3. Payback: Water Heaters
What do they mean by “payback period” when it comes to deciding on energy-saving measures or purchases? Payback period is the time it will take for your energy savings to pay for the cost of the energy-saving thing you bought. Say you spend $2 on switching to a 9 watt LED light bulb from a 60 watt incandescent bulb that is used for 4 hours/day. The LED bulb will save you about $1 per month in electricity cost, so its payback period will be 2 months. After that, you simply have an extra dollar in your pocket every month compared to your old bill (and incidentally, LED bulbs last 10 years or so, believe it or not!). You always want to consider the “useful life” of the thing you are purchasing, and bear it in mind when looking at the payback period. It does no good if something saves $50 per year and costs $1,000 (20-year payback) but lasts only 10 years, because it will have to be replaced before it pays for itself. The shortest payback will usually be for the least expe...