Home Energy Efficiency: Viewing the Home as an Investment

Written by: Bobby Veit on Sep 5th 2013

Brian Kaminer of Sustainable North Castle discusses how viewing your home as an investment opportunity might be better for your wallet than traditional investment options:


Brian Kaminer approached his home’s energy efficiency upgrade with an eye on the financial value of the investment. In this video he discusses how to have an energy assessment completed; the value and cost of an assessment; the importance of payback analysis in investment decision-making; the cost-reducing benefits of out-of-pocket financing; and how home energy efficiency investments compare to typical stock and bond investments.

The How and Why of Home Energy Assessments

To understand the importance of home energy improvements, a key step is to learn about the many opportunities available to save money at home. The best way to do this is to have a BPI-certified contractor conduct an energy assessment in your home. To find the best local contractors (who have been peer-reviewed), Brian chose one approved by Energize NY. For many New York residents, the assessments subsidized based on income. But even if it's not, the information provided through the assessment is valuable enough to justify payment of the upfront cost. Consider it a form of research in your decision-making process. The assessment allows you to evaluate your choices, decide what works, and follow through with your best options. This includes a financial analysis of the costs and returns expected from energy efficiency upgrades.

Payback Analysis and Choosing Your Upgrades

A payback analysis illustrates how long it will take you to recoup the initial costs from your upgrades to start saving money. On your report, you will likely receive a range of options to choose from, each with their own payback time. Some upgrades recover their initial costs quickly while others might take 10 years or more. For his own home, Brian decided to pursue a variety of upgrades with an average payback period of 7 years, a return of about 13% a year. With a $10,000 investment creating returns of 10% a year, you would recoup your costs in 10 years, after which any additional money saved would go directly into your pocket.

Out-of-Pocket Financing

Financing options are available, but because of interest payments on the loans, these options extend the payback period from the improvements. When comparing efficiency to other investment options, this is an important consideration to keep in mind. Home energy efficiency upgrades become an even more viable option should you have the opportunity to pay cash. Using cash eliminates interest payments, ensuring that you realize the returns from your investment as quickly as possible.

Viewing your Home as an Investment

Banks provide for assured and safe investments, but low interest rates limit yields, and when Brian initially had his assessment several years ago, the stock market was too volatile for reliable investment. Even producing historical returns, investments in the market did not match what he expected to make from an investment in his home. Brian viewed his efficiency investment not only a means for financial benefit but also as in investment in the quality of life for his family. Moreover, the investment also incorporated some of his growing values regarding sustainability and the environment. But for many, including Brian, the financial outcome is the largest incentive for investing in home energy efficiency.

To see if you qualify for a free or subsidized NYSERDA home energy assessment click on the ‘Sign Up’ button on the home page www.EnergizeNY.org. After answering a few simple questions you will be taken to an eligibility calculator.

Brian Kaminer is the Co-Chair of Sustainable North Castle, and the founder of Talgra, that consults with people looking to align their money and values through, sustainable, community and impact investments. He recently released a Money and Impact Investing Directory. Brian is also a co-chair of Slow Money NYC and NYC LION (a Slow Money investor group). Brian has consulted on award winning energy conservation projects.

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