Energy Audit Payback Calculator

Work out energy audit payback instantly with clear inputs, formula shown and shareable results.

About Energy Audit Payback Calculator

Simple payback is implementation cost divided by annual net saving, where net saving is the energy cost avoided less any increase in maintenance. It ignores the time value of money and the measure's life, so a two-year payback on equipment lasting three years is far worse than a four-year payback on equipment lasting twenty.

Formulas

Simple payback

Payback years = implementation cost / (energy saving x price - maintenance change)

Return on investment

ROI % = annual net saving x 100 / implementation cost

Worked example

With the default values below, Energy Audit Payback Calculator returns Simple Payback Period of 1.000. Change any input above and every figure here is recalculated in your browser.

Inputs used

Implementation Costminimum 0: 2,500,000
Annual Energy Savingminimum 0 kWh: 320,000 kWh
Energy Priceminimum 0 per kWh: 8 per kWh
Change In Annual Maintenance Costminimum -1,000,000,000: 60,000

Results

Simple Payback Period: 1.000
Annual Net Saving: $2,500,000.00
Gross Energy Cost Saving: $2,560,000.00
Simple Return On Investment: 100.000%

Step by step

1Values used
2Simple payback
3Return on investment
4Simple Payback Period= 1.000
5Annual Net Saving= 2,500,000.00
6Gross Energy Cost Saving= 2,560,000.00
7Simple Return On Investment= 100.000

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation or tax into account.
Figures are rounded for display to 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Why is simple payback a poor sole criterion?

It ignores savings after the payback point, equipment life, and discounting. Net present value or internal rate of return over the measure's life gives a far better ranking of competing measures.

Should measurement and verification be budgeted?

Yes. Without a baseline adjusted for production, weather and occupancy, claimed savings cannot be substantiated — and unsubstantiated savings tend to disappear from the energy bill.