Calculator inputs
Example data
| Scenario | Annual energy cost | HVAC share | Leakage reduction | Project cost | Year‑1 net savings | Payback |
|---|---|---|---|---|---|---|
| Small apartment | $1,200 | 45% | 6% | $180 | $23 | 7.8 yrs |
| Average home | $2,200 | 55% | 10% | $450 | $97 | 4.6 yrs |
| Drafty older home | $3,800 | 60% | 18% | $650 | $295 | 2.2 yrs |
Formula used
NetYn = GrossYn − AnnualMaintenance
IRR is the rate where NPV equals 0 (solved by bisection).
How to use this calculator
- Enter your annual energy cost and estimate the HVAC share.
- Choose a realistic leakage reduction for your caulking scope.
- Set a realization factor to reflect real‑world performance.
- Add total project cost, incentives, and optional DIY time value.
- Pick project life, escalation, and discount rate assumptions.
- Click Calculate savings to view payback, NPV, ROI, and cash flows.
Leakage drives avoidable HVAC spending
Air gaps around windows, doors, and trim force heating and cooling systems to run longer. In many homes, HVAC represents 40–65% of total energy cost, so sealing work targets a large budget line. This calculator converts your annual energy cost into “eligible HVAC spend,” then applies a leakage‑reduction assumption and a realism factor to estimate first‑year savings.
Choosing leakage reduction and realism inputs
For focused caulking of obvious cracks, a conservative leakage reduction is 5–10%. Comprehensive sealing plus backer rod and weatherstripping can reach 12–20% in drafty buildings. The realism factor accounts for behavior and mixed loads; 70–90% is typical when occupants value comfort and keep thermostat habits consistent. If you plan to increase comfort after sealing, set realism lower to avoid overstating savings.
Upfront cost, incentives, and time valuation
Project cost should include consumables, tools, ladders, and cleanup. If rebates reduce the invoice, they lower the net upfront investment. If you do the work yourself, valuing time prevents underestimating the true cost. Even a modest 6 hours at $25 per hour adds $150 to investment and changes payback in small projects. Add annual maintenance if you expect periodic touch‑ups.
Reading payback, ROI, NPV, and IRR
Simple payback divides net upfront investment by year‑one net savings; it is easy to compare across upgrades, but it ignores later years. NPV discounts future cash flows using your discount rate, often 5–8% for household decisions, and it is sensitive to project life. IRR is the break‑even return rate; higher IRR means stronger savings relative to cost. A positive NPV with a conservative discount rate is a strong signal.
Scenario planning for better decisions
Run three scenarios: conservative, expected, and aggressive. Keep costs constant, then vary leakage reduction, project life (commonly 5–10 years), and energy escalation (often 2–4% annually). If NPV stays positive in the conservative case, the upgrade is financially resilient. Use the cash‑flow table to see when cumulative savings turn positive. Document assumptions and rerun after bids.
FAQs
1) What does the HVAC share represent?
It estimates the portion of your annual energy bill driven by heating and cooling. If you are unsure, 50–60% is a practical starting range for many homes, then refine it using past bills or equipment runtime.
2) How should I pick leakage reduction?
Use 5–10% for sealing obvious cracks, and 12–20% for broader, high‑quality sealing in drafty buildings. If you have blower‑door results, use the tested improvement to guide a more precise assumption.
3) Why include a realism factor?
Not all modeled savings become bill savings. Comfort changes, thermostat habits, and non‑HVAC loads reduce realized impact. A 70–90% factor is common and helps prevent overly optimistic payback estimates.
4) What costs should I include in project cost?
Include caulk, backer rod, foam where appropriate, tools, ladders, labor, travel, and cleanup. If you are doing the work, you can also include DIY hours valued at your chosen hourly rate.
5) What do NPV and IRR tell me here?
NPV shows today’s value of future net savings after discounting. IRR is the implied annual return that makes NPV equal zero. Higher IRR and positive NPV generally indicate a stronger financial upgrade.
6) Can I use this for rentals or small spaces?
Yes. Enter the tenant or unit’s annual energy cost and a realistic HVAC share. Smaller projects may have longer payback, so use conservative leakage reduction and include any recurring maintenance you expect.