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Efficiency investments in home, appliances result in smart, tax-free savings

Jeff Barber, Housing and Environmental Design Specialist, Greene County, University of Missouri Extension,


In these rough economic times, finding a safe and productive place to invest money seems nearly impossible. However, research done at the Lawrence Berkley National Laboratory in 2001 showed that 10 common efficiency investments in a home and in appliances could result in a 16 percent average annual return. That is better than the Dow Jones Industrial Average high performance of 14 percent from 1990 to 1997.

By investing in the efficiency of your home and home appliances, you can realize returns that are safe, tax free, directly in your control and profitable.

All 10 of the energy efficiency measures in the study at Lawrence Berkley outperformed the traditionally safe investments of 30 year bonds (4.2 percent), money market accounts (3.5 percent), and the more unpredictable dividends on common stocks.
So, what are these 10 measures and how do they perform?

1. Changing lights to new fluorescent lamps and fixtures averages a return of 41 percent.


2. Sealing heating and cooling ducts averages a return of 41 percent.


3. Upgrading to Energy Star when replacing a clothes washer averages a 37 percent return.


4. Upgrading to an Energy Star programmable thermostat has an average return of 30 percent.


5. Installing an R-12 water heater insulation jacket averages a 28 percent return.


6. Upgrading to Energy Star when replacing a refrigerator averages a 37 percent return, assuming the old one is no longer used.


7. Upgrading to an Energy Star heat pump when replacing the furnace and air-conditioning system, averages a return of 19 percent.


8. Upgrading to Energy Star when replacing a dishwasher results in an average return of 18 percent.


9. Weatherizing and sealing the home to limit air changes to less than 0.5 per hour has an average return of 9 percent.


10. Increasing wall and attic insulation to 1997 Department of Energy recommended levels has an average return of eight percent, representing the highest cost of nearly $1,800.


The Lawrence Berkley study used 1997 costs. In the years since that study, fuel costs have increased and the cost of many of the energy efficiency technologies have dropped. That means a person can realize an even greater return on these investments now.

Other opportunities can be realized by taking energy efficiency tax credits and utility rebates.

The conclusion is very simple. An investment ranging from several hundred to several thousand dollars can have a very real return to you with a much lower risk than what exists in today’s market.

To find out more about this study or tools to help you save, search the Internet for “home energy savers” or go to



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Last update: Tuesday, January 19, 2010