The less you need to spend, the quicker you get to financial independence. So attack recurring costs like a Rottweiler! Home energy costs are a good example.
When The Escape Artist needs specialist knowledge, he looks for someone independent who knows what they are talking about. As it happens, I recently bumped into an expert who advises householders on energy cost reduction and who kindly agreed to write me a guest post.
So enjoy this article from Doug of Mesh Energy and see whether you can make simple changes to unlock big energy savings at home.
The dream of being able to turn your existing home into a low cost, snug and wholly comfortable one doesn’t happen overnight; nor will it come for free, but there are some measures that outperform the rest and can quickly help you save money and energy.
It may seem like a daunting task to start reducing your energy expenditure but with some analysis and common sense, simple changes and worthwhile short term investments in your home can have long-lasting benefits for your wallet.
Let’s start with a typical breakdown of energy use within a UK home below.
Images courtesy of Parity Projects
Immediately, we can see that heating the interior of our homes accounts for two thirds of energy costs. Much of this is often leaking away needlessly via draughts, walls, roofs and doors. When hot water is added, we account for 83% of energy costs and this helps us focus our efforts on these key areas.
Each of the ten improvements listed below will have a different cost and benefit depending on your individual circumstances but I have given you an indication of likely cost and payback of making typical changes.
Step 1: Measure first
Cost = £
Payback < 1 year
There is an increasing list of electricity energy monitoring products on the market. Some are basic and cheap (approx. £30) and others are more clever and require a larger investment (around £170).
We have been recently impressed by a product called Smappee which uses very little hardware and automatically detects the usage of all the significant electrical appliances in your home. With a simple smartphone app you can monitor usage to a high level of detail which should help you spot some immediate savings that can be made around the home.
Fuel and water bills can be analysed to easily see how much is being spent in a typical year too.
Step 2: Drive down fuel costs
Cost = Free
Payback = Instant
This is a ridiculously obvious one but many fail to make a simple change and find a better energy or fuel supplier that is cheaper than their current supplier. With companies like USwitch.com the process is easy and could instantly save you money without making any upfront investment at all.
Next you should have an honest look at your home’s insulation. This could mean you have to start thinking about spending money to save money but done intelligently this aspect of your energy saving regime could pay you back in spades. After all a building that can keep more heat in will be warmer and cheaper to run even if you do nothing else to the home.
Step 3: Improve loft insulation
Cost = ££
Payback = 2- 3 years
It’s rare today that people have no loft insulation installed but most people would benefit from topping it up. Modern building regulations suggest almost 300mm of fibre glass insulation to keep your home snug and once it’s done you can forget about it. Most homes can be treated for less than £500 and you’re likely to get your money back within 2-3 years.
Given that an average home losses around 25% of its heat through the roof, this should be a high priority item.
Step 4: Improve wall insulation
Cost = £££
Payback = 3-5 years
If you live in a home built in the last 100 years it is likely that your home will have cavity walls. If so check if they are insulated and treat them if they are not. There are still companies out there providing this cavity wall insulation for competitive rates and the savings should pay for the work within 3-5 years.
Untreated walls can lose around 30-35% of a homes’ heat loss total, so although grants for this improvement are drying up, the relatively low cost and simplicity of the modification means that it is still worthwhile for most.
Step 5: Target draughts and open chimneys
Cost = ££
Payback = 1-2 years
In older properties this is a real cost saver, especially for those with open chimneys. Draughts can account for around 15% of a standard energy bill, more so for older properties. Simple and cheap draught proofing seals, tape and chimney balloons can recoup the cost within a year and cut down wasted energy that is literally going up the chimney.
Physiologically draughts can make you feel cold even if the room or home actually isn’t. As a result home owners end up cranking up their thermostats and wasting energy unnecessarily. So reducing draughts can have a massive impact on the comfort and running cost of your home.
Step 6: Tackle heating and hot water control
Cost = £££
Payback = 2-3 years
Reviewing how you control heating and hot water in your home can again make a considerable difference given some of today’s technological progress. If you still live in a home that has a single 7-day time clock controlling your heating system at the bottom of your stairs I’ll guarantee you now you are wasting energy in your home.
Increasingly wireless thermostatic radiator valves (TRVs) can enable you to zone your house to give you better timed control of certain areas without having to run around and make adjustments throughout the day to save money.
Depending how you have got on in steps 3-5 you may be able to fundamentally change the way you heat your home and leave your heating on at a much lower level throughout, instead of blasting energy into your home in the mornings and evenings. With energy efficient homes constant heat is better and more comfortable than the heating extremes we have been used to for decades.
Step 7: Install solar PV
Cost = £££££
Payback = 8-10 years
Although solar PV has had a bad rap in the media recently, systems prices have fallen considerably and still far outstrip any standard investment options. Even the largest 4kW (16 panel) domestic system cost no more than £7,000 and you are likely to get your money back within 8-9 years with a 20 year tariff payment term. It will also offset your daytime electricity usage and works wonders with a heat pump.
Do bear in mind though that the solar feed in tariff (FITs) are under review and it is predicted that significant cuts of up to 87% to new applicants will occur as early as 1st January 2016. So if you are interested in this, it’s time to get moving!
Step 8: Install a heat pump
Cost = £££££
Payback < 7 years
An air source heat pump could cost £10-15K for the average domestic home but the renewable heat incentive launched at the beginning of April offers tax free payments for 7 years almost guaranteeing that you will get your money back within this term. In real numbers this is the equivalent of 12.5% return on investment.
Not to mentioned savings around 30-45% compared to its fossil fuel equivalents.
Step 9: Tackle appliance usage
Cost = Free
Payback < 1 year
Appliance usage only accounts on average for 10-15% of homes’ energy bills and so features lower down on this list. The big culprits in the home are appliances with heating elements included such as tumble dryers, kettles, coffee machines, washing machines and the dreaded electric AGA. Many people use tumble dryers and they are a convenience, but most people spend around £150 per year just drying clothes, so if you can find space to naturally dry clothes then you’ll immediately be quids in.
Unfortunately some folks are unwilling to make simple behavioural changes (like turning lights off when you leave a room) to reduce expenditure in this area. Ironically it is one of the simplest and most cost effective ways of saving money as these changes are ultimately free!
Step 10: Change to LED lighting
Cost = ££
Payback = 1-2 years
LED lights are dropping in price the range is now extensive and some can be bought for less than £10 online. If you occupy the house during the day or have areas in the home that are used all the time with lots of lights then this measure is a no-brainer. Depending on usage this typically costs less than £300 to implement, but you could realistically get your money back within the first year if you are a heavy user already.
Key to average costs of changes
£ 0 – £200
££ £200 – £500
£££ £500 – £1,000
££££ £1,000 – £5,000
So there you go, even if you don’t do all of the changes listed above immediately this gives you some ideas on how to start targeting the big energy guzzlers in your home or simply making small changes that will lead onto bigger things. What are you waiting for?!
Thanks again to Doug for this post. For more help understanding and reducing energy costs in your home, visit Mesh Energy’s website or email Doug at email@example.com.