Do New Windows Pay for Themselves With Energy Savings?

Are replacement windows worth the cost?

Window installation

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

That's just the glass area. If you've got poor or non-existent insulation around the window framing, the entire window area feels like the sash is open. No wonder your furnace constantly runs and your bills run higher than expected every month.

Is it time for new windows? One claim made by window replacement companies is that new windows generate less demand on your heating system, so the system cycles on less frequently and this saves money. This claim is true.

But some window companies take this argument further, saying that you can recoup the cost of installing the windows with energy savings. It's an enticing argument, essentially claiming that you can get free windows. To a degree, this is true—but not exactly in the way that some companies claim.

Claim: New Windows Save Money, So They Pay For Themselves

Window replacement means removing the existing sashes (the framed glass) and installing a newer but slightly smaller set of sashes set within its own window frame, which then is set inside of the home's window frame. Usually, insulation around the frame can be added, too.

Window replacement is a very expensive project. The national average for replacing a window is $650. On the face of it, that might sound like a manageable cost. But when you consider that homes can have ten windows or more (usually more), that cost suddenly leaps to $6,500.

One way for some window retailers and local window installation companies to try to sell their products is to claim that the cost of the windows will be made up by the savings in energy costs.

Most major window manufacturers such as Pella and Andersen do not make these claims. Instead, they concentrate only on energy saved without factoring in the issue of the windows' cost.

So, how would this argument work?

Sample Claim

Each new window is $650. A government agency states that new windows can save you up to $583 per year. You buy 10 windows for a total of $6,500. In 12 years, you will have paid off the windows ($6,996) and even have made a "profit" of $496.

A salesperson might say EnergyStar research shows that you can save between $101 and $583 per year, in total, when replacing windows. If each window costs $650 and you use the higher of the two figures—$583—you have nearly paid for the windows in ten years: $5,830 in savings. At that point, you're only short $670. To fully cover the cost, it takes just one more year of ownership.

Considering that many windows come with warranties ranging up to 20 years for glass and 10 years for components, you're still in a safe zone of ownership.

While these figures are basically right, they can get inflated in certain ways so that they bear little resemblance to reality.


Click Play to See Replacement vs. New-Construction Windows Compared

New Windows Cost-Benefit Analysis

New replacement windows will save you energy and provide greater comfort within the house. This much is true. The Environmental Protection Agency (EPA) EnergyStar program estimates that the average U.S. home can save $101 to $583 a year when replacing windows.

What the salesperson may not tell you is that this is based on replacing single-pane windows, which fewer homes have today.

The figure is lower for double-pane windows: $27 to $197 a year with EnergyStar-qualified replacements, not new construction windows.

The argument is further weakened when you consider that the cost savings numbers tend to be at the top of the scale—$583 or $197—while the cost of the windows is often minimized. So, the absolute widest stretch between the cost of windows and energy savings is often given.

Also, it is important to remember that the EPA figures are per year. By the EPA's estimates, the absolute most you can save over 30 years, or the length of a typical mortgage, is $17,490. That figure is for New England homes, based on replacing single pane windows with double pane windows. Yet by the end of 30 years, those windows that you purchased three decades ago have aged out and likely are in need of replacement—again.

Shanon Peterson Wasielewski, in her paper for the Washington Department of Archaeology and Historic Preservation "Windows: Efficiency Facts and Myths" did a cost/benefit analysis. She used the EPA software, RESFEN 3.1, for a two-story brick home in Nashville, Tennessee. In her scenario, the house has 20 windows and it cost $8,000 to replace all the windows. Wasielewski even acknowledges that $8,000 is an "extremely low estimate."

By Wasielewski's estimates, it would take 70 years for the energy savings to help you recoup the cost of the windows. Seventy years takes you well beyond both the warranty period for most windows and their practical life expectancy—as well as your own life expectancy.

Windows Will Pay for Themselves—But Not in a Realistic Sense

So, the short answer is that windows will pay for themselves in energy savings. But the length of time required for the windows to amortize is so long that the savings are essentially neutralized: Replacement windows will not pay for themselves in energy savings in any appreciable or practical sense.

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); the current windows must not be double pane windows (they must be single-paned and not energy efficient); and you must live in an extremely cold climate.

Article Sources
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  1. Benefits of ENERGY STAR Qualified Windows, Doors, and Skylights. EnergyStar

  2. Windows: Efficiency Facts and Myths. Wasielewski, Shanon Peterson