Energy Efficiency

To start, lets get one thing straight! 

payback time = initial cost / annual saving 

For example, if you pay $200 for lift insulation and save $50 annualy, the payback time will be 4 years. To work this out we take the initial cost ($200) and divide this by the annual saving ($50) to get 4 years - its quite simple when you know how!

This time we have a Hot Water Tank Jacket which costs $15 with an annual saving of $30. This means the payback time will be.... 6 months! Now, this type of example is slightly harder because the annual saving is larger than the initial cost - but this isnt a problem! When we do $15 / $30 we get 0.6 -  this is a decimal because this is months, NOT years. 

So, in the home, the most effective method of insulation are the ones which give you the biggest annual saving -  the ones that save you the most each year on your heating bills (well you're mum and dads!) Eventually the money you have saved on your heatig bills will equal the initial cost of putting in the insulation and this is the payback time. So if you think about it, once you have completed the payback time you ahev got your insulation for free! Not too shabby...

Not suprisingly, the most cost effective methods tend to be the cheapest. They are cost effective is because they have a short payback time.