A touchscreen displaying an energy efficiency rating of a home

Energy prices fluctuate, but currently, they’re rising due to policies that may not change for some time. Most people are affected by this, but did you know that there are ways you can invest in your home to lower your energy bills?

Read on to find out about these great investments that will improve energy efficiency, decrease your energy costs and even raise your home’s value in some cases, thus offering an excellent return on investment (ROI).

It’s hard to calculate the ROI of these upgrades because energy costs, personal usage, and home size, structure, and needs vary from place to place. Investment costs vary, too; some of these are do-it-yourself projects.

But all of the investments described below will save you money over the long run, generating an excellent return. 

The Concept of Payback and Investment

The best way to view these upgrades is through the concept of payback, or how long it takes to recoup your investment in savings. For example, if your insulation costs $1,000 and your heating/cooling bill goes down $100/year, you have a 10-year payback.

Since insulation lasts much longer than ten years, this is a good energy efficiency investment. 

But if you have a 15-year payback investing in an improvement that lasts ten years, it may not make sense financially. 

However, there may be other good reasons to invest in that appliance, such as environmental considerations. For example, suppose you’re replacing something like a leaking roof that needs replacement anyway. In that case, you can calculate your payback based on the additional cost of the upgraded item (if any) compared to the standard one rather than the entire cost.


If your home has an attic, investing in insulation is the best place to start. Installing or adding insulation can significantly reduce your heating and cooling costs, providing a positive payback. So much heat is lost or gained through the attic, and insulating it gives you an excellent bang for your buck.

The average cost is about $0.35 per sq. ft. for blown-in fiberglass and $0.33 per sq. ft. for blown-in cellulose. Either can be added on top of existing insulation unless it is contaminated by animals, in which case removal is necessary at $1-$2/sq. ft. Older insulation tends to settle and lose effectiveness but still has some value.

If your attic is already insulated with batts, covering it with blown-in can cover up some of the defects in the original installation, which disproportionally reduces its insulation value.

If your attic doesn’t have insulation, air-sealing it before you insulate (see next section) makes it much more manageable.

Adding insulation under floors if your house has a raised foundation makes financial sense only if you are in a cold climate.

Fiberglass roll insulation being applied to a ceiling

Wall insulation is another story. Houses built before the 1970s probably have no insulation inside the exterior walls and can lose or gain a lot of heat that way, increasing your costs.

It is possible to blow insulation into the walls through only a few small holes. Of course, you will probably want to repaint after you patch the holes, but you will have a much more comfortable house.

Air Sealing

Have you realized that your house leaks air? There are many places that air can move between the inside and outside of your house. All the junk in the outside air is filtering into your home through these leaks, and you’re losing air that you’ve paid to either heat or cool.

There are potential leaks at every junction between building components: wherever walls meet ceilings and floors; in the joints within the walls, ceilings, and floors; around electrical receptacles, switches, and recessed lights; around windows and doors, pipes, in the roof.

An air duct with the cover off, and caulking around the outside of it. This helps prevent hot attic air from getting into the room.

You can seal all these places. Typical costs are $1-5 per sq. ft., depending on the area. Attics and basements or raised foundations are more expensive than walls but also have more leaks.

The biggest bang for your buck comes from air-sealing your attic. However, spray foam also will insulate it well. So although that costs $3-$5 per sq. ft., you get a twofer.

Improve Attic Ventilation

Attics must have a specific vent area, but that may not provide adequate ventilation. If your attic gets very hot in the summer, consider installing an inexpensive thermostat-controlled fan at one of the vents.

A carpenter installing an attic vent to improve home ventilation

Solar Panels

You can cut down the electricity you pay for by investing in solar panels. Payback averages 8 to 10 years, and the panels last 30 years if properly maintained.

a house roof with solar panels on it, and a small wind turbine at the top

Various credits are available to reduce the installation costs. If your house has the necessary exposure for solar panels, it’s an excellent investment.


You can seal around their frames if you have older windows to stop air leakage, energy loss, and drafts. You may also be able to weather-strip some older windows.

Sealing the windows is an inexpensive do-it-yourself project, which involves caulking the junctions of their frames. You will recoup your investment quickly since caulking and weather stripping are inexpensive.

You could also invest in new windows instead. Here, some of the return on your investment will be intangible because you will enjoy new windows that make your home look better. Your financial return will be not only the reduction of your heating and air conditioning costs but also the increase in the value of your home.

a window being cracked open showing a person's hand on the handle

Be prepared to spend at least several hundred dollars per window. There are many options for windows and different installation methods, so be sure to do thorough research before you buy.

Window Treatments

Another way to reduce energy loss through your windows, whether they are old or new, is window treatments.

The simplest window treatment for older windows is to tape a sheet of clear plastic over the window, creating a pocket of air between the glass and the plastic which reduces heat transfer.

A window treatment is done on a window to increase energy efficiency

The two most compelling are blinds and awnings. You have various options for blinds that you install on the inside of your windows.

They not only keep the sun from shining in and heating up your house in summer, but they can also keep the heat in winter, saving you on both heating and cooling costs and spicing up the interior of your home.

Another way to keep the summer sun from heating up the inside of your house is by installing awnings over the south- and south-ish-facing windows, which will shade the interior of your home from the heat of the sun and reduce cooling bills.


Like windows, doors often leak between the door itself and its frame, and between the frame and the interior and exterior walls. 

A door draft stopper at the base of a door

All entries can be weather-stripped, and if the weather-stripping is old, it may need replacement to function effectively. Also, sealing the gaps between the door frame and the walls is inexpensive. Both of these repairs give you a high ROI, especially if you do it yourself.


If you haven’t already upgraded your lighting, you will get not only a respectable ROI but also lights that last so much longer you’ll hardly have to do any replacing. If you’ve already upgraded to compact fluorescent bulbs (CFLs), you’d benefit from upgrading again.

An energy-efficient LED light bulb is screwed into a hanging socket

Currently, a wide variety of LED lights are available. LEDs are no longer so harsh and span the spectrum of available looks. Over the last decade, there has been so much development there’s hardly ever a good reason not to use a LED light.


One of the best ways to save big is upgrading your heating and air conditioning equipment if it is more than ten years old. 

Newer furnaces are more efficient and use variable-speed motors that can save a lot of energy. If the engine only needs to run at half speed, it uses only one-eighth of the electricity.

Air conditioning has the same savings, only more so, because the equipment has become substantially more efficient. And modern air conditioners can run at slower speeds to cool more efficiently.

Regardless of age, don’t fail to clean or replace the filter regularly. A clogged filter increases the system’s energy use.

A homeowner replaces an air filter to improve HVAC efficiency

A heat pump is the best furnace or air conditioning upgrade for energy efficiency. When the pump heats, it functions as an air conditioner in reverse, pumping heat into the house instead of out. 

Depending on the age of the system you’re replacing, you could reach payback in as little as five years. And you’ll have a quieter system that provides more even temperatures because it can run longer at lower speeds.

You can also set up your system with different zones, so you don’t need to heat the downstairs if the entire family is upstairs. You can allot as many different zones as you want.

Programmable Thermostats

Thermostats have become computerized and smart, allowing control via wi-fi whether you’re in the other room or coming home from a long vacation. 

A smart thermostat is adjusted to optimize energy efficiency

They also can learn your preferences, turning the heat and air conditioning on and off and adjusting the temperatures to what you like, whether you program it or not.

Insulating Ductwork

Improving the insulation on your ductwork can have a very short payback, especially if you have a hot attic with ducts running through it.

Poorly insulated ducts waste a considerable percentage of your heating and cooling dollars, especially in areas like an attic where temperatures may be close to or much hotter than external temperatures, like in the summer.

Some applying metal-backed tape to an cylindrical duct to prevent air duct leakage

Insulating your attic with blown-in insulation (fiberglass or cellulose) can offer the most bang for your buck. The extra cost is minimal, and little or no additional effort is usually involved.

However, if the HVAC installers have hung the ductwork from the underside of the roof instead of laying it down on the attic floor, you can get a good return on not much labor by detaching the ducts from the hot roof and putting them on the attic floor. That alone will reduce your air conditioning bill noticeably; if you also cover the ducts with blown-in insulation, you will have a payback of around five years.

Sealing Ductwork

photo of a technician using caulk to seal an air duct opening to reduce air leakage in a home

Older ducts are likely to be leaky. Sealing the joints and repairing any holes and cracks will save energy in all that conditioned air you’re losing. If the ducts are accessible, you can do it yourself.

Ceiling Fans

Ceiling fans are both a decorative fixture and a money saver to reduce air conditioning costs. They circle air, helping to evaporate moisture on your skin and cool you down. They also help make the air temperature more even around the room.

A technician standing on a ladder adjusts a ceiling fan

Water Heater

The water heater is another appliance that uses a lot of energy. Basic models generally have inefficient storage-tank types, but newer, more energy-efficient models are also available. 

These storage water heaters increase efficiency by using every bit of heat energy that the burning gas (or oil) generates. However, they are more expensive and may have a payback of 10-15 years.

Another storage water heater variety is a heat pump water heater. Using electricity in a very efficient manner, it can achieve 2 to three times the efficiency of a gas-burning standard model. 

Photo of a technician adjusting a dial on a heat pump water heater.

Depending on size, you can expect a payback of 5 to 7 years. And you don’t have the potential dangers of a gas appliance.

The third type of water heater is a tankless heater, which heats water only when there is a demand for hot water. The electric models have around a third of the savings of the gas-fired models compared to storage water heaters but are less expensive to install. Gas-fired models that wring every bit of heat out of the burning gas for additional energy savings are available.

You can offset most of the disadvantages of this type of water heater in various ways, but you may not get a payback shorter than the appliance’s useful life. There are energy savings, but in most cases, not enough to justify the higher cost of an appliance with a limited life that often requires additional installation costs.


Do you need a new roof? You have an opportunity to install new types of roofing—called cool roofing—that have improved energy efficiency behavior over what has been used for years. 

Whether your current roofing material is shingles, tiles, or membranes, it can be replaced with improved materials. For example, old standards like asphalt shingles now have improved properties to reflect heat while minimizing heat loss in winter. 

Workers retrofitting a home with a cool roof in the desert
Workers retrofitting a home with a cool roof.

You can install a white plastic membrane on a flat roof that reflects sunlight and lasts longer than the asphaltic membranes or their analogs that are so common. You can have a several-inch-thick foam roof that insulates your house against both heat absorption and heat loss. 

Metal tiles are available that look exactly like the clay tiles so prevalent in parts of the country, which provide better energy performance than the clay tiles.

Additionally, you can have a composite tile roof that looks good and performs well.

 These don’t exactly have an easy-to-estimate ROI; just know that you’re buying a new roof you need anyway, which will save money compared to your old roof.


Appliances that are constantly in use within the house like the refrigerator, clothes washer, and clothes dryer use a lot of electricity. Others like microwaves, room air conditioners, ventilation fans, dehumidifiers, and others do too.

You can get Energy Star-rated models of these appliances that are certified energy-efficient.

A picture of five appliances with the energy star logo above them.

A heat pump clothes dryer can save 20% to 60% on energy usage. If you do a lot of clothes drying, the payback on this appliance would be relatively short.

Pool Motors

If you have a single-speed pool motor, you’re unnecessarily using a lot of electricity, but you can choose a variable-speed engine that runs at a slower speed for a longer time for a relatively short payback.

A closeup of a pool pump motor
Courtesy of Blue Wave Products

If the new motor runs at half the speed of the old one, you’ll pay for one-eighth as much electricity. Because of these substantial savings, payback on these variable-speed motors is 1½ to 4 years. You’ll probably have quieter equipment, too.


T shirts hanging on a clothesline in front of a sunny, blue sky background

The best investment you can make is a clothesline. The sun’s energy is free, so the clothes-drying aspect of your energy bill drops to zero. Very short payback!


You can save money in many ways by making smart investments in your home, and a lot of these investments increase the value of your home when you sell it.