HVAC Upgrade ROI Calculator

About the HVAC Upgrade ROI Calculator

Calculates the simple payback period and 10-year net savings of an HVAC upgrade from its cost and the annual energy savings it delivers.

How to use this calculator

1. Enter the total upgrade cost in dollars, including equipment and installation.
2. Enter the expected annual savings from lower energy bills.
3. The calculator divides cost by annual savings to find the payback period in years.
4. Use the result to compare different upgrade options or financing plans.

The formula explained

The formula computes payback period, which is the number of years needed for savings to equal the original cost. It is calculated as \(payback = \frac{cost}{annual\ savings}\).

• payback = the payback period in years
• cost = the total upfront cost of the HVAC upgrade
• annual savings = the amount saved each year on energy costs

Step by step method

1. Write down the total upgrade cost and the expected yearly savings.
2. Divide the cost by the annual savings.
3. Interpret the result as the number of years needed to break even.

Worked example

Problem. An HVAC upgrade costs \(\$12{,}000\) and is expected to save \(\$2{,}400\) per year. Find the payback period.

1. Use the formula \(payback = \frac{cost}{annual\ savings}\).
2. Substitute the values, \(payback = \frac{12{,}000}{2{,}400}\).
3. Compute the result, \(payback = 5\).

Tips and common mistakes

• Make sure annual savings is a yearly amount, not a monthly one, before using the formula.
• Remember that payback does not include maintenance, rebates, or financing unless you add them into the numbers first.

Frequently asked questions