## insulation, estimating the payback period of additionalUse the equation below to estimate the cost effectiveness of adding insulation in terms of the "years to payback" for savings in heating costs. Years to payback is the time required for the insulation to save enough fuel from heating (at present prices) to pay for itself. A simple payback is the initial investment divided by annual savings after taxes. The equation works only for uniform sections of the home. For example, you can estimate years to payback for a wall or several walls that have the same R-values, if you add the same amount of insulation everywhere. Ceilings, walls, or sections of walls with different R-values must be figured separately. Subtract the areas of windows and doors when estimating payback for wall insulation. The cost of the energy source is also a key factor in determining payback. Energy prices vary widely from region to region and season to season. Other factors, such as the rate of production and inventories of fuels nationwide, can also affect local energy prices. The weather from year to year also varies, so your energy costs from year to year will vary as well. To figure the cost of energy, consult your local utility for a rate schedule, or save your energy bills and plug your specific costs into this formula: Years to Payback = (C(i) × R(1) × R(2) × E) ÷ (C(e) × [R(2) - R(1)] × HDD × 24) To calculate the payback, you must supply the following information: C(i) = C(e) = -
To calculate the cost of energy, divide the actual price you pay per gallon of oil, kilowatt-hour (kWh) of electricity, gallon of propane, or therm (or per one hundred cubic feet [ccf]) of natural gas by the BTU content per unit of fuel. -
To figure the price you pay per unit, take the total amount of your bills (for oil, electricity, propane, or natural gas) during the heating season, and divide it by the total number of gallons, kWh, or therms you consumed during those months. Use the following values for fuel Btu content: - #2 Fuel Oil = 140,000 BTU/gallon
- Electricity = 3,413 BTU/kWh
- Propane = 91,600 BTU/gallon
- Natural Gas = 103,000 BTU/ccf
- or 100,000 BTU/therm
E = R(1) = ## ExampleSuppose that you want to know how many years it will take to recover the cost of installing additional insulation in your attic. You are planning to increase the level of insulation from R-19 (6-inch fiberglass batts with moisture barrier on the warm side) to R-30 by adding R-11 (3.5-inch unfaced fiberglass batts). You have a gas furnace with an AFUE of 0.88. You also pay $0.87/therm for natural gas. Let's also suppose that you supply the following values for the variables in the formula. C(i) = $0.18/square foot By plugging the numbers into the formula, you obtain the years to payback: Years to Payback = (C(i) × R(1) × R(2) × E) ÷ (C(e) × [R(2) - R(1)] × HDD × 24) Years to Payback = (0.18 × 19 × 30 × 0.88) ÷ ($0.0000087 × 11 × 7000 × 24) 90.288 ÷ 16.077 = 5.62 years ## Related categories• INSULATION TOPICS | |||||

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