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Energy Savings Calculator

Quantify the annual saving from an energy efficiency measure and its payback.

About Energy Savings Calculator

Simple payback divides the up-front cost by the recurring annual benefit to get the number of years before the efficiency measure has paid for itself. Everything after that point is net gain, which the lifetime figures make explicit. Payback is the first screen most buyers apply: a system that pays back inside its warranty period is a very different proposition from one that does not.

Formula

Energy Savings

Payback (years) = Cost of the efficiency measure ÷ annual annual energy saving

Cost of the efficiency measure
Up-front cost
Annual energy saving
Recurring saving or return per year

Worked example

With the default values below, Energy Savings Calculator returns Payback Period of 5.63. Change any input above and every figure here is recalculated in your browser.

Inputs used

Cost of the efficiency measureminimum 0
1,800
Annual energy savingminimum 0
320
Expected lifeaccepts 1–60 years
20 years

Results

Payback Period
5.63 years
Payback Period
67.5 months
Lifetime Saving
$6,400.00
Net Lifetime Benefit
$4,600.00
Lifetime Return
255.6%

Step by step

  1. 1Values used
  2. 2Energy Savings
  3. 3Payback Period= 5.63 years
  4. 4Payback Period= 67.5 months
  5. 5Lifetime Saving= 6,400.00
  6. 6Net Lifetime Benefit= 4,600.00
  7. 7Lifetime Return= 255.6

Assumptions and limits

  • The result is derived only from the 3 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 2 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

How is Energy Savings calculated?

Payback (years) = Cost of the efficiency measure ÷ annual annual energy saving Simple payback divides the up-front cost by the recurring annual benefit to get the number of years before the efficiency measure has paid for itself. Everything after that point is net gain, which the lifetime figures make explicit.

Why does Energy Savings matter?

Payback is the first screen most buyers apply: a system that pays back inside its warranty period is a very different proposition from one that does not.

What values do I need to enter?

This calculator takes 3 inputs: Cost of the efficiency measure, Annual energy saving, Expected life. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.

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