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Key Points to Consider

Key points to consider when assessing the cost effectiveness of a method:

  • HUD's guidelines suggest that an energy efficiency measure is cost effective if its payback period:
    • Is no longer than 15 years, and
    • Does not exceed the useful life of the energy efficiency measure.
  • An energy efficiency measure is cost effective if the payback period is less than the functional life of the proposed energy efficiency measure.
  • The payback period should not exceed the expected length of the ownership of the building.
  • The payback period may be used in the selection criteria should be adjusted according to the owner's expected duration of ownership and expected recovery of the investment at time of sale.