Abstract
Residential energy-efficiency measures, besides energy savings, provide opportunities for improvement of thermal comfort, air quality, lighting quality, and operation. However, all these benefits sometimes are not enough to convince a homeowner to pay the incremental cost associated with the energy-efficiency measure. The objective of this work is to develop a methodology for the economic evaluation of residential energy-efficiency measures that can simplify the economic analysis for the homeowner while taking into consideration all factors associated with the purchase, ownership, and selling of the house with the energy-efficiency measure. The methodology accounts for direct and indirect economic parameters associated to an energy-efficiency measure; direct parameters such as the mortgage interest and fuel price escalation rate, and indirect parameters such as savings account interest and marginal income tax rate. The methodology also considers different cases based on the service life of the energy-efficiency measure and loss of efficiency through a derating factor. To estimate the market value, the methodology uses the future energy cost savings instead of the cost of the EEM. Results from the methodology offer to homeowner annual net savings and net assets. The annual net savings gives the homeowner a measure of the annual positive cash flow that can be obtained from an energy-efficiency project; but more important, the net assets offer a measure of the added net wealth. To simplify and increase the use of the methodology by homeowners, the methodology has been implemented in an Excel tool that can be downloaded from the TxAIRE’s website.
Highlights
According to the U.S Energy Information Administration, the residential sector, with 23% of the total energy consumption in the United States, compares significantly with the energy consumption of the other sectors: commercial (19%), industrial (31%), and transportation (28%) [1]
The objective of this work is to develop a methodology for the economic evaluation of residential energy-efficiency measures that can simplify the economic analysis for the homeowner while taking into consideration all factors associated with the purchase, ownership, and selling of the house with the energy-efficiency measure
The annual net savings gives the homeowner a measure of the annual positive cash flow that can be obtained from an energy-efficiency project; but more important, the net assets offer a measure of the added net wealth
Summary
According to the U.S Energy Information Administration, the residential sector, with 23% of the total energy consumption in the United States, compares significantly with the energy consumption of the other sectors: commercial (19%), industrial (31%), and transportation (28%) [1]. The variables can be grouped into four categories: users, equipment, construction material, and weather. The study of how the variables in each of the categories affect the energy consumption offers the opportunity to decrease energy use without affecting the activities of the occupants and their thermal comfort. Users/occupants will be willing to adjust their energy use patterns when the benefits are tangible. Technical matters can be improved, the economic aspect is always a major factor for decision making. Residential energy efficiency projects should be treated as a financial investment and the attractiveness of a project depends upon the return expected by the owner or investor. An appropriate economic analysis is a key factor to show the actual potential benefits of the investment which can be highlighted when environmental benefits are illustrated
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