Top 6 Energy-Efficient Home Improvements to Save You Money
Your home is probably your biggest investment. Learn how making energy-efficient home improvements can save you money in the long run and increase the resale value.
By Anne Fonda
Whether you just bought a drafty older home or you’re tired of high utility bills, many energy-efficient upgrades will save you money and help save the planet.
After getting a home energy audit, make a plan and tackle things one at a time, even one improvement a year. You don’t necessarily need to replace something that’s only a few years old, but upgrade to a more efficient model when it comes time to replace it. These are high-impact improvements designed to work together to deliver substantial reductions in energy use and increased cost savings.
Some of them can also help you transition from fossil fuels to electric heat for a cleaner, healthier, and more comfortable home. If you ever decide to sell your home, know that energy-efficient homes have a higher resale value if you can show the improvements and the reduction in energy bills.
Interested? Let’s get started.
#1: Seal and insulate
According to ENERGY STAR®, insulation and air sealing can help an average homeowner save as much as 10% on their heating and cooling bills. If your home is especially drafty, your savings could be higher.
Projects include:
- Sealing gaps around doors, windows, and where plumbing lines enter your home
- Adding attic insulation
- Adding garage door insulation if you have an attached garage, or purchasing an insulated garage door
- Adding basement insulation, even if you have an unfinished basement
- Adding crawl space insulation
Many of these projects can be DIY projects as long as you do your research and use the right type of insulation (spray foam, fiberglass, foam board, etc.) with the recommended R-value for your region.
Sealing gaps and better insulating your home is a quick and cost-effective way to improve your home’s energy efficiency and start saving on your heating and cooling bills. Sealing and insulating are also less expensive than some of the following upgrades.
Visit ENERGY STAR® for some helpful sealing and insulation tips.
#2: Upgrade to more energy-efficient windows
If you have old, single-pane windows and you have the budget, a whole-house window replacement project using ENERGY STAR®-certified replacement windows could lower your energy bills by 12%.
Replacing windows can be one of the pricier energy efficiency improvements, so be sure to do your homework. While the windows may not pay for themselves in reduced energy costs, they can add to your home’s resale value. Learn more about this project at ENERGY STAR®
#3: Upgrade to more energy-efficient doors
If your front entry door or side entry doors are more than a little worse for wear, consider upgrading to ENERGY STAR®-certified exterior doors. Today’s doors are much better insulated and can add instant curb appeal as well. Your energy savings will vary based on the condition of the door you are replacing and the insulating qualities of the new door(s).
#4: Upgrade to a high-efficiency water heater
Did you know that according to ENERGY STAR®, an average home’s hot water heater is the second-highest energy user in the home? Switching to an ENERGY STAR®-certified high-efficiency water heater with heat pump technology could save a household of 4 about $550 every year. At the very least, when you replace your water heater, replace it with a more energy-efficient water heater.
#5: Upgrade to more energy-efficient appliances
Whether you need all-new appliances in your new home or your refrigerator finally bit the dust, opt for long-term energy savings and replace your appliances with ENERGY STAR®-certified appliances.
For example, ENERGY STAR® energy-efficient refrigerators can reduce your energy consumption by 33% and save $220 in electricity costs over a 12-year lifespan.
#5: Upgrade to a more efficient HVAC system and smart thermostat
The average household spends more than $2,200 a year on energy bills, with nearly half of that going to heating and cooling. Depending on where you live, your usage habits, and the type of HVAC system, you may spend more.
If you have an aging, inefficient HVAC system, upgrade to more efficient heating and cooling units. Or opt for an all-electric heat pump system to increase efficiency and lower your carbon emissions at the same time.
HVAC equipment that earns the ENERGY STAR® label is independently certified to save energy, save money, and help protect the climate.
Things to look for:
- A high seasonal energy efficiency ratio (SEER2) for AC units and heat pumps
- A high energy efficiency ratio (EER) if you have hot summers
- A high heating seasonal performance factor (HSPF2) if you get a heat pump
- A compatible smart thermostat
By selecting an energy-efficient AC system or energy-efficient heat pump system, you can greatly reduce your heating and cooling costs, especially if you make full use of a smart thermostat. Savings will be different for every homeowner based on the system, region, how well-insulated the home is, and more.
Visit our Offers, Rebates, and Tax Credits page to see qualifying HVAC equipment.
Take advantage of the energy-efficient home improvement credit
If all of these energy-efficient home improvements sound like a lot, remember that there are energy-efficient home improvement tax credits available until the year 2032 that can help you cover some of the upfront cost.
The Inflation Reduction Act of 2022 energy tax credits include an HVAC tax credit, a tax credit for energy-efficiency windows, and much more. Each improvement we list here has an associated tax credit amount for qualifying products. You should also see a reduction in your monthly energy usage and energy bills for years to come.
You would claim the tax credit when you file your tax return for the year in which you made the home improvement. There are credit limits for each year, but no lifetime limit.
Depending on your state and electric company, you may also be eligible for heat pump rebates as well as rebates on new appliances and a new water heater. Use the ENERGY STAR® rebate finder to help you save the most.
Work with trusted HVAC professionals
We can’t help you insulate your home or install replacement windows, but we can help you choose the most energy-efficient HVAC system to meet your needs and your budget. Visit our Repair or Replace Guide for some tips on knowing if it’s time to replace your system.
Anne Fonda, Content Writer
A Content Writer with Trane Technologies, Anne Fonda researches topics and writes for Trane® and associated residential HVAC brands. She works in collaboration with Trane Technologies subject matter experts, offering easy-to-understand, informative content on complex topics. Her goal is to help consumers make informed decisions on the products and services they need.
She has written for HVAC and other service provider websites for over 16 years. Before transitioning to web content writing, Anne had a 14-year stint as an award-winning journalist. She graduated cum laude from the University of Missouri-Columbia School of Journalism. When she’s not working, Anne enjoys playing word games, reading, gardening, spending time with family, and visiting gardens and museums.
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