Truth Social. 'Walmart made BILLIONS OF DOLLARS last year, far more than expected. Between Walmart and China they should, as is said, 'EAT THE TARIFFS,' and not charge valued customers ANYTHING. I'll be watching, and so will your customers!!!' Capital Economics said last week it suspects U.S. firms will eat more costs, 'if only in the short run for political reasons.' Either way, the upcoming earnings reports will reveal more definitively who is eating how much. More pain on the consumer side could fuel inflation and prevent the Federal Reserve from lowering rates, weighing on the stock market. More pain on the corporate side will erode earnings—and also weigh on the stock market. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17 minutes ago
- Yahoo
Pentagon to start using Grok as part of a $200 million deal with Musk's xAI
The Pentagon has signed on to use Grok, the AI chatbot built by Elon Musk's company xAI, as part of a new $200 million agreement that opens the door for its deployment across the federal government, the company announced Monday. The announcement comes amid Musk's public breakup with President Trump and days after Grok generated antisemitic responses and praised Adolf Hitler. The rollout is part of "Grok for Government," a newly launched suite of tools designed for use by federal agencies, local governments, and national security operations. xAI said its products, including its latest Grok 4 model, will now be available for purchase through the General Services Administration (GSA), allowing any federal office to adopt the technology. The move aligns with the Trump administration's push for more aggressive adoption of artificial intelligence across the government. Since taking office in January, Mr. Trump has championed AI as a pillar of national security and innovation. Musk himself briefly served in the Trump administration earlier this year, overseeing the White House's Department of Government Efficiency, or DOGE, before stepping down in May amid a public break with Mr. Trump over his sweeping tax and spending bill. Musk has since emerged as a sharp critic of that legislation, even floating the idea of launching a third political party. Despite the rift, xAI has continued to expand its government work. The new offering includes custom national security tools, AI-powered science and health applications, and cleared engineering support for classified environments. The announcement comes just days after Grok generated antisemitic responses to user prompts and referenced Hitler as part of what the company called an effort to make the model "less politically correct." Hours later, Musk wrote in a post on X that "Grok was too compliant to user prompts. Too eager to please and be manipulated, essentially. That is being addressed." The posts were later deleted and xAI said it "quickly" patched the issue. One day later, xAI launched an upgraded version of Grok it described as a major leap forward. Musk also announced that Grok would be used in Teslas. But the latest version was not without kinks, too: Grok checked with Musk's views before answering a question, according to The Associated Press. Grok was introduced in late 2023 as a more unfiltered alternative to other chatbots like ChatGPT, and is already integrated into Musk's social media platform X, formerly known as Twitter. "America is the world leader in AI," xAI said in Monday's post announcing the Pentagon deal. "We're excited to contribute back to the country that made xAI uniquely possible here." Sen. Lindsey Graham says "a turning point, regarding Russia's invasion of Ukraine, is coming" Trump pushes senators to make $9.4 trillion in spending cuts Student's unique talent that's for the birds
CNN
20 minutes ago
- CNN
Nvidia to resume H20 GPU chip sales to China, launches compliant model
Nvidia (NVDA) said it plans to resume sales of its H20 artificial intelligence chip to China, days after its CEO, who is visiting Beijing, met US President Donald Trump. Nvidia's AI chips have been a key focus of US export controls designed to keep the most advanced chips out of Chinese hands amid national security concerns, restrictions that the US-listed company said would cut its revenue by $15 billion. The world's most valuable firm is filing applications with the US government to resume sales to China of the H20 graphics processing unit (GPU), and expects to get the licenses soon, Nvidia said in a statement. 'The US government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon,' it said. Nvidia, which has criticized the export restrictions the Trump administration imposed in April that stopped it from selling its H20 chip in China, also said it has introduced a new model tailored to meet regulatory rules in the Chinese market. The White House did not immediately respond to a request for comment. The US government has expressed concern that the Chinese military could use AI chips to develop weapons. Nvidia CEO Jensen Huang is scheduled to hold a media briefing in Beijing on Wednesday when he attends a supply chain expo, his second visit to China after a trip in April where he stressed the importance of the Chinese market. 'The Chinese market is massive, dynamic, and highly innovative, and it's also home to many AI researchers. Therefore, it is indeed crucial for American companies to establish roots in the Chinese market,' Huang told Chinese state broadcaster CCTV on Tuesday. Nvidia has faced increased competition from Chinese tech giant Huawei and other makers of graphics processing units – the chips used to train artificial intelligence. But Chinese companies, including its big tech firms, still crave Nvidia chips due to the company's computing platform known as CUDA. Huang's visit is being closely watched in both China and the United States, where a bipartisan pair of senators last week sent a letter to the CEO asking him to abstain from meeting companies that are working with military or intelligence bodies. The senators also asked Huang to refrain from meeting with entities named on the United States' restricted export list. The move to resume sales of the H20 chips comes amid easing tensions between Washington and Beijing, with China relaxing controls on rare earth exports and the United States allowing chip design software services to resume in China. 'The uncertainties between the US and China remain high and despite a pause in H20's ban, Chinese companies will continue to diversify their options to better protect their supply chain integrity,' said He Hui, research director of semiconductors at Omdia. The H20 chip was developed specifically for the Chinese market after US export restrictions were imposed on national security grounds in late 2023. The AI chip was Nvidia's most powerful legally available product in China until it was effectively banned by Washington in April. The H20 ban forced Nvidia to write off $5.5 billion in inventories, and Huang told the Stratechery podcast earlier this year that the company also had to walk away from $15 billion in sales. Nvidia also announced the development of a new AI chip designed specifically for China, called the RTX Pro GPU. The company described the model as 'fully compliant' with US export controls and suitable for digital twin AI applications in sectors such as smart factories and logistics. In May, Reuters reported Nvidia was preparing to launch a new AI chip, based on the RTX Pro 6000D, in China at a significantly lower price point than the H20. The graphics processing unit would be part of Nvidia's latest generation Blackwell-architecture AI processors and was expected to be priced well below the H20 due to its weaker specifications and simpler manufacturing requirements, sources said. China generated $17 billion in revenue for Nvidia in the fiscal year ending January 26, accounting for 13% of the company's total sales, based on its latest annual report. Huang has consistently highlighted China as a critical market for Nvidia's growth.
