Updated: 4/29/2013 3:30 PM ET|
How we saved $2,400 on energy bills
Here's how one couple turned around an energy-bill nightmare into big savings.
When my husband and I closed on a storybook Colonial house in the New Jersey suburbs on New Year’s Eve, we thought we’d bought our slice of the American Dream.
After more than a decade as renters in Brooklyn and New Jersey, we were free of the clutches of landlords – and the instability of a volatile rental market.
We were also pretty cocky about the deal we’d scored: We bought at the bottom of the market, locking in an interest rate that could make a girl blush. Our monthly payments were $400 less than what we’d paid in rent. And we had double the space. And three bathrooms! And a finished basement! The kids were downright giddy.
We couldn’t wait to start putting all that spare cash back into savings. That was, until we got the first call from the oil company.
The problem with heat
Our house is heated with heating oil. Only 6% of American homes are heated with oil and most are in the Northeast, according to a 2009 government report. We knew oil cost more than natural gas, and we figured we’d eventually convert. But we were caught unprepared for just how much more it would cost us to heat our 80-year-old home every month. Add to that, we had no idea what it meant to live in a poorly insulated house that loses heat like it’s made out of Swiss cheese.
We got the first inkling of trouble on moving day. As the movers unloaded boxes, I got a call on my cellphone from Verna at the oil company, a local supplier the previous owner had used. Our tank was a quarter full, she explained, and needed a refill. She asked if I wanted the minimum fill, 150 gallons. “Sure!” I said as I directed movers. “How much will that be?”
“$562,” she said, without missing a beat. “Do you want to pay cash?”
I was floored. $562! How could that be? Oil cost $3.75 a gallon, she explained. A few hours later, the owner, John, swung by. Don’t worry, he reassured me, 150 gallons of oil would last all winter.
At first it seemed like he might be right. Early January was unseasonably warm, and the red dial on our tank in the backyard held steady. But then winter set in, and every day I watched as that dial inched down to the quarter fill mark.
We installed a digital thermometer and set it for 59 degrees at night. Two nights later, we reduced it to 58. And then 57. We piled on the blankets. During the day, I kept the house at 65 when the kids were at school, and bundled up with sweaters in my home office. But the dial kept slipping.
In less than five weeks, our 1,500-square-foot house had sucked through 150 gallons of oil. When I called the company, prices had gone up. The next fill cost us more than $600.
And then we got our first utility bill. (Our dryer, water heater and stove run on natural gas). It was $175. Added together, we were paying nearly $800 a month for energy. All our planned savings were obliterated with a single expense.
The math is pretty simple. Natural gas costs less than half as much as oil, thanks largely to the boom in domestic gas drilling and volatile global oil markets. Last winter, an oil-using homeowner paid $2,087 to heat his home, compared with the $832 a gas-using owner paid, according to U.S. government data. This year, oil prices were higher and the winter was colder, so it doesn’t take a mathematician to figure out what that means for homeowners.
But our problem was bigger than the price of oil. Our house was also losing heat and a lot of it. One thing was clear: We had bought an energy hog, and it needed to be reined in.
How we finally reduced our bill
Houses are not designed to be airtight. They should breathe. A typical house exhales about 33% of its air every hour, expelling dust, mold and other contaminants. But if a house isn’t well-sealed or properly insulated, it blows far more air than it should out into the atmosphere. So, rather than heat your house, you heat the sidewalk. I knew that without addressing the structural issues, there would be no point in shelling out upwards of $10,000 to convert our house to natural gas.
But to do this, we needed money. I turned to DSIRE, a federal database of state incentives available to people who make home energy improvements. I learned that New Jersey, my home state, has a program that provides homeowners with a 25% rebate for making specific improvements to their home, including insulating and switching to natural gas. The program also provides homeowners with an interest-free loan to pay for the work. In order to qualify, you must first do a home energy audit.
An energy audit is like a checkup of your home. An auditor looks at the mechanical equipment in the home, such as the furnace and water heater. He also looks at the chimney, windows, appliances, insulation and air sealing. Often local utility companies will provide the service for free or at low cost. I called ours and had no such luck: Its program ended a year ago. I then began calling contractors in my area. Some charged as much as $295 for the service. Finally I found one that did it for free. Cha-ching!
The next day an auditor came to my door. In walked a wiry guy named Bill carrying a giant red case and myriad other gadgets. The case contained an enormous fan called a blower door. That was by far the niftiest piece of equipment in his collection. The blower door affixed to my front door and pulled air out of the house, lowering the internal air pressure. Bill then paraded around the house with a little smoke pencil looking to see where air from outside seeped back in. He checked outlets, spaces around the pipes, under my sink, chimney and windows.
Then came the next check: insulation. Using an infrared gun, Bill checked the insulation in my walls and found that we had none. Yes, you read that correctly: none! Turns out that many older homes weren’t built with insulation. It was like my house forgot to put on its sweater.
Bill and all his equipment figured out that our house leaked a jaw-dropping 255% more air than current industry limits. Bill recommended that we blow cellulose insulation (basically newspaper) into the walls, basement and attic. He also suggested that we seal all the holes, air seal the attic and convert to natural gas, replacing our boiler with an energy-efficient one. As for our ancient single-pane windows, he suggested we buy heavy drapes to keep the cold air out.
He estimated that these improvements alone would shave $2,400 off our energy bill every year. After the state rebates, the work would cost $8,800. Our savings would pay for the work in less than three years. With the 0% interest loan, we wouldn’t have to pay anything upfront. Instead, we would pay $74 a month for a decade, which seemed far more palatable than $600 oil bills.
I was elated by the numbers. Not only could we convert to a cheaper -- and somewhat cleaner -- fuel, we could also make our house more efficient in the process. Suddenly, that $400 in savings we thought we’d be getting when we bought the house was a reality again. And, our heating bills might actually be lower than what we paid when we were renters. Now felt like the time to pop open the champagne — and tell Verna at the oil company that we wouldn’t be calling anymore.
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Lowering their consumption lowers demand which lowers prices. The tax money you invested in their endevour was worth the investment. Last year I spent $12,000 upgrading from 80% to 95% efficient gas furnaces as well as updgrading to higher SEER rated Air Conditioning.
i got a $250 rebate from the state, as a reward for lowering everyone's bill. I'll need to stay in a house I bought 12 years ago for many, many more years to realize the $11,750 expense at $100-$200 savings on monthly enegry bills....but I know I dd my part to reduce consumption, thus demand and thus price.
way to go - but don't forget that like caos (kaos?), it requires constant monitoring to always insure you maintain the best efficiency. little things can occur to creap up and degrade your current efforts.
space heaters are valuable. not the electric ones that burn dollar billls, but gas burners here and there (like in your fireplace) to produce clean directed radiant heat. also candles, etc, within a controlled area.
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