Lazy Man and Money

Should I Upgrade My Furnace and Water Heater?

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Sometimes, I ask a question and I have a good hunch of what the right answer is going to be. Today’s article is not a such a case. As I write this article, I don’t know where it will go. That’s very different from most of my articles.

In my last article, I wrote about how I got a recently energy assessment. One of the things I learned is that we have a 24-year old furnace.

I had been told that the furnace was old before, but it was so clean (perhaps because it is a natural gas furnace), I thought that the company might have been trying to snow me on buying a new system that I didn’t need. It turns out they were right.

While the furnace works fine, it is in only about 60% efficient according to the estimates. There are systems that are 95% efficient today. So it would seem like nearly a third of my heating bill could be avoided by replacing the furnace. It’s probably a little less since we use gas for cooking and laundry.

Looking at my average bill, that’s a savings of around $45/mo. It may not seem like much, but that’s like getting free HBO, free Netflix, and a still having money left over for a monthly pizza.

Right next to the furnace is the water heater. It looks much newer, but the estimate is that it is just about as efficient (or inefficient) as our furnace. Now that I think about it, we use gas for the water heater, so to save the full $45 a month, we’d probably have to replace both.

And that’s where the question comes in. If you’ve got working equipment, is it worth replacing it to make it more efficient? The answer would require an estimate for the cost of the new equipment. Unfortunately that’s not something I’ve had the time to look into.

While we could replace the older furnace and not the water heater, I’ve heard there are combined systems that might be cheaper. Perhaps, just as important as saving money, would be saving space. As the kids grow, I think finishing the basement is going to look more and more attractive. That’s going to go a lot smoother if we don’t have big water heaters taking up all the room.

If I had to estimate how much the new heating systems would cost, I’d go with $15,000. That seems like a lot of money to spend to save a little more than $500 a year in more efficient fuel usage, right? Part of it is that the cost of natural gas is low enough that even being inefficient isn’t a huge deal.

The wild card in all this is the energy company has some incentives, like rebates and interest-free loans to spread the cost over several years. That’s definitely something to look into, but I’m expecting that the savings won’t cover the cost.

The situation reminds me of one where you have a car that isn’t fuel efficient. It’s rarely worth it to scrap a working car. Instead, the most cost-effective thing to do is drive it into the ground. That’s my hunch here.

Readers, what do you think?

Energy Assessments: Free Stuff and One Secret, Sneaky Tip

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When was the last time someone showed up at your home to save you money… and gave you over a hundred dollars worth of free stuff? This happened to me recently… and I want to share the experience with you.

A few weeks ago I wrote abour our journey to solar power I like to think that I covered it in excruciating detail at that link.

As a condition of getting the state grants to subsidize our solar panels, our energy company has to review our home. At first it seems kind of strange, but when I thought it further it made more sense. The state shouldn’t subsidize solar panels for me unless I can show that I’m focused on effectively using energy in my home. After all, if I have a refrigerator from 1970, they should tell me to buy a new refrigerator, right?

Fortunately, the energy assessment is free*! That “*” means that it isn’t really free, but comes at no additional cost to me. Every month we pay a little money for these services… similar to paying E911 on your cell-phone bill. The difference is that you can get the benefits from the energy assessment right away… and without there being an emergency.

There were three major financial benefits to getting this energy assessment… and in no particular order…

1) The solar panels that I mentioned earlier… It looks like they’ll save us tens of thousands of dollars over time.

2) I had my house scoured in detail for anything that might help me save money on electricity bill. You’d think that you might pay third party $300 for this service. And if you did, it still would likely save you money. It wasn’t looked at from just an electricity point-of-view, but also from an heating efficiency one.

As far as this assessment went, our home aced everything in flying colors. I’d love to take credit, but the previous owner did most everything. The only thing I did was go crazy with LED and LCD light-bulbs.

3) Free stuff!!! Who loves free stuff? This guy! Here’s what we got:

* Two smart power strips that are very useful for entertainment centers. The explanation is a little long for this place, but it keeps your DVR plugged in and running while your TV isn’t using “vampire power.” You want your DVR plugged in to record your shows. You don’t care about your TV using energy until you are watching it, right?

* LED Light Bulbs – Here is the secret, sneaky tip… I had a lot of LED light bulbs in the house – I wrote about it recently: Digging into LED Light Bulb Savings. I also had some Compact Fluorescent Lightbulbs (CFLs). I found that in the areas that I didn’t those light-bulbs – such as a bathroom using G25 LEDs (something that I learned afterwards), they will replace them for you! It is almost worth buying in-efficient lightbulbs just to get all the best bulbs, right?

It’s strange. I’m trying to very conscious of our energy usage and we found a ton benefits.

And sometimes you can bring your tricks to the party. I showed the energy assessment expert my HDHomeRun Prime: End Cable Box Rental Fees!. I also mentioned how it is a crazy power hog. The cable companies won’t work to make it better so consumers have to cobble a situation to make it better… and that’s what I did.

Do you have any tricks to save money on energy? If so please let me know in the comments.

Saving Money with Nest Thermostats?

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Last winter, I purchased two Nest Learning Thermostats for our house. At $250 a piece, they are not cheap. Fortunately, each of them qualify for a $100 rebate from my electric company (rebates vary by company and by state). At $150, they are a lot more affordable. Even better, I got an extremely rare discounted price of $229 on Amazon, which combined with 5% rewards on my Chase Freedom card for that quarter. When all was said and done, they cost me around $120 a piece.

At that $120 price, I could justify adding a little design, especially if was going to save me money over my previous non-programmable thermostat. (What were the previous owners thinking?)

I recently read a study that said you should get the bad news out first and finish with the good news. I’m going to give that a shot here, because the bad news is fairly mild.

The Disadvantage with NEST

Last winter we were renovating our home to add air conditioning, when I saw the deal on the NEST and jumped on it. (Side rant: I have no idea what the “genius” building our house was thinking 20 years ago when he decided not to include central air. New England summers can get extremely hot and humid.) Because our house lacks the ducts used for central air, the renovation was a bit of interesting mixture of technologies.

In the attic we have a typical central air system that blows the cool air down to the second floor. On the first floor we have ductless mini-split air conditioning (they go by many names, I’m not sure what it is officially called). This Frankenstein monster of an air condition system has its advantages… different cooling zones. We mostly spend our time upstairs sleeping, so we only have to cool it down some of the time. When we are downstairs, we can cool the room we are in through the ductless mini-splits.

It’s perfect, except for the fact, that mini-splits don’t work with a thermostat. Every brand of ductless air condition has it’s own proprietary technology. So while they come with fancy remote controls that can seemingly do everything… they can’t talk with my NEST. Only the upstairs, the “real” central air (for lack of a better term), can do that.

In practice this limitation isn’t actually that bad. With the upstairs on NEST it knows to cool down at night. The fancy remotes with our mini-splits downstairs are in the room with us making that easy to control. It’s just disappointing that it isn’t all tied together.

The Big Advantages with NEST

I was tempted to write about how awesome NEST is after the first month. I stopped myself realizing that the review would be better if I’ve used it for months. Not coincidentally, October is a good time to thinking about programmable thermostats. Winter is coming (I couldn’t resist).

The first thing that most people will say is that a simple programmable thermostat will give you 80% of the advantages at 20% of the cost. I would completely agree with that. I’d just say that some programmable thermostats are very complex and their screens aren’t terrible user interfaces. Setting different schedules for a weekend vs. a weekday does get difficult. I also don’t need another device that doesn’t understand daylight savings time.

The NEST is different in that it observes how you control it over time and programs itself based on your actions. If you don’t like how it sets itself up, the web interface for adjusting it is far more user friendly than the cheap characters on most programmable thermostats.

The programming itself is one of the biggest draws, but there are some other useful features. The NEST realizes when you are not home (I’m scared to learn out how) and puts itself it in Auto-Away mode, conserving energy. There is of course the obligatory NEST application for most smart phones. It gives you all the features on the thermostat itself, but for the most part you’d use it to raise and lower the temperature remotely.

Finally, NEST gives you monthly reports that allow you to compare your use against others in your state and the United States overall. It might not seem like much, but I set it as a goal to be in the top 80 percentile… and most months I’ve been able to do it.

Quality Control Problems Slip In?

One of NEST’s selling points is that the average person can install it themselves in a few minutes. However, since I had the aforementioned air conditioning system renovation, it was easy to say, “Can you put these NEST thermostats in too?” Upon installation, the installer told me that one of them was defective.

I took his word for it and got a replacement from Amazon, with zero hassle. They even paid for shipping both ways. The installer had no problem with the replacement.

I’m hesitant to say that there’s a quality control problem. Thousands of reviewers on Amazon don’t seem to think so. It may be a case where I got the one bad one in a million, or maybe my installer did something wrong. In any case, I mention it more for how Amazon took care of the issue quick and easy, than to point out a problem with NEST.

Does the NEST Save You Money?

According to Energy Star, programmable thermostats will likely save you $180 per year. The question is whether a NEST will save you more to offset the cost of the product itself. I can see a NEST saving an extra $25 a year through it’s features such as Auto-Away and smart phone access. That’s just my estimate. If you don’t live in a state with a rebate, it may take a 6 years for it to pay for itself. When you add in the convenience of programming, the monthly reports, and the aesthetics, I think the NEST adds a lot of intangibles that provide a lot of value.

I wish I could say that NEST saved me $X, but with the addition of the air conditioning system, I knew my expenses were going to go up in the summer. Also the switch from a non-programmable to a programmable thermostat was going to yield some savings, but savings that aren’t unique to NESTs features in general. I don’t feel I could make an apples-to-apples comparison, so I’ll simply avoid a comparison altogether.

There are cheaper Wifi thermostats out there, but I stand by the value of NEST. You can price-compare to try to find a bargain on NEST, but like the pricing of Apple products, it will be a long time coming… if ever. They simply stick at their price. Yes, at the beginning I mentioned that I got a discount, but I hadn’t seen one before or since… a span of a few years now.

Given my experience with the return, I highly recommend buying the Nest Learning Thermostats at Amazon, if you decide it is right for you.