- Cost effectiveness means getting the best value for money
To compare the cost effectiveness of different appliances we must consider a number of different costs, including:
- purchase cost
- installation cost
- running costs
- maintenance costs
- environmental costs
- possible interest charged if a loan has been taken
The payback time is the time it takes for an appliance to pay for itself in terms of energy saving e.g.
- Loft insulation costs £600. It saves £80 per year. How long is the payback time? 600/80=7.5 years
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