How much energy should you throw into your home's energy efficiency?
Home energy audits help you pinpoint cost and energy-effective renovations
The average cost of a home energy audit is $400
The Department of Energy states that homeowners can lower utility bills by 30% by updating appliances and home systems
The Inflation Reduction Act of 2022 offers tax incentives for audit and upgrades
Energy-efficient upgrades are all the rage these days, and for good reason. The U.S. Department of Energy (DOE) predicts that a home energy audit can help you slash between five and 30% off your utility bills. But, with the cost of a home energy audit averaging $400, is a home energy assessment worth it?
A home energy audit—also known as a home energy assessment—is a thorough investigation into how your home uses and loses energy. The energy used to cool and heat our homes can escape if there are leaks in our walls, eaves, insulation, attics, or basements. Older appliances and outdated wiring can also waste electricity.
A local home energy auditor will:
Analyze past utility bills
Walk through and around your home for potential leakages
Perform a door blower test to measure lost airflow
Take thermal images to detect air leakage
Inspect the R-value of the insulation
Inspect ductwork for potential leaks
Check attic and basement ventilation systems
Inspect for signs of water damage or excess moisture
Test combustion appliances
Note electrical hazards
The auditor will then present a report outlining how you can upgrade your home to save money and lower your carbon footprint. There are pros and cons to the energy audit. For one, the $400 does not pay for the changes themselves. On the other hand, without professional analysis, you could either overlook important renovations or make costly changes that weren't called for in the first place.
Hiring a professional for an energy audit is the key to unveiling which renovations are worth the investment and which are better completed down the line. Without the pro's intricate data, you're left second-guessing or missing cost-saving changes. So, which tasks are worth the cost, and which ones even offset the cost of the audit itself?
| Project | Potential Average Annual Savings |
|---|---|
| Appliance upgrade | $50 – $450 |
| HVAC upgrade | $200 – $500 |
| New windows and doors | $3,000 – $6,000 |
| New insulation | $126 – $180 |
| Updated electrical | Varies |
*Table reflects an average 1,500 square foot house. Savings may vary depending on location, home size, and quality of materials used.
Your home energy auditor will analyze whether your current appliances—particularly gas-powered appliances—are racking up your energy bill. Energy-efficient models verified by the Energy Star program often come with rebates and the promise of lower bills.
The DOE's Energy Appliance program notes that approved refrigerators, freezers, dishwashers, washers, and dryers are between 10 and 50% more efficient than traditional models. The DOE also specifies that a household of Energy Star appliances can save up to $450 a year on utility bills or an average of $50 an appliance, depending on the model.
It depends. Buying new appliances is a large investment. Major appliances still cost anywhere from $350 to $8,000, and efficient models tend to cost a bit more. However, saving up to $4,500 over 10 years can offset the cost if you're preparing to replace them either way.
One of the most impactful upgrades you can make to your home based on your energy audit is your heating and cooling system. Now, much like new appliances, HVAC replacement costs cover many types of systems and range anywhere from $5,000 and $12,500 on average.
Energy.gov notes that you will save between $394 and $1,925 over the lifetime of using an Energy Star air conditioner. Include a heat pump in your plans, and you could save an impressive $500 a year or up to 50% on your heating bills.
When paired with the recommended changes, such as new insulation and window sealing, upgrading your HVAC system will surpass the cost of installation over the course of its lifetime. However, the price is likely only worth it if your current system is on its way out.
The DOE notes that between 25% and 30% of energy loss can be attributed to heat and cool air loss through doors and windows.
Properly installed windows and doors do more than keep out cold drafts. Specialized low e-glass, double-paned windows, and insulated exterior doors can all lower your energy bills in the extreme months. Models may also include:
Enhanced sealing
Reflective glass
Insulating gas layers
Enhanced weatherstripping
Foam core insulation
If your current windows and doors do not pass your audit energy inspection, the cost of window replacement averages $280, while door installation prices average $1,100. Take a look at predicted utility bill savings to determine whether this is worth it over time for your home.
Energy.gov also notes that you can save between $2 and $4 per square foot on Energy Star doors, windows, and skylights. In other words, if the models are priced higher than this for less-efficient models, it may not be worth the savings in comparison to traditional models.
Replacing your home's insulation is a big decision. While the longevity of most insulation materials ranges between 30 and 100 years, materials older than 10 years may not meet current efficient standards. A home energy expert can identify the type, age, and efficiency of your current insulation and catch gaps with infrared testing.
Properly insulating your home will lower energy bills, but the amount depends on where you live. The Energy Star website breaks it down, noting up to 20% utility reduction for those living in the north of the country and up to 14% for those living in the south. And since Energy Star notes that the average heating and cooling bill averages $900 per year, this means you can potentially save $126 to $180 annually. Insulating a home costs an average of $1,800, so the decision comes down to your home design and where you live.
Home energy auditors will review your home's wiring for both power usage and safety. Knob and tube wiring in older homes, for example, can pose a threat when not properly maintained. You can also run into issues when using non-GFCI outlets for major appliances or using an incorrectly sized electrical panel.
The cost of rewiring a home is a major investment—about $10,000 on average. However, smaller projects such as replacing switches, adding outlets, and upgrading panels cost just an average of $1,500.
Improper wiring is always worth the cost if it poses a danger to your home. Even if the cost savings from your utility bill will vary—depending on what you plug in—damage from the threat of fire is invaluable.
In addition to all the energy bill savings over time, existing and new tax incentives can significantly lower upfront costs. For example, the Inflation Reduction Act of 2022 encourages homeowners to make energy-efficient upgrades to their homes. Here are just a few perks:
$150 tax credit for the cost of a home energy audit
$500 tax credit toward new energy-efficient doors
$600 tax credit toward new energy-efficient windows and skylights
In total, up to $2,000 or 30% tax credit toward energy-saving systems such as heat pumps and biomass stoves
Up to $5,000 toward new construction
30% of solar installation costs
Homeowners can save money with the Inflation Reduction Act through a variety of household electrification incentives including tax credits and rebates. Additionally, low-to-middle-income households may qualify for the High-Efficiency Electric Home Rebate Act (HEEHRA) rebate. Depending on household earnings, you could file for a 10-year tax rebate of up to $14,000 off electric home appliances and systems.
On August 4, 2023, the IRS issued a notice stating that starting in 2024, a home energy auditor must be on the DOE’s list of certified auditors in order for taxpayers to qualify for the Inflation Reduction Act’s Energy Efficient Home Improvement Credit. In that case, the amount of available auditors may decrease significantly after 2023.
