What to Know About Energy Efficient Upgrades and ROI

Posted by Justin Havre on Wednesday, November 22nd, 2017 at 8:43am.

What to Know About Energy Efficient Upgrades and ROIUtility bills can cost the average Canadian homeowner as much as $2,234 every year. Homeowners may not only save money when adding energy efficient upgrades, but also boost a home's value in the eyes of the eco-friendly buyer.

In addition to other key home improvements, know more about which upgrades are available that improve energy efficiency and offer a high ROI.

What Do Buyers Want?

When homebuyers are looking for a new home, energy efficiency was the second most important attribute to potentially influence their decision to purchase, according to a National Association of Home Builders survey. Ever-increasing energy costs may be driving interest in such upgrades. It has been found that millennials are among the buyers interested in energy-efficient upgrades and talking with real estate agents about R-value of insulation and other specific details about energy efficient home improvements.

There are a number of upgrades of interest to homeowners and buyers. Homeowners may save as much as 7 to 15 per cent when choosing to upgrade windows to Energy Star certified windows. In the case of energy efficient windows, homeowners will recoup more of the cost the longer they live in a home. LED lighting may be another upgrade attractive to buyers and mentioned in listing of homes with “green” credentials. Energy efficient windows and doors are among the most popular renovations in homes across Canada.

Support from the Canadian Government

Residents of Alberta will be able to take advantage of rebates for energy efficient upgrades including insulation, windows and tankless hot water heaters. Up to $3,500 may be available in the form of rebates for select home improvement products. Heritage Hills homeowners, among others, need to select a contractor from a provided list and contractors will help homeowners apply for the rebate. Rebates are received after the completion of a project. The Home Efficiency Tool app provides homeowners with more information about the energy and financial savings which may result from upgrades to lighting, electronics and appliances. Products may also be suggested to a homeowner.

Canadian Permits May Be Necessary

Prior to performing an upgrade, it is important for homeowners to review state and municipality requirements. Appropriate permits may be necessary prior to upgrading a home. Otherwise, a homeowner may need to redo an upgrade. Information about permitting is available through the local home-builder's association and the Canada Mortgage and Housing Corporation.

Upgrades with High ROI

Energy efficient upgrades may have a return rate of 50 percent or more. According to one recent survey, 61 per cent was the average recovery rate of a homeowner's energy efficient upgrade. Respondents of the survey believed that the upgrades that provided a "significant" positive impact included:

  • High efficiency windows;
  • Insulation;
  • Heating system and heating system efficiency.

Not all energy-efficient upgrades offer a ROI but that does not mean that they may not serve to add to a homeowner's comfort. RENOVA participants did not see a measurable impact through the installation of efficient hot water heaters. However, this upgrade can save energy costs for homeowners as they reside in a home.

Considerations Influencing ROI

There are many factors that may influence recovery rate. The type of upgrade, the quality of the upgrade or renovation and how desirable an upgrade would be perceived to be in the local market are all considerations. Homeowners would do well to keep a home well-maintained as other issues may negate the value of an energy efficient upgrade.

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