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(ARA) - With more Americans downsizing their household budgets, larger-scale renovation projects are out and frugal remodeling is in. And when it comes to saving money, experts say home improvement projects that increase energy efficiency are among the best investments to deliver paybacks -- now and in the future.
The average return on investment for midrange home improvement projects focused on aesthetic appeal, such as kitchen or bathroom remodels, is down since 2007, according to "Remodeling" magazine.
"Energy efficiency upgrades provide homeowners with the rare opportunity to see a return on their investment almost immediately and at resale," says Kateri Callahan, president of the Alliance to Save Energy, a Washington, D.C.-based non-profit dedicated to promoting energy efficiency. "We can't always predict how the market will impact home prices over the long term, but all homeowners can improve their home's energy efficiency to increase its value."
Heating and cooling can account for nearly half of a home's energy bill, according to the Alliance to Save Energy, and with temperatures dropping, it's the right time for homeowners to focus on ways they can trim costs and energy consumption.
"The reality of the new economy is that homeowners want to save money while maintaining the value and comfort of their homes," says Mike Lawrence, vice president and general manager of Insulation Systems for Johns Manville, a manufacturer of building products. "There are economical and smart steps homeowners can take that will positively impact their monthly energy bills today and their home's value tomorrow."
Homeowners can tackle projects that are low in cost and high in value and return on investment, either as do-it-yourself projects or by hiring a professional contractor.
To get started, homeowners should first estimate the current performance of their home by using an online energy efficiency assessment tool, such as the Home Energy Analysis test available at JMHomeowner.com. Online assessments help gauge the savings that could be realized by making efficiency upgrades.
"After evaluating their home, most homeowners will find that adding insulation to their attic is a smart and cost-effective first step, since most homes are under-insulated," Lawrence says. "When adding insulation, homeowners should also consider weatherizing their attic to help eliminate any holes or gaps that may exist in the floor or walls. By using caulk, spray foam or weather stripping to close such gaps, homeowners can further decrease wasted energy."
A programmable thermostat is another cost-effective option that helps boost home energy efficiency. Programmable thermostats let homeowners regulate the temperature of their home to deliver savings without sacrificing comfort. According to the Environmental Protection Agency, homeowners can save about $180 a year by properly setting their programmable thermostats and maintaining those settings.
A triple return on your remodeling investment
Compared to other home improvement projects, energy efficiency upgrades typically come with a considerably smaller price tag, compared to aesthetic-focused renovations like kitchen and bathroom remodels. In addition, there's a triple return on these remodeling investments over the course of home ownership:
* Save on your energy bill today: According to the U.S. Department of Energy (DOE), with a properly air sealed and insulated home, homeowners can reduce their heating and cooling costs by as much as 30 percent. The average U.S. home needs 19 inches of attic insulation for maximum energy efficiency.
* Save up to $1,500 with a tax credit: Through 2010, insulation purchases qualify for a 30 percent federal tax credit for energy-efficiency improvements, which reimburses homeowners up to $1,500 for the cost of materials. Additional incentives from adding insulation or making other energy efficiency improvements may be available from state and local governments and utilities.
* Save for the long term: Investments made in home energy efficiency pay dividends for the lifetime of a home and improve the home's resale value. According to the Appraisal Institute, for every dollar saved in annual utility costs, homeowners can expect to add $20 to their home's market value.
For more information on energy efficient home improvement projects and to take advantage of local incentives, visit www.jmhomeowner.com/insulation/energytaxcredit.asp.
Courtesy of ARAcontent
