Do Replacement Windows Pay For Themselves?

Window installation
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There's nothing worse than windows that don't provide proper insulation.  You really feel it when the weather is cold.  Thin single-pane windows--or even balky double-panes--seem to radiate with cold.

And that's just the glass area.  If you've got poor or non-existent insulation around the window framing, the entire window area feels almost like the sash is open.  No wonder your furnace constantly runs and your bills run in the mid-to-high three-figures.

You may be of the mind that replacing your windows is the way to go.  Possibly.  One way you may convince yourself is by telling yourself that you can recoup, or nearly recoup, the cost of your windows with the big energy savings you will enjoy.  True or false?

What Are the Claims?

The solution you hear all the time is to replace your windows.  Window replacement means removing the existing sashes (the framed glass) and installing a newer but slightly smaller set of sashes within that existing window frame.  Usually, insulation around the frame can be added, too.

Major window manufacturers such as Jeld-Wen, Pella, Andersen, Marvin, and the like tend to be relatively honest about the issue of recouping window costs with energy savings.  Or at least, they side-step the issue, concentrating only on energy saved without factoring in the issue of windows cost.

Still, don't place too much trust in the big companies.

 Even as major a manufacturer as Pella pulls out the old rhetoric that its "windows are up to 74 percent more energy efficient."  Period.  More energy efficient than what?  What's the contrasting example?

Pella does include this contrast, footnoting it in fine-print font.  Or do they really?  The footnote reads:  "Calculated based on...[a] Low-E triple-pan (sic) wood window compared to a single-pane window in winter conditions."  

Pella barely skates by on a thin ice of honesty.  It's hardly an steelclad argument to compare single-pane windows in winter to high-end Pella Designer Series Advanced windows, with the specs mentioned above.

It tends to be more the local window companies and their salesmen desperate for a commission who overstate how much the windows will pay for themselves with energy savings.  When you're sitting at a dinner table with a yellow legal pad, it's easy to fudge the numbers to tip the buyer into a sale.

Cost Benefit Analysis

It is no secret that new replacement windows will save you energy and provide greater comfort within the house.  The Environmental Protection Agency (EPA) EnergyStar program estimates that the average U.S. home can save $126–$465 a year when replacing single-pane windows and $27–$111 a year for double-panes (with EnergyStar-qualified replacements, not new-construction).  

That sounds great, until you realize that the EPA figures are per year.  By the EPA's estimates, the absolute most you can save over the span of 30 years (length of a typical mortgage) is $13,950.  And that's for New England, based on replacing single panes with double panes.  It's doubtful that you will find many single-paned windows in that cold climate.

Shanon Peterson Wasielewski in her paper "Windows: Efficiency Facts and Myths" did a cost/benefit analysis using the EPA software, RESFEN 3.1, for a two-story brick home in Nashville, TN.  In her scenario, the house has 20 windows and it costs $8,000 to replace all windows.  Wasielewski even acknowledges that $8,000 is an "extremely low estimate."  I concur, placing the cost of 20 low-end, contractor-grade but EnergyStar qualified windows in Nashville at more around $12,000, if lucky.  She ups that number to the more realistic $15,000 to $20,000.

By her estimates, it would take 70 years for the energy savings to help you recoup the cost of the windows.  Besides the fact that you would probably be dead by then, 70 years takes you well beyond both the warranty period for most windows and their practical life expectancy.

Summary

No.  Except in extreme scenarios, replacement windows will not pay for themselves in energy savings.

For there to be any hope of making up your investment, the total cost of the windows must be very low (possible if you replace the windows yourself); current windows must be very bad (single paned and not energy efficient); and you live in a cold climate (Maine, not Florida).