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What is the return on investment for replacement Windows?

By Phillip Bradrick posted January 14th, 2012

</p><br /><br /> <p>Considering the return on investment for replacing your windows?


A few weeks ago I heard a radio advertiser trumpeting the fact that they saved one of their customers 50% on energy by replacing their windows. And to make it even more amazing, they claimed that the windows they took out were fairly new, double pane windows. To the uninformed home owner, this ad might have seemed to be the perfect solution to saving energy. But is their claim true?

Stop for a moment and forget all the information you have heard about windows through radio, TV, and newspaper ads, and let’s start from square one and equip you with the information you need to think about windows sanely.

Real benefits of replacing your windows

1. Energy Savings – Since you have heard so much about replacement windows slashing your energy costs, let’s lay out the savings you can really expect. Windows are measured in U-values. This term can be confusing, but it simply describes the amount of heat the window conducts. U-values are the inverse of R-values which measure the amount of heat that is resisted. R-values are used to measure products like insulation. This means if you have an older home with single pane wood windows, they will have a U-value of approximately .99. Convert this into R-values and it equals R-1. If your walls are insulated with a standard R-13, then your windows are letting heat out of your house 13 times faster than your walls. Windows also lose heat because they usually leak air around the sashes. On average, windows represent an estimated 20% of a home’s overall air leaks.

So now we know windows are a big drain on energy, but how much will replacement windows save you? Let’s say that you replace your single pane wood windows with an Energy Star replacement window having a U-value of .32. You have 15 windows in your house with a combined area of 120 square feet. Using the calculation formula based on the number of heating and cooling days for a particular region we can come up with an estimated amount of savings due to better thermal characteristics. For the scenario we have laid out, we would see an annual savings of $208 from thermal improvements alone. If we also figure that the new windows result in a 75% decrease in window air leaks, that would account for an additional savings of approximately $94 bringing us to a grand total of $302 savings per year. Before you pass judgment on replacement windows let’s look at some of the other benefits.

2. Comfort – Often windows are the first thing that comes to people’s minds when they think about air leaks. Although they account for only 20% of an average home’s overall leakage, they are some of the first ones you feel. And when the wind picks up, and the weather gets cold, they can have you reaching for the nearest blanket just to stay warm. Replacing leaky windows can make a major impact on your home’s comfort. And keeping the home owner comfortable and happy is a fantastic benefit!

3. Convenience – Is washing windows a challenge? If you install new double hung windows you can select a model with a tilt-in sash feature so you can clean both sides of your windows from inside your house. This saves you the hassle of hauling out the ladder or the cost of hiring a window cleaning company.

4. Aesthetics – If you have old windows that you replace with bright, fresh new ones, I would bet my last dollar on the fact that you will have many friends and neighbors comment on how great they look. From both the inside and the outside, new windows make your home look newer and cleaner.

5. Re-sale Value – According to a 2005 survey of cost versus value done by Remodeling Magazine, replacement windows have an 89.6% return on investment. Although this figure may be less in our current housing market, replacement windows will still yield a higher price for your home, covering a good portion of the cost you invested.

So what is the return on investment for replacement windows? That question is packed with lots of variables. Based on the scenario we started with, if we figure that each window costs $425, and there are 15 of them, we have a total window replacement cost of $6,375. If we look at the return on investment strictly from an energy stand point, we divide the $6,375 by the $302 annual savings to get a ROI (return on investment) of 21 years. This number on its own is not very impressive, but when we figure that at least 70% of the cost of the windows will be recouped in the increased value of your home we can drop that ROI (return on investment) to 6.3 years. Add the additional annual savings you might see by firing your window cleaner (because you can easily clean them yourself), and you could save another $120 a year dropping your ROI (return on investment) to 4.5 years. And on top of all that, add the benefit for being more comfortable, enjoying a bright clean view, and hearing your neighbors and friends remark about how good it looks, and now you can see why it is an extremely worthwhile investment for home owners looking to achieve these goals. So next time you hear someone advertising windows that will slash your energy prices take it with a grain or two of salt.

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