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Budget Priorities for an Energy Efficient Home

by Chad Ludeman on February 25, 2008 · 13 comments

in budget,Building Science,Development,envelope,HVAC

I arrived at the topic of this post in a round about way today. It started with a search for the best refrigerator for our project on the energy star website. While we obviously need an energy star model, the range of energy usage ranges from roughly 400 – 700 kWH / year on the energy star chart of refrigerators that would fit our home. While the range is not earth shattering, a difference of 300 kWH / year could end up being 5-10% of a future PV system installed to convert the home to zero-energy status. I found myself looking at fridges from under $1K up to $3K for some of the sleekest and most energy efficient models.

Spending $3K of a $100K budget on a refrigerator just didn’t make sense so I took a step back an tried to look at the home’s energy use as a whole. If we are going to evaluate where we can splurge to reduce energy consumption on our small budget, then we must take a look at everything in the house that is using energy.

A quick search on home energy consumption leads one to this chart from the government. Home Energy Consumption Chart Obviously the percentages will vary depending on the home and the location of the home, but it is easy to see what the priority should be for our budget in terms of energy reduction. I found similar charts in other locations but the big three were alway heating, cooling and water heating. Nothing earth shattering here. Below is the breakdown of energy use in terms of $ spent in the US in 2005:

  1. Space Heating – 35.2%
  2. Water Heating – 13.1%
  3. Space Cooling – 10.8%
  4. Lighting – 9.7%
  5. Refigeration – 6.6%
  6. Electronics – 6.5%
  7. Cooking – 4.5%
  8. Wet Clean (w/d & d/w)- 4.3%
  9. Computers – 1.0%
  10. Other 4.3%

There is also and adjustment of 4.1% to total 100% in here that I will not bore you with an explanation of.

This is relatively basic stuff but every once in a while it helps to review and make sure our budget dollars are not being spent on the wrong items. The goal is to spend a large part of the budget on the fundamental aspects of the home like HVAC and passive solar design rather than bells, whistles and shiny things that do not add to the home’s energy efficient performance. Again, finishes can be added and customized by the owner, but the fundamentals are much more costly to modify once the home is built.

Looking at the numbers, we are reminded why we are paying so much attention to the insulation of the envelope and the passive heating and cooling design. Investing in SIPs (or other super insulation), Energy Star windows and an architect that understands the value of passive heating/cooling design are all great investments as they hit two of the top three energy users pretty hard.

By combining our water heating needs with our space heating system, we have automatically added another layer of efficiency. Investing in a consultant to help us design the most efficient water heating system makes sense for this reason also. In fact, this is probably the best place to invest any extra budget monies we are able to extract from other line items. While refrigeration is the largest consumer out of all of the home’s appliances, any significant investment in reducing it’s energy consumption can not compare to one that will reduce the energy required to heat both the home’s air and water.

Next is lighting which will warrant intelligent placement of both lights and windows to keep the artificial lighting demand to a minimum. A possible upgrade will be considering LED light fixtures rather than CFL’s in select locations. At $100-$200 premiums per fixture for LED’s, this can get pricey pretty fast.

The fridge and all other appliances follow and must be considered. Energy Star appliances as well as using the smallest units possible should be sufficient. I have an 18 cubic foot economy fridge in my loft that probably cost about $700 and uses less than around 450 kWH/year based on some quick research. If it was framed a bit better in my kitchen I probably wouldn’t mind it at all.

So the bottom line is that if we are going to splurge somewhere on our design for energy savings, it should obviously be done to improve our heating, cooling and hot water energy demands. Appliances and lighting should be intelligently designed and small upgrades in the amount of a couple hundred dollars may be warranted at a future date.

Right now, the most tempting upgrade to seek is a solar thermal system that has the ability to greatly reduce both our space and water heating demands. This might cost an extra $5K or less if we are a really smart with our internal water heating/storage components. The alternative is to spend this $5K on improving the overall energy consumption in the home and offering the solar thermal system as an upgrade. The benefit to this would be reducing a future PV system cost, but I have a feeling that most people would rather have a solar system as standard equipment, since a PV install is going to be a big decision that will most likely have to be financed in the future when solar incentives return to our area.

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1 Shawn February 25, 2008 at 11:31 pm

Hey Chad,

I read an interesting article (sorry, I can’t recall the source) that talked about this exact issue. The designer ultimately settled on a smaller refrigerator, even though it wasn’t “energy star” because it used far less overall energy than the bigger, more expensive units (which were “energy star” rated).

There seems to be a certain void in the market – you can buy small, somewhat unsightly units (that don’t use a lot of energy) OR sexy behemoths that are “energy star” rated but still use a lot of energy .

When I step back and take an objective look at my refrigerator, I realize that we are probably only using one third to half its capacity. And, our unit is a fairly small thing! Because so much of our cultural mentality has been geared towards “more is better,” we’ve ended up with products that are far larger than what we need. Families fill up the space, because it’s there, and end up wasting both food and electricity.

2 chad February 26, 2008 at 12:46 am


You are exactly right. It would be so easy to improve the industrial design of the smaller, more efficient units without increasing the cost to produce them.

If you find the really small, under cabinet and drawer units the price is astronomical. And while a small fridge only unit will be very energy efficient, when you add it’s small freezer counterpart to the equation the energy efficiency is lost.

I do think some are starting to catch on, at least on the design end. GE just came out with a pretty nice new “Cafe” line of appliances. The price is about the same as the “Profile” series but the ID is much better and more modern.

My favorite fridge/freezers as far as design and efficiency goes is Liebherr. Very nice and compact options.

One idea I have to improve the design is to simply buy affordable, white appliances with flat door fronts. We could rip off the handles and fix our own fronts and SS handles onto them for a custom, but affordable built in look. More on this later…

3 Brandon February 26, 2008 at 1:47 am

Check out the LG appliances. The stainless ones are all very modern looking and very affordable. They typically all have great reviews on most of the sites I’ve looked on (home depot, consumer reports). Also stores are always offering deals on appliances, it’s very common to find deals of at least 10% off and sometimes as high as 20% when you’re buying multiple appliances. Just a thought.

4 chad February 26, 2008 at 3:11 pm

Good tip on the LG appliances. They have some nice looking models for cheap that are quite energy efficient. They even have a 24″ wide model but I don’t think it’s energy star rated.

Also found this good reference this AM for appliances –

The data is from Consumer Reports

5 Shawn February 27, 2008 at 2:32 am

Add to the refrigerator challenge: Counter depth models. I find the standard depth units tend to take over the kitchen unless you design your cabinetry to prevent this. For whatever reason, the shallower models are more scarce.

6 chad February 27, 2008 at 1:23 pm

Agreed. The counter depth models are also bigger and less efficient. You can’t seem to get them less than 36″ wide unless you shell out the big bucks for the high end models.

Refrigerators that protrude out into kitchens past the counters annoy me to no end from a design perspective. I am leaning towards building our cabinets out a few inches to remedy this but that may end up costing more than simply buying a counter depth unit for a couple hundred more…

7 lavardera February 27, 2008 at 2:17 pm

Don’t build out the cabinets – just the wall behind the cabs, with a recess at the frig space. Leave a margin for ventilation and roll the frig back until the front is flush.

8 chad February 27, 2008 at 2:48 pm

I built out the wall in the last house I rehabbed like you recommend. I guess this would solve our electrical and plumbing chase issues as well as providing more opportunities for easy lighting installs. Good suggestion, thanx!

9 Y. Byzseryas March 8, 2008 at 5:17 pm

Great site! Great chart!

Can you share the components of cost that go into BUILDING the house? What proportion is labor? Materials? Appliances? Site? Foundation? Would love to see something like that. This kind of analysis would probably push decisions to use off-the-shelf everything, since that’s what traditional builders are so good at doing

10 chad March 8, 2008 at 6:50 pm

Thanks Y. Check out the budget on the documents page for a bit more info on the building cost breakdown.

11 Y. Byzseryas March 9, 2008 at 11:57 am

Chad, thank you. I keep wondering about the value of pre-fab and things like SIPS as a way to cut costs, but it seems to me that labor is ultimately by far the largest component, and shifting the cost from one location (on site) to another (factory) doesn’t really change very much. Still, i read stories of Amish building houses as low as $50 per square foot, and I wonder how much of that is labor and how much of that is foregoing higher end appliances and fixtures.

12 robert morrison February 2, 2009 at 10:14 pm

Pie charts, have a look at this uk perspective on energy use in the home, particularly the pie chart, very different to yours shown on this page. Admittedly AC in the uk is marginal, but does that really explain the huge differences? I have seen similar figures to the UK example quoted elsewhere in europe. Somebody is wrong here surely?? (I have no idea who)

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