Real Estate

5 Energy-Efficient Home Upgrades That Offer the Best Return on Investment


Enhancing the energy efficiency of your home has two big advantages: It’ll make your place more eco-friendly and help you save money. A home with reduced energy usage will naturally have lower bills. Plus, the Inflation Reduction Act offers credits and additional incentives to homeowners eager to go green and able to make energy-saving advancements to their home.

Prioritizing your upgrades should be done based on your own needs and budget, but consider this: Many energy-efficient upgrades can offer you a solid return on investment, or ROI, when it comes time to sell your home. So it makes perfect financial sense to focus on the improvements that will increase the value of your home.

Which eco-friendly updates are most likely to help pad your wallet? Read on.

1. Attic insulation

Most homes lose a significant amount of energy through their roofs, so it is beneficial to get your attic insulated.

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Granted, upgrading your attic insulation is about as sexy as getting bunions removed—but what it lacks in flash it more than makes up for in effectiveness.

According to Remodeling Magazine’s annual Cost vs. Value Report, installing loose-fill insulation in an attic returns a higher value than its cost. Plus, the Environmental Protection Agency estimates that homeowners will save 15% on heating and cooling costs with effective insulation.

“One of the best energy-efficient investments homeowners can make is in attic insulation,” says Maureen McDermut, a real estate agent with Sotheby’s International in Montecito, CA. “Most homes lose a significant amount of energy through their roofs, so it is beneficial to get your attic insulation up to R-38, which is about 10 to 14 inches.”

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A good contractor can upgrade your attic insulation for around $2,500, depending on where you live.

2. Energy-efficient windows

Energy-efficient windows have a return on investment of around 70%.

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How much of your heating bill blows right out the window? Energy-efficient windows will save you about 15% annually on energy bills, according to the EPA.

“Energy-efficient windows have a return on investment of around 70%,” says Shri Ganeshram, founder and CEO at Awning in San Francisco. “Just be sure to choose high-quality windows with a good warranty to ensure you get the best value.”

Prices for energy-efficient windows start as low as $325 per window.

3. New doors

New door models that are designed to be more energy efficient can save a great deal of energy.

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It’s time to seal savings in with better doors! Doors are a major source of energy loss—leaky ones can lead to up to a 40% energy loss.

“Replacing old, inefficient doors with new models that are designed to be more energy efficient can save a great deal of energy, as well as some money on your monthly utility bills,” says Shaun Martin, owner and CEO at The Home Buying Company in Denver. “Depending on the climate you live in, installing new windows and doors could yield an ROI of up to 80%.”

Including installation, energy-efficient doors start around $500.

4. Solar panels

Solar panels can also be extremely attractive to potential buyers when it comes time to sell your home.

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Why not harvest the sun’s energy to fuel your home? Installing solar panels is one of the best ways you can lower bills and cut wasteful energy use.

“Installing solar panels for your home is one of the best investments you can make when it comes to energy efficiency,” Martin says. “The initial cost may be high, but the long-term benefits far outweigh the short-term costs.

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Solar panel installation doesn’t come cheap: Expect to shell out $15,000 or more. But that initial investment is nearly guaranteed to pay for itself. Most homeowners pay off the cost of their solar panels in about eight years, and typical panels last for about 25 years.

Solar panels, and the savings they provide, can also be extremely attractive to potential buyers when it comes time to sell your home.

5. Programmable thermostat

A programmable thermostat could have an ROI of anywhere between 5% to 25%.

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Installing a programmable thermostat has proven to save money on energy bills. Energystar.gov estimates a household can save up to $180 per year on heating and cooling by properly setting their programmable thermostat according to their recommendations.

“Depending on the climate and energy usage of the home, this type of improvement could have an ROI of anywhere between 5% to 25%,” says Martin.

A programmable thermostat costs around $100.



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