What’s Greener: A Prius or a Home Energy Retrofit?

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Thinking about purchasing a Prius to reduce your environmental impact?

You may want to consider all of your choices before stepping into a shiny new hybrid because in many cases, investing in a home energy retrofit may have a bigger impact on your carbon footprint and a faster return on your investment than purchasing a Prius.

number crunching

The Prius vs. A Home Energy Retrofit

So, how does buying a Prius compare with improving your home’s energy efficiency in terms of reducing your carbon footprint and seeing a return on your investment? While these the answers to this question will vary depending on the driver and the driver’s home, our team did some research and found that what might shrink your neighbor’s carbon footprint might not be as cost effective for you.

We’ve crunched a bunch of numbers in hopes of getting people thinking about energy efficiency from a new perspective. The points made here are not meant to convince you that you shouldn’t buy a Prius. We’re using the Prius as a symbol of a more fuel-efficient way to get around; we could have done the same calculations with any fuel-efficient car.

Let’s do a little example to illustrate.

Meet Rebecca — An average driver with a home built in the ’90s. Rebecca drives 12,000 miles per year in a car that gets an average of 23 mpg, and she lives in a house built in 1992.

Buying a Prius:

Rebecca would double her fuel efficiency to 46 mph by purchasing a new Prius. As long as she continues to drive 12,000 miles per year with gas costing $3 a gallon, Rebecca will:

  • Use 267 fewer gallons of gasoline per year
  • Reduce her annual carbon footprint by 1,530 pounds
  • Save $800 in fuel every year
  • See an annual 3.2 percent return on her $25,000 investment

From a carbon footprint perspective, the manufacturing of a new Prius is an energy intensive process – the equivalent of consuming 1000 gallons of gasoline. So, Rebecca will spend the first four years with her new Prius paying off the “carbon debt” associated with making the Prius.

Cost-Benefit of a New Prius for Rebecca: $25,000 invested, 3.2% ROI. Assuming she keeps her car for 7 years, her average annual carbon savings will be 655 lbs per year.

Making Home Energy Upgrade: In a 1990’s era home, comfort and indoor air quality issues are common, and duct sealing is typically the single greatest opportunity for energy savings, followed by air sealing and improvements in the ventilation system. In a house of this era, it is reasonable to expect a savings of 10 – 30 percent in energy efficiency from a $3,000 investment.

Let’s say Rebecca consumes 12,000 kilowatt-hours (average residential consumption) of electricity per year in her home, and purchases her electricity at 10 cents per kWh (the national average). If she improves her home’s efficiency by 20 percent, she will:

  • Save 2,400 kWh of electricity per year
  • Lower her annual utility bills by $240
  • See an 8 percent return on her $3,000 investment
  • Reduce her carbon footprint by 1,360 pounds (with coal as primary fuel source)

Cost-Benefit of an Energy Retrofit for Rebecca: $3,000 invested, 8% ROI, annual carbon savings 1,360 lbs.

P.S. — Rebecca might be able to save a big chunk of the initial investment if she took advantage of all the tax credits and other incentives for retrofitting her home.

Which is the Greener choice?

In this example, an audit and retrofit of her house will provide Rebecca — an average mileage driver in average mileage vehicle living in a newer house — with a greater return on her investment and nearly twice the reduction in her carbon footprint as buying a Prius, for one-eight of the cost.

Of course, we left out a lot of detailed factors on both sides in an attempt to simplify the numbers. But if you think we missed something important, or you’re in Toyota’s marketing department and you want to argue with us, contact us and share your thoughts.

What is the greener choice for you?

Whether you’re better off retrofitting or buying a Prius depends on your unique set of factors: what era house you live in, how much you drive, your current vehicle’s mpg, etc. However, there are tremendous opportunities to reduce your carbon footprint and fuel costs, both at home and on the road. And, while choosing a more fuel efficient vehicle is an obvious step towards reducing your carbon footprint, investing in a more comfortable and energy efficient home can often provide an equal, if not greater, reduction in your carbon emissions — and, in many cases – at a fraction of the cost!

Scott Case is the VP of Product Management for EnergySavvy.com, a company dedicated to making energy efficiency easy and accessible for homeowners throughout the U.S. through tools and resources such as an online energy audit and a directory of energy tax credits and rebates.

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3 Responses to “What’s Greener: A Prius or a Home Energy Retrofit?”

  1. John Nicholas Says:

    I think you missed one on the retrofit side.

    Increase the air sealing, duct sealing, and Ventilation items. The house does not need as large a furnace and ac unit. So upgrade from the 80AFUE to a 92+AFUE furnace. Upgrade that 10SEER AC to a 14 SEER or maybe even 15.5 SEER. Get is sized correctly. Many houses have units sized with Rules of Thumb instead of the ACCA Manual J. So instead of an 80 AFUE furnace burning 75,000 BTUs per hour, you get the same heat with burning 30,000 BTUs per hour in a 92 AFUE efficient furnace.

    Run the figures again. And for fun – run it with bumping the R-30 or R-38 insulation in the attic up to R-50.

    Let us know the answers.

    John

    • Mike Rogers Says:

      Great points, John. We see this routinely–we’re frequently stepping down a size or two on the furnace (and we install primarily 95 AFUE furance with ECMs) and can often knock a ton off the size of the AC. R-50 is a pretty standard insulation level for us, too.

      I like Scott’s example, though, and I thank him for posting it here. With pretty his pretty conservative assumptions he show’s the doing things like air-sealing, duct-sealing, and insulating have a bigger impact and a better ROI than the sexy things like buying a hybrid car. Maybe we can get Leonardo DiCaprio to go to the Oscars with a foam gun?

      Thanks,
      Mike

      P.S. I’d also note, that as we start upgrading the equipment, the savings go up, but the costs go up, too. Still, there’s a lot of great things you can do to save in your home that cost a lot less than the $8,000 premium you’d see on a hybrid car.

  2. Trish Sarfert Says:

    I’m glad sites like this exist. I keep trying to encourage the home buyers & sellers I work with to consider energy efficiency upgrades to their homes, and to make sure they know what credits and rebates are available for this. I’ve been keeping a close eye on Homestar as well…

    I also lobbied my MLS last year to add Green search options to our local Pensacola MLS, and that has been implemented now. It will help our local builders & home sellers market their Green and energy efficient properties, and help home buyers to find these homes. I was glad to get these changes in place before we listed the new construction Green Certified home in East Hill, Pensacola (http://1509ECrossSt.GreenHomesPensacola.com). Having Green MLS features will hopefully help the Green housing movement in the Pensacola area, and in other regions that follow.

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