Are Home Energy Audits Worth The Cost?

I live in the Arizona desert and in the summer, temperatures regularly reach 110+ degrees. We run our home air conditioner a lot. Even though we keep it set at a relatively high 78-79 degrees, our electricity bill in the summer, particularly August, often nears or surpasses $400, compared to around $100 during the winter months. I'd love to do something to get that cost down.

A couple of years ago, I installed a small solar powered fan I bought at Costco in our attic to help remove some of the hot air up there. At the time, there was a federal tax credit that reimbursed me for about 30% of the cost of the fan. I installed it myself and, since it's solar powered, it doesn't cost me anything to run. I'm not sure it has had a significant effect on my electric bill, but I like the thought that it is pulling at least some hot air out of the attic at no recurring cost to me.

The local electric companies, of which there are two, promote energy audits as a means of identifying areas where your home wastes energy and steps to take to make it more energy efficient. I've wanted one of these for some time. I knew our house was drafty - after big haboobs, I would often find dirt around the bottom of doors and a couple windows inside the house. We definitely had some leaks.

Approaching haboob, as seen from my backyard. Five minutes later, we were enveloped.

Getting An Energy Audit

Three months ago, I decided to bite the bullet and get an energy audit done. I selected a company that was approved by my electric company and had them come out for a $99 audit. The process was fairly painless. They sealed one door and put a fan in it, which blew air into the house, creating a slight pressure difference between the outside and inside. They then checked all the windows, doors, outlets, and recessed lights to see if there was air leaking out. They also went into the attic and measured the amount of insulation I had and checked the air conditioning ducts for leaks at the joints. They had a cool infrared camera and took pictures of walls that had hot spots, indicating insulation deficiencies. As part of the deal, I also received a box of about 10 compact fluorescent light bulbs, a switching power strip, a low flow shower head, and a $50 Home Depot gift card.

A couple days after the audit was performed, the company came back out to go over the results. This is where they try to sell you their services to fix the problems. You don't have to have them fix anything. If you want, you can take your audit results and fix the problems yourself or hire someone else to fix them. But because they are an approved company, my utility offered rebates if I had them perform the work.

I bought my house new and it is currently just over 10 years old. I wasn't expecting too many issues, other than the ones I knew about. In fact, there weren't many issues found. We had some minor leaks in our AC ductwork. As expected, we had some doors and windows that needed to be re-sealed. They recommended putting insulating boxes in the attic over our recessed lights (we have 19 of them) to prevent air leakage to and from the hot attic. Our attic insulation had also deteriorated and more needed to be added to bring us back up to the recommended insulation rating. They had some other recommendations, but they would only provide marginal improvements and I opted not to have them done.

The Cost

The total cost for the work I had done was about $5,000. But, the salesman assured me, I would receive a $500 tax credit from the federal government for the improvements and $600 in rebates from the electric company. I went ahead and had the work done, much to my wife's chagrin. After all the work was finished, the company came back out and retested the house to see how much of an improvement they made. In my case, they reduced the air leakage of my house by 25%. I'm sure the added attic insulation helped as well, but they didn't have any sort of test for that. We have programmable thermostats, so I know our AC is always set consistently to the same temperature. After the work was done (during the summer), our house was noticeably colder and I actually had to reprogram our thermostats to be set 1 degree higher.

About Those Rebates...

As for the rebates and tax credits... Well, funny thing about those. It turns out the federal tax credits expired in 2013. And, two months after the work was done, I finally got a notice from the company (who has to file the paperwork with the utility company for your rebate) that my rebate was not the $600 I was told it would be, but only $350.

So I did what any internet-savvy consumer would do - I went on the internet and left scathing reviews on Yelp, the Better Business Bureau's website, and any other website I could find that talked about this particular company. I felt I had been completely mislead, if not outright lied to. There is no excuse for their salesman not knowing that the federal tax credit expired 7 months prior to him talking to me.

In an amazing coincidence, two days after I left those reviews, I got a call from the company saying my utility company changed their rebate program to match those offered by the other electric utility in town and I would now be getting an $800 rebate. They never mentioned my online reviews, so it is theoretically possible this was a coincidence, but the timing is definitely suspicious. (Note: I have since contacted the third party company who is administering the rebate program and confirmed that yes, this was in fact, a coincidence.)

Was It Worth It?

So... was the energy audit worth it? I'd say the audit itself was definitely worth it. For $49 ($99 less the $50 Home Depot gift card I received, and not counting the other stuff they gave me), I received a fairly detailed energy analysis of my house.

Was the work done worth $5,000 (or $4,200 with the rebate)? On the rebate form, the company listed all the work done and an annual estimated savings for each step. My total annual estimated savings is $232 dollars. That means it will take just over 18 years to recoup my $4,200 cost. So, no, the work performed was not worth it, at least from a strict cost-analysis standpoint.

However, I think the company was seriously overcharging for the work they did. I'd be willing to bet if I had taken the energy audit findings and made the repairs myself or hired a handyman to perform them, I would have spent a lot less. (Of course, I would have also not been able to claim the rebate from the utility company.) I feel like a fair price for the work performed would be in the $1,500 to $2,000 range, which would equate to a 6 to 8.5 year recoup time. That seems acceptable to me.

The savings are not just theoretical. I am seeing some concrete signs of improvement. If I compare my electricity usage for September 2013 with September 2014, I used 210 kWh less electricity this year. However, the average daily temperature for the month was 1.2 degrees cooler in 2014, so that might explain some of the decline. Comparing October 2013 to October 2014 gives a better picture: In 2014, I used 372 fewer kWh despite the average daily temperature being 1.7 degrees higher than 2013. That works out to a $40 savings for October.

All in all though, I am glad I had the extra insulation installed and the leaking doors and windows fixed, even if I did overpay. Being green makes me feel all warm and fuzzy.