Personal Loans

6 Ways to Make Your Home More Sustainable

Modern technology has allowed for homes to be more sustainable than ever with energy-efficient appliances, insulated windows and doors, water-conserving fixtures and sleek solar panels. The benefits of sustainable living are twofold: You do your part helping conserve natural resources and reducing pollution while also saving money.

Paying for these sustainable home upgrades is another matter, though. Luckily, homeowners  have a few options to choose from, including home improvement loans and home equity loans.  Below you’ll find some of the most effective ways to save energy and money – and compare options for home improvement financing.

How to make your home more sustainable

To lower your home’s environmental footprint, consider these moves and their estimated costs, based on homeowner data collected online by HomeAdvisor as of July 15, 2020.

Home improvement projects to conserve energy and save money
Sustainable home improvement project Estimated price range
Install low-flow water fixtures $160 to $3,000
Upgrade to more energy-efficient appliances $300 to $3,500
Insulate walls, crawl spaces and attics $1,400 to $2,300
Replace old windows and doors $500 to $10,000
Replace old AC units and furnaces $2,000 to $12,500
Install solar panels on your roof $16,400 and $30,700

1. Save water by installing low-flow faucets, dual-flush toilets and a tankless water heater

It’s easy to take our natural resources for granted when water seems to flow so liberally from the faucet. Swapping out your home’s older water fixtures – like faucets, a shower head or a toilet – can help conserve water and save money on your utility bill.

Toilets use the most water of any fixture in your home, accounting for almost 30% of the water used indoors. While older toilets use about six gallons of water per flush, newer low-flush toilets must use 1.6 gallons or less per flush, according to federal Environmental Protection Agency (EPA) guidelines. Simply upgrading your toilet can save gallons of water each time you use the restroom. You can even consider a dual-flush toilet, which uses less water for liquid waste and more water for solid waste.

Swapping out your conventional storage tank water heater with a tankless water heater can also help you conserve energy. With tankless heaters, water is heated on-demand instead of stored in a tank, so they can be up to 34% more energy efficient than traditional water heaters, according to the U.S. Department of Energy (DOE).

When buying new water fixtures for your home, look for the WaterSense label, which shows that a fixture has met EPA guidelines on water conservation.

Tip: You may also consider harvesting rainwater for use at your home using a rain barrel. Check the laws in your state regarding rainwater harvesting before making this investment.

Cost estimate: About $220 to $520 to install a new toilet; $160 to $340 each to install new faucets; and between  $1,000 and $3,000 for a tankless water heater.

2. Upgrade to more energy-efficient appliances throughout your home

Living in an older home imbued with charm and class is wonderful – until you get that often enormous electric bill. If your home is outfitted with old, inefficient appliances, you’re wasting electricity and putting a drain on your energy bill. Plus, modern appliances are just plain easy (and nicer) to use. According to HomeAdvisor, this is how much it costs to replace household appliances:

Replacement cost for common household appliances
Appliance Cost of materials Cost of labor
Dishwasher $330 to $1,900 $200 to $500
Dryer (gas) $760 to $1,650 $100 to $200
Microwave $50 to $2,300 $115 to $200
Refrigerator $450 to $10,600 $150 to $250
Stove and range $410 to $7,500 $100 to $200
Washing machine $600 to $2,700 $100 to $200
Source: HomeAdvisor

Tip: Look for Energy Star-certified appliances, which meet EPA’s standards for energy efficiency.

Cost estimate: $50 to $10,600 for the actual cost of the appliance; $100 to $500 for labor.

3. Reduce AC use by adding insulation within walls, crawl spaces and attics

Without proper insulation, your home could be leaking hot or cool air, meaning that your AC system and furnace have to work even harder during the winter and summer months. This obviously puts a burden on your pricey HVAC equipment, but it also means that you’re wasting energy.

Insulation is a simple and effective way to save energy at home. Adding insulation – as well as properly insulating your home – could save around 15% on home heating and cooling costs, according to Energystar.gov. Plus, insulation doesn’t have to cost a lot upfront; according to HomeAdvisor, you can expect to pay an average of $1,600 for blown-in insulation.

Cost estimate: Between $1,400 and $2,300, with an average of $1,600 for insulation that’s laid down, like fiberglass or radiant barriers. Blown-in insulation cost a bit less.

4. Conserve energy by replacing old windows and doors

Drafty windows and outdated doors may be an energy drain on your home; cold air can seep through cracks under door thresholds and through old, thin window panes. Modern technology has made windows and doors much better at keeping air inside your home.

Window replacement is not a cheap project, though. Windows cost $650 each to replace, on average, according to HomeAdvisor. But if you’re considering selling your home anytime in the near future, then window upgrades are a must as many buyers prefer them.

The same concept applies to exterior doors. New doors are built to be more energy-efficient and better insulated than older doors, which can reduce energy use and therefore save money on your electric bill every month. As with appliances, when you’re shopping for new windows and doors, look for those that are Energy Star-certified. You’ll find more Energy Star tips for how to make a home energy efficient here.

Tip: Don’t want to shell out for new windows or a door? Try weatherstripping instead. The DOE offers a handy guide for homeowners that offers advice on how to choose and install different types of weatherstripping, like caulk and reinforced rubber and silicone.

Cost estimate: Replacing windows costs between $200 and $1,800 per window, or $3,000 to $10,000 for a three-bedroom house. Door replacement costs about $500 to $1,500 on average – expect to pay more for exterior-facing doors.

5. Replace old AC units and furnaces that are draining your power

Air conditioning (AC) units aren’t meant to last forever. In fact, their lifespan is closer to 20 years. Even by replacing a 10-year-old central AC unit, a homeowner can save between 20% to 40% on home cooling costs, according to the DOE.

The catch: Central AC unit replacement can be costly upfront – around $5,000 on average, according to HomeAdvisor. Air conditioner replacement often costs more than a new AC installation because the contractor has to remove the old unit in addition to installing a new one.

Replacing a furnace or boiler can also be a smart energy move. According to the DOE, upgrading an inefficient gas heating system could save 1.5 tons worth of carbon dioxide emissions annually. For oil heating systems, that number rises to 2.5 tons of carbon dioxide emissions. Installing a new high-efficiency furnace or boiler in your home won’t be cheap, though, and costs vary according to factors like the brand, heating efficiency, warranty and where you live.

Cost estimate: To replace a central AC unit, an average of $5,700 and $11,000 (or more) for a high-end unit; $2,000 to $10,000 to replace an oil, gas or electric furnace.

6. Harness the power of the sun by installing solar panels

Solar panels were once viewed as big, bulky, inefficient and costly. Today, that representation isn’t quite accurate. Solar panels are now sleeker, cheaper and generally more accessible than ever before. Converting to solar costs about $23,600 on average, and that price is steadily dropping.

Still, installing solar panels on your roof is a considerable investment, even when you consider the tax credit associated. Plus, that tax credit has steadily decreased from 30% in 2019 to 26% in 2020. The tax credit will further decrease to 22% in 2021 and will phase out in 2022 unless Congress intervenes. Still, some homeowners may qualify for state or local incentives on the cost of installing solar panels. Check out the Database of State Incentives for Renewables & Efficiency to find what your area offers.

Solar panels don’t just pay for themselves with tax credits and energy savings, though. Adding solar panels to your home can boost its value by 4.1% on average, or $9,274 for the median home value across the country, according to April 2019 research from online real estate database Zillow. By the time you’re ready to sell your home, the solar panels you installed could provide a solid return on investment.

Tip: Google’s Project Sunroof helps you estimate your energy savings based on the size of your roof and the estimated amount of sunlight your property gets. Your savings, of course, will depend on your electricity rate, which varies depending on where you live. Still, a roof with 1,075 square feet of space available for solar panels that receives 1,473 hours of sunlight per year could net about $2,000 in energy savings over 20 years.

Cost estimate: The price of solar panels varies widely depending on where you live and the depth of your project, but expect to pay between $16,000 and $30,000.

Ways to pay for sustainable home improvements

Financing method Pros Cons
Pay in cash
  • No additional debt to take on
  • No interest payments
  • No credit check required
  • May not be an option for expensive projects
  • May not be an option for urgent projects that can’t wait for a budgeting plan
Home improvement loan
  • No risk of losing collateral if you default on payments
  • Can be used to pay for virtually anything
  • Prime borrowers may get competitive interest rates
  • Lump sum with fixed APRs and fixed monthly payments
  • Subprime borrowers will likely receive unfavorable terms, like high APRs
  • Potential for fees, like an origination fee (typically 1% to 8% of  loan amount) and prepayment penalty
Home equity loan
  • Interest rates tend to be lower than with unsecured loans
  • Lump sum with fixed APR and fixed monthly payments
  • Risk of losing your home if you default
  • Closing costs, typically 2% to 5% of loan amount
HELOC
  • Interest rates tend to be lower than with unsecured credit cards
  • Revolving line of credit, so you only pay interest on what you borrow
  • Risk of losing your home if you default
  • Closing costs, typically 2% to 5% of loan amount
  • Variable interest rates, so your APR could change

Setting a budget and paying in cash

Paying in cash is the preferred method when funding home improvements. That’s because you won’t have to put anything up as collateral, pay interest to a lender, or need a credit check. You can also complete the renovations as you see fit using your own money.

Of course, if it were that easy, everyone would pay for everything in cash. Home improvements are expensive, and it may not be smart to spend all your savings to improve your home even if you have the money. Plus, sometimes you don’t have the time to budget and save up for home improvements, like when an appliance or home system (like your HVAC) breaks down.

This is a good option if… You have the disposable income to spend or have time to save up.

Using a personal loan for home improvement

Personal loans for home improvement, also known as home improvement loans, give you the power to pay for a project without putting your home on the line, like you would with a home equity loan or HELOC. These loans are unsecured, which means they’re backed by your promise to repay the lender. But because there’s no collateral to seize if you default on the loan, personal loans tend to come with higher interest rates.

Home improvement loans come in a lump sum amount and have fixed interest rates and monthly payments, so you’ll always know how much you owe. However, interest rates vary widely depending on a borrower’s creditworthiness. For example, prime borrowers with an excellent credit score (typically 760 or more) may be able to secure a personal loan with an APR in the range of 10%, while borrowers with a score of 679 or lower might face APRs of 25% or higher.

This is a good option if… You are a good-credit borrower who can secure favorable terms, such as a low APR.

Taking out a home equity loan or HELOC

Home equity loans and home equity lines of credit (HELOC) let you leverage the equity you’ve paid into your home to borrow for lower interest rates. This makes them a good alternative to personal loans and credit cards when paying for home improvements; lower interest rates means the less you spend on financing over the life of the loan. According to ValuePenguin, the range for interest rates for home equity loans and HELOCs is about 2.5% to 9.99% as of June 17, 2020.

Home equity loans and HELOCs also come with fees, such as closing costs. Also, you can only use these financing options if you have a decent amount of equity in your home. To calculate your home equity, subtract the amount you have left on your mortgage from the value of your home. With a home equity loan, lenders will usually let you borrow up to 85% to 90% of that amount, depending also on how much you still owe on your mortgage. With both a home equity loan and a HELOC, you risk foreclosure and losing your house if you default on payments.

This is a good option if… You have enough equity in your home to cover the costs of home improvements and are confident you can repay the loan or line of credit.
 

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