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70s House Eco Renovation

Revised Energy Audit ROI Calculations

Intro by Kenneth Barbalace
ROI Calculations by: Erik North, Free Energy Maine, LLC

As part of the application process for a Maine State Housing Authority HELP (Home Energy Loan Program) loan we had an energy audit conducted on our home. This audit contained a prioritized list of home weatherization and energy efficiency projects we could undertake to reduce our energy costs. This list was prioritized based on a combination of what projects would provide us the highest return on investment (ROI), the general condition of our heating system, our long term plans and how much we could afford to accomplish this go around.

Once contractors had provided us with proposals for the different projects we wanted to undertake, we submitted our loan request and proposals to our bank for processing. Several weeks later, Maine State Housing Authority (MSHA) came back to us clarifying some of their requirements. Based on the bids and MSHA requirement clarifications, it was determined that some of the original assumptions were inaccurate and a new set of return on investment (ROI) calculations need to be run to justify to MSHA which projects we wanted our HELP loan to cover. The main reasons for the inaccuracy of the original ROI included:

1. Contractor proposals for some projects were more expensive than expected.
2. MSHA insisted that all insulation project had to be a priority unless we could prove they weren't cost effective (even if other projects were more cost effective).
3. MSHA would not allow us to do certain weatherization projects ourselves and instead required us to hire contractors for those projects if they were to be funded by a MSHA HELP loan. In some cases this more than tripled initial cost estimates.
4. Maine fire codes that we were not aware of require any foam insulation to be covered by a 15 minute fire barrier. MSHA has interpreted this regulation to only allow for the use of sheetrock even though there are other 15 minute fire rated coatings and barriers available.
5. A more efficent boiler was selected than was originally proposed.

The project that was most affected by the issues above was the insulating of the foundation walls. Our original plan was to do this project ourselves to save on labor costs. This project would have consisted of scraping old paint off the concrete walls, painting them with a foundation sealing latex paint and then gluing extruded foam insulation panels to the walls. This would have been the perfect do-it-yourself project. As a DYI project and without the fire blocking requirement, insulating the foundation walls would have been fairly inexpensive (approx $2,500), giving this project a reasonably high return on investment. However, as a contracted out project and having to comply with new fire barrier requirements, insulating the foundation walls becomes very expensive (approx $10,000), giving it a poor ROI.

Revised Return on Investment Calculations

These are the updated ROI calculations based on updated information and bids we received from contractors. Please make sure to see our original energy audit for more details.

Original Return on Investment Calculations

These are the original ROI calculations based on guestimates about how much stuff should cost.

Citing this page

If you need to cite this page, you can copy this text:

Kenneth Barbalace. 70s House Eco Renovation - Revised Energy Audit ROI Calculations. EnvironmentalChemistry.com. Oct. 14, 2009. Accessed on-line: 11/20/2009
http://EnvironmentalChemistry.com/gogreen/ecorenovation/70shouse/revisedreturnoninvestment.html
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