The Diminishing Returns of Going after Efficiency

[pcooley]

We recently had our forced air furnace, (the old one was 44 years old), replaced, and are in the process of having the water heater replaced. It was all part of a low interest, energy-efficiency loan we got. The water heater was a long story. The short version is, I was expecting a very high efficiency water heater, and the contractor brought me one that was not even energy star, as stated in the contract. I blew up, and in the process ordered a 90% efficient AO Smith that they're installing tomorrow. (God, I hope it fits in the utility closet. It's going to be a tight squeeze).

The one they put in is estimated to cost $309 to operate, and the one I purchased for $1660 is estimated to cost $102 to operate. Theoretically, it will pay for itself within ten years.

Here's the thing though. I was looking at my "year-to-date" utility costs, and my electricity was just over $180 so far this year, and gas was just around $350 for the year, even with our ancient furnace and older energy star water heater. We've just barely cracked $500 for the year on our utilities.

How much of an improvement are we going to see with this 95% efficient furnace and 90% efficient water heater? I'm also dutifully replacing our compact fluorescents with the new LED lightbulbs.

From a frugality standpoint, I feel like I'm hitting the point of diminishing returns. Is this roughly $9000 in borrowed money to insulate our floors in the crawl space, replace our water heater and furnace, and insulate the heating ducts really going to positively impact our finances? (I am hoping to pay the loan in two years rather than fifteen).

From an environmental standpoint, I still feel better about it. But sometimes I just have to wonder if I'm doing the right overall thing, or just making myself feel better without really changing my impact on the planet. Are my kids getting the right lesson from all this?

I hope so.

[pcooley]

I do have to add that we needed to replace that heater. It worried me. It's getting down to zero degrees tonight, and I'm glad I'll be able to hear the heater cut on without worrying that it's spewing carbon monoxide into the house. (I did have CO detectors in the kids' rooms). Of course, part of the reason our bill was so low was I didn't like to turn the thermostat up very high, (55 at night and the daytime and 62 in the morning and evening), because the integrity of the furnace worried me.

The water heater and the insulation were sort of afterthoughts, though the heater seemed to be silting up and was only good for one five minute shower at a time.

[loosechickens]

There are other "paybacks" than just financial ones. Knowing your family is safe from carbon monoxide is certainly a good one. Knowing that you are reducing the amount of energy used, so assisting in reducing impact on the planet, counts for a good deal as well.

There is a point of dimishing returns, for sure, but hopefully, especially if you can pay the loan back quickly, and feel your family is safer, etc. it will prove to be a good decision long term.

[ctg492]

An appliance I am disappointed with is the HE Washer. Suppose to be better, save water and energy. I actually bought one that lasted a year, yes one year. My fault I did not buy a warranty. The repair man said Sometimes you get a lemon. SO I bought a Kenmore HE and the yearly maintenance warranty. This washer uses very little water. Honestly, so little the flour on my son's work clothes does not come out. I take the sheets out and they have actual dry spots where water did not hit them. The idea is less dry time, but come on. When the repair man came out to work on the oven I asked about the problems with the HE washer. He said Oh yes that is a down fall of them.
I am not a add all kinds of detergents and such type person. Yesterday I broke down and bought Oxi clean and a different detergent to try.

[lhamo]

Sorry this has been a stressful process for you, Paul. I agree that it sounds like the furnace really needed to be replaced -- whether or not the high efficiency model will pay off in terms of savings is an open question, but given your general low usage pattern it is probably going to take awhile. I think the more important lesson to learn from this (especially the water heater part of the story) may be that if you have certain standards you need to do the research in advance and decide what the appropriate price range and model will be that fits both your needs and your budget, and be very specific when drawing up the contract. This sounds a bit scammy on the part of the contractor. Did they recommend the A.O. Smith? Because if they did, then it means their "error" of bringing the non-energy star heater probably got them a nice commission on the model that costs 5x more. YOu probably could have gotten a much cheaper energy star rated model that was not quite as efficient but still would have done the job and met your desire to have less impact.

That being said, we got an A.O. Smith for my inlaws apartment and it is still going strong nearly 10 years later. My sister recently replaced her water heater and the guy said you can extend the life by draining it once a year to keep the sediment from building up so much.

lhamo

[razz]

I can so understand. I just replaced the 4 'fat albert' incandescents in our main bathroom with CFL's which cost $20 inc 13% tax even with a $3 coupon discount and sale price, ie., I went from 100 watts to 36 watts in usage for $20. How long will we have to use them to get the $20 back? They are a lot brighter and I can see all the cobwebs much more clearly. :-)

We went through this decision-making with our energy star air-to-air heat pump puchase. $8,000 and we still use wood to heat the house in cold weather. The heat pump worked during the fall cool temps with no increase in our bill. AC effect was no increase in electric usage charges in the really hot weather with the temp set at 78 degrees but the house was comfortable and drier which DH required. When the temps drop to the teens/twenties below freezing, we do need a backup heat sourceat night so the electric furnace will kick in but the energy efficient blower etc., will reduce the cost so we were told and so the info material advises.

Have to say that I am impressed with your utility bills. We spend about $100/mth on our all-electric house.

[pcooley]

I did the research after the inefficient heater was installed and chose and ordered the AO Smith myself. That's the brand we had in the house when we bought it, and it seemed to work well, and they're pioneering the condensing style of hot water heater. It's supposed to be more energy efficient than tankless water heaters and doesn't have the difficulty of becoming blocked with mineral deposits the way the tankless ones do. I also found the best price and ordered it myself. I'm a little nervous about the plumber installing a type of water heater he hasn't seen before, but they read directions -- right?

[Gardenarian]

Did the water heater fit?

Honestly, $500 in utilities is very minimal. I have family in New England who pay $1000 per MONTH just for oil. I would weigh these changes very carefully. What I often find is the greenest appliance (or lightbulb, mattress, table) is the one you've already got. (Once you figure in the energy used for manufacturing the new thing, wrapping it up, shipping it to the store, shopping for it, shipping it home, installing it, recycling the old one...)

[Gregg]

There are environmental costs that calculate out in roughly the same way is the financials. The environment could actually be better off with us burning more fuel to keep warm as opposed to adding in the impact of manufacturing new insulation, better windows, efficient furnaces, etc. Not meaning to be negative, but if we really look at the full impact of our choices I think we would often find there's not as big a difference as we'd hoped for. Where we, as a society, can have the biggest impact for the least effort is in new buildings. There is no reason to not place them on a site with full consideration of solar orientation. Passive solar works and its basically free. I provides heat in the winter and full spectrum lighting. Those are two huge categories of energy use in buildings and we can get a large part of them at no cost just by placing windows correctly. If you want absolutely the biggest bang for the energy dollar buck go wash your south facing windows in the winter.

[Spartana]

Honestly, $500 in utilities is very minimal. I have family in New England who pay $1000 per MONTH just for oil.

Main reason I changed my mind about moving to Maine - utilities and property taxes!

I averaged less than $100/month for ALL my utilities (gas, electric, water, trash - the electic bill itself was under $15/month normally) in a 1500 sf house in SoCal. So upgrading to expensive but more energy efficent systems would have been wasted on me cost-wise. However, if my bills were higher or I had safety issues, I would definetly upgrade. But if everything worked fine, even if it wasn't the most energy efficent, I would choose to just reduce my usage as much as I could to keep costs down before up grading. I feel the same way about vehicles too - will keep my gas guzzling V-6 truck until it dies, but will use it MUCH less, rather then buy a new hybrid when my truck is perfectly fine. There are heavy environmental costs to manufacture anything, as well as the personal cost to buy new, so weighing all those things are important when deciding what to do. Of course if my truck was unsafe then I would replace it with something more energy efficent - but not an expensive Hybrid, but an inexpensive compact car that still gets great gas mileage but costs half the price of a hybrid.