Focus on Energy: Energy Upgrades — Cash Flow vs. Payback

The question I’m asked most often when doing energy-efficient design is “What’s the payback of this energyefficiency measure?” But since most homes are financed by long-term mortgages, I prefer to steer my clients to the concept of cash flow instead. Cash-flow analysis looks at how much money will be spent per year for energy and on the mortgage. What the homeowner should be looking for is positive cash flow from the energy investments; that is, the value of the energy savings realized should be greater than the added cost to the mortgage payments for implementing the energy upgrades. A Package of Upgrades Not long ago, a young couple I know were having a starter home built, a typical story-and-a-half Cape.