Does it pay to replace an old but still working appliance with a new, more efficient model? Learn how to calculate the real costs over the life of the appliance.
Still faithfully chugging away, but sucking up enough power to light up a small town.
The furnace (or boiler), water heater and refrigerator are the biggest energy hogs in most homes. It may be hard to believe, but replacing your older but still functioning equipment and appliances with new Energy Star–qualified models can really save you big bucks. In some cases, it can cut your energy bills in half. That's because each of these items has two price tags: the initial cost of the equipment and the cost of operating that equipment over its 10- to 20-year lifetime.
This article will help you decide when it makes economic sense to replace these big-ticket energy guzzlers with new energy-efficient models. And we'll also give you a list of things to look for that can save you hundreds or even thousands of dollars when you do start shopping.
Federal, state and local rebate programs are often available that pay you back for purchasing energy-efficient appliances and equipment as well as for recycling your old equipment. Consult appliance dealers or look online for a list of available rebates.
You can save money by replacing an older refrigerator, even if it works.
Even after factoring in the cost, a new, efficient refrigerator is cheaper to operate than most 8-year-old models, even if they're working fine.
Your refrigerator consumes a whopping 13.7 percent of household energy. Refrigerator efficiency has really improved in the past few years, so if you haven't gotten a new fridge recently, replacing yours probably makes sense. If you have an older second fridge in your garage or basement, you'll save big by replacing it with a newer, more efficient model (or, of course, by getting rid of it!).
Will I save by replacing my
A new, efficient fridge will cost you anywhere from under $1000 to several thousand dollars depending on the size, style
and features you choose.
It may be time to retire an old heating system.
All major appliances come with stickers showing energy use.
In a cold climate, two-thirds of your energy budget is spent on heat. Cutting your heating energy use is the single most effective way to cut your utility bills. Replacing your furnace or boiler is expensive, but it may be the smartest tax-free investment you can make. The information here applies to propane, oil and natural gas systems.
Will I save by replacing
my furnace or boiler?
To see whether replacing your current heating equipment makes sense, the final step is to do a simple return on investment (ROI) calculation (see below). It may sound like a lot of work, but an hour of your time could save you thousands of dollars.
heating makes sense:
If you live in a cold climate where temperatures remain in subzero territory for a sustained period each winter, it makes sense to spring for a high-efficiency “condensing” furnace or boiler with an AFUE of 90 percent or higher. This will add substantially to the initial price of a furnace or boiler, but over the life span of that equipment (actually the payback period is within three to seven years), you'll recoup those costs and more through lower utility bills. Also, rebates and tax credits are available that will cover much of the initial cost difference.
Here are some things to keep in
Mind before you buy a furnace or boiler:
To see how much money you'll save each year with more efficient equipment, calculate your return on investment (ROI) using this formula:
ROI = first-year savings divided by the installed cost
(Find your first-year savings at energystar.gov) Remember, as fuel prices increase, so do your savings.
Even minimum-efficiency electric heating systems (and water heaters) are already 90 to 100 percent efficient, so upgrading to a new system probably won't save you much if you have an electric furnace or boiler, or electric baseboard units. The best way to save on electric heat is to make sure your home is properly insulated and sealed. Using off-peak electricity is another great way to save. Contact your power supplier to see if that's an option in your area. If so, you could cut heating costs by 40 percent or more by installing a backup heating system.
If you use electricity to heat your home and you live in a mild climate, consider an energy-efficient heat pump, which provides three times more heat than the equivalent amount of energy it consumes in electricity. During the heating season, the pump extracts heat from the outside air (air-source heat pump) or the ground (ground-source heat pump) and delivers it to the house. During the summer, the pump reverses the flow of refrigerant and functions like a conventional air conditioner. An efficient heat pump can trim your electricity costs by 30 to 40 percent. Consider replacing your heat pump if it's 10 or more years old. New heat pumps use a fraction of the energy used by older models.
Also, have your installer check the refrigerant levels in your heat pump. Studies show that up to 75 percent of installed cooling equipment may have incorrect refrigerant levels, which reduces energy efficiency and increases the chance that your heat pump components will fail prematurely.
For readers in cold climates, a “dualfuel” heat pump might be an option.
Go to energystar.gov for more information on heat pumps.
High-efficiency water heaters save a substantial amount of money compared to an older, conventional water heater.
Your natural gas or propane water heater uses about 17 percent of the energy in your home and is notoriously inefficient. Even a brand-new, mid-priced conventional tank-style water heater is only 57 to 59 percent efficient because it loses heat through the flue and through the walls of the storage tank. Older water heaters are even worse, wasting more than half the heat. So upgrading your old gas or propane water heater to a high-efficiency model can save big bucks. Electric water heaters are also serious energy guzzlers, but as with electric heat systems, upgrading to a newer electric model probably won't cut your utility bills by much.
Will I save by replacing my
gas or propane water heater?
—If it's 10 years old or older, yes. Gas models manufactured before 1998 typically operate at less than 50 percent efficiency.
—If it's 5 years old or less, no. Replacement only makes sense if your system needs serious repair.
—If it's between 5 and 10 years old, maybe. Water heaters last an average of 10 to 15 years. If yours is getting older, it's worth replacing it now before it fails. Check online for the efficiency ratings of different makes and models, and use the ROI calculation to see if replacement makes sense.
A new tank-style water heater may
cost up to several thousand dollars (installed) depending on
the model and installation requirements
(a power-vented unit that
exhausts gases directly outside
is more expensive).
When you're shopping for a tank-style