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Can a Home Energy Retrofit be a Better Investment than Microsoft Stock?

Many of us have had a relationship with the stock market of some sorts at one time or another.  Maybe you had more luck but when I bought into the hype in 2001 and lost a chunk in one week, my enthusiasm evaporated like the morning’s dew.  Then I came across a statement by Scott Case from EnergySavvy that read: “Home Energy Retrofits are 3.5X More Valuable Than Microsoft Stock: The 5-Year Payback on Home Energy Retrofit vs. Buying Microsoft Stock.”  Hmmm… given the previously disappointing outcome with the stock market, this sounded like an interesting proposition so I asked him to elaborate for us all here:

To illustrate the impact of doing a home energy retrofit as an investment, here’s a simplified example. Let’s say 5 years ago, a homeowner in Philadelphia named Julie was deciding between buying $10,000 of Microsoft stock as an investment or spending that same amount of money on a home energy retrofit to reduce her utility bills. What would have been the better 5-year investment?

The Microsoft stock worth $10,000 in May 2005 would have turned into just over $12,100 five years later (a return of 21% over 5 years), including the increase in stock price and the dividends paid out over the course of the 5 years. But it turns out that the home energy retrofit would have been the much better investment. If Julie had spent $10,000 on a retrofit for her 2000 square foot home in Philadelphia, including a new gas furnace, attic insulation, duct sealing and foundation insulation in her basement, the investment would have returned 49% over 5 years, in terms of lower utility bills and increased resale value.

With the rebates available today, coupled with the Home Star rebates, that same energy retrofit might only cost $7000 upfront, instead of $10,000. So if Julie had been able to use Home Star and other rebate programs at the time, she would have seen a 70% return over 5 years compared to 21% for the Microsoft stock! For backup statistics and detailed calculations visit the EnergySavvy website.

“Making your home more energy-efficient is one of the fastest payback upgrades you can do to your home. You pay less to the utility every month, your house is warmer and more comfortable, and with all the energy rebates and tax credits available right now, there’s never been a smarter time to do it.” – Aaron Goldfeder, EnergySavvy.com CEO.”

No doubt home energy efficiency can be a great investment but it can also be a pain in the neck to understand all the rebates, tax credits, government programs, etc.  I’ll keep you posted on the latest on the Home Star program which passed the House of Representatives last week but is not a final law just yet.  Another awesome website you might find useful is DSIRE.  It’s a comprehensive source of information on state, local, utility and federal incentives and policies that promote renewable energy and energy efficiency.

History demonstrates over and over that in order for us to do the right thing we simply need to understand WHY to do something and HOW to do it.  Thanks goodness the government is out to help out with this.  An energy retrofit will not only make our homes way comfortable, it will cut down substantially our carbon emissions.  And hey, if it’s a better and safer investment than Microsoft Stock then why not? It’s a good deal all around, isn’t it?

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