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NC State Extension

Total Annual Savings and Total Cost – Defined

Energy savings occurring in a single year from the energy efficiency measures implemented in that year and from measures installed in prior years that are continuing to provide benefits.

Figuring out the TOTAL SAVINGS and TOTAL COST of a project:

Example 1:  Air Sealing Duct Work – If an air-sealing project is determined to cost you $100 to complete as a DIY and is estimated to save you $10/month in energy savings, you will have paid for the project in 10 months and will continue to save $10/month into the future.

  • Initial Cost                                     $100
  • Months to recover cost                  10
  • Annual savings                              $120/yr
  • Amount saved after 1 year             $20       (Savings – Cost)
  • Amount saved after 5 years           $500     (Savings – Cost)
  • Amount saved after 10 years     $1,100   (Savings – Cost)


Example 2:  Installing 20 Energy Star CFL light bulbs in place of incandescent 2413959991_5aab615906-1bulbs – The bulbs will cost about $56 and will save approximately 83%. Each year you will save approximately 1,358 kWh of electricity and $153. Over the life of the light bulbs you will save approximately $954 in electricity costs and $48 in equipment replacement costs. By choosing ENERGY STAR you will reduce emissions by approximately 2,091 pounds of carbon dioxide annually, which is equivalent to the emissions reduction of not driving your car for 72 days.

  • Initial Cost                                                             $ 56
  • Months to recover cost                                          4
  • Annual Savings                                                     $ 153
  • Amount saved after 1 year                                     $ 97     (Savings – Cost)
  • Amount saved after 5 years                                   $ 612   (Savings – Cost)
  • Equipment Life Cycle                                            7.3 years
  • Life Cycle Savings in electricity                                          $ 954
  • Life Cycle Savings in equipment replacement costs          $ 48
  • Total Savings over lifetime of bulbs                        $ 1,002

Additional questions to ask yourself when setting priorities for projects:

  • Which of these projects will add the most value to my home?
  • How long do I plan to own my home?
  • I am a renter. What projects make sense for me? (See Resources for Renters)
  • I have identified some comfort issues in my home such as drafts. Which of these projects will most effectively add to the comfort of my home?