New windows cost and payback

Replacing your old windows with new energy efficient units may not be cost-competitive. If your home has low levels of insulation and is leaky (namely if your home has a leaky attic and a leaky basement/crawlspace) installing good windows will not reduce your energy bills significantly. It’s typically a bad investment, rather useless unless the windows are leaking water into the walls or aren't working properly.

We can identify four main situations involving new windows and their cost-effectiveness:

1» Energy efficient windows (instead of more standard windows) are highly cost-competitive in new homes;
2» Window replacement in apartments can be a cost-competitive investment.
3» Replacing old windows in homes with high levels of insulation and sealing can be an effective investment.
4» Replacing existing windows in homes with low levels of air-tightness and insulation is often a poor investment.

Below, we explain why.

Energy efficient windows in new homes

According to data from the National Association of Home Builders, the average cost of new windows in North-American homes is about $6.000, that is, about 3,3% of the cost of the average American home. Payback of Energy Efficient Windows

On the other hand, the heating and cooling costs of average American homes (according to the EIA) amount to about $1.300 per year, while the average energy losses due to windows is often estimated at about 1/5-1/3 of the energy costs (EERE).

If we consider these numbers, it’s easy to conclude that in new homes, an extra investment in windows of $1.000 to $3.000 (by preferring more energy-efficient windows instead of more common windows) isn't difficult to recover. The paybacks can be relatively short. It depends on the level of energy savings provided by the windows, which in turn depends on the features of each building. But energy savings around 10%-20% are in principle easy to get, making the investment worthwhile, whatever the type of building.

The table above shows it. For example: an extra investment of $2.000 in high-energy efficient windows can be recovered in 7 years, for energy savings of about 20%.

Window replacement in apartments

Many apartments have few windows, and are protected at their sides and at their ceilings and floors by other apartments. That gives them a protection that may amount to reasonable or good levels of sealing and insulation. That’s why so many apartments do not have the thermal problems of single-family homes.

And since apartments have on average a small number of windows, which are, in many cases, the most important factor behind heating and cost losses, replacing old and inefficient windows in apartments can be cost competitive, namely in cold climates where energy costs are higher.

That’s not a rule, of course. There are other less expensive means of reducing heating and cooling losses (window films, shutters, blinds in the summer; storm windows and home insulator kits in the winter…); and they too can provide significant energy savings. But there are many cases where the replacement of old and inefficient investments in cold climates is in fact advantageous, from the economic standpoint.

Replacing windows in existing homes

If your home has good sealing and insulation levels on its walls, ceilings and floors, then your old and energy-inefficient windows are very probably the biggest source of energy losses (or unwanted it gains). And it’s not difficult to figure out that replacing them can be a rewarding investment. Most of the energy losses will be fixed by it.

But, as already mentioned, replacing old windows in homes with low levels of airtightness and insulation may not be advantageous. It involves in the best-case scenario a very long payback. New windows may block some drafts and air leakage, and reduce heat losses (or heat gains), but other leakage paths in other parts of the house, and energy losses through the attic or walls or other parts of the home’s envelope will override most of the energy gains provided by windows.

People often feel disappointed with their new windows, when the windows do not solve their thermal and condensation problems. But that is explained by the facts that we have just mentioned – or by cheap replacement windows that do not add much to the old units.

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