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8 energy-efficient home improvements to increase home value (and their estimated ROI)

Discover essential improvements that will make your home more comfortable to you—and more marketable to homebuyers.

Discover essential improvements that will make your home more comfortable to you—and more marketable to homebuyers.

If you’re planning to sell your house, you already know the housing market is like the Wild West out there. Houses new and old are commanding higher prices than ever, and buyers are paying competitive prices to get the house they have their eye on. 

Due to climate change concerns and rising utility costs, making energy-efficient home improvements is one way to increase your home’s market value while lowering your energy bills at the same time.

In this guide, you’ll learn:

How to increase home value—energy-efficient upgrades for your home do matter

The data is clear: According to a study by the National Association of Homebuilders (NAHB), 9 out of 10 homebuyers prefer a home with energy-efficient features and lower energy costs than a cheaper home without energy-efficient upgrades (1).

Meanwhile, over half of real estate agents have found that their clients looking to purchase a home are interested in sustainability (2). 

Clearly, it’s crucial to make energy efficiency a part of your home improvement plan, especially if you have an older home.

Not only will efficiency upgrades significantly increase your home’s value, but they’ll provide major benefits to you in the meantime.

In the short-term, energy-efficient home improvements work to:

  1. Increase your comfort. Adding insulation, investing in professional air sealing, and upgrading your older HVAC systems will make your home feel incredible year round.
  2. Improve your indoor air quality. A healthy home is a happy home, and energy improvements can reduce moisture, allergens, and dust.
  3. Lower your energy use. Everybody loves lower energy bills, and with rising energy costs across the U.S., lowering your energy use today is a win for you—and whoever lives in your home next.

Mainly looking to increase your home value? No worries—let’s talk about what value-boosting energy-efficiency upgrades you should make. 

8 powerful energy-efficient home improvements, how they work, and their ROI

When strategizing how to increase your home’s value, updates to your kitchen, bathrooms, or flooring might come to mind first.

But what most homeowners don’t know is that the most energy-efficient home improvements aren’t seen—they’re felt.

While increasing your home’s value depends on many factors—like your local housing market, the national housing market, assigned school system, other upgrades to your home, and more—giving buyers what they’re looking for in upgrades can be a big boost.

Here are 8 crucial energy-efficient home improvements that could increase home value (and we’ll dive into the why for each of these upgrades below):

  1. Upgrade your home insulation and get your home professionally air sealed
  2. Install an electric air-source heat pump
  3. Convert your home from fossil fuels to electricity to increase home value
  4. Upgrade to a smart thermostat
  5. Switch to a heat pump water heater
  6. Install solar panels
  7. Upgrade to energy-efficient windows
  8. Update older home appliances

Your home might be eligible for essential energy-efficient upgrades (at zero upfront cost). Take this short quiz to see if you qualify.

1. Upgrading your home insulation and getting professional air sealing

Getting updated attic insulation and professional air sealing is one of the primary expert-recommended ways to solve an abundance of energy issues, including high heating and cooling bills, ice dams, and cold air drafts.

The science behind the work:

Even if your home was sufficiently insulated at the time it was built, home insulation wears down over time. (And it’s likely the climate has changed in your area, too, requiring an insulation update.) 

Plus, as your house has settled through the years, air leaks have formed around your foundation, attic structures, windows, doors, and plumbing and light fixtures. 

Every home has air leaks, and although they may be small, they add up to a huge amount of energy waste in homes. In fact, Energy Star estimates 25-40% of your home’s heating and cooling energy is lost through air leaks alone (3).

But professional air sealing can fix this permanently. And once your house is sealed, you’ll feel the difference.

unsealed homes have 30% heat loss

How insulation and air sealing increase energy efficiency:

When you pair professional air sealing with expertly-installed insulation, it works magic on your home’s overall energy efficiency to create a powerful thermal boundary between your home and the outdoors. 

A quick reality-check, though: This is specialized work. Rolling out a few batts of insulation in your attic and adding caulk around your windows on a Saturday won’t cut it. 

Home ventilation is a science. Professional home performance contractors are trained to create the optimum amount of airflow in your home, keeping excess moisture and allergens out while still allowing healthy ventilation throughout your home. Too much DIY insulation and air sealing, and you’ll end up trapping excess moisture in your home.

While professional air sealing and insulation can’t easily be seen by prospective homebuyers, it makes a huge impact on your energy bills. Keep records of the work done and the energy use changes, and show this to your real estate agent when you go to list your house!

Estimated ROI on upgraded insulation and air sealing:

According to a 2017 report by Remodeling Magazine, you could get a 107% return on investment for attic insulation upgrades (4). And according to reports by Pearl Certification, insulation can yield a 83% return. Of course, the return you’ll experience depends on a number of factors, like the cost to professionally install, the type of insulation used, and how much insulation your home specifically needs. 

But depending on where you live, you could get both expertly-installed insulation and professional air sealing at no upfront cost with Sealed. (Yes, you read that right. Pay us back at a rate based on the energy you save each month.)

9 out of 10 homebuyers prefer a home with energy-efficient features and lower energy costs than a cheaper home without energy-efficient upgrades.

National Association of Homebuilders (NAHB)

2. Installing an electric air-source heat pump

Wondering when to replace your HVAC system? If it’s time for an HVAC change, consider replacing your current HVAC appliances with an efficient all-in-one system: an electric air-source heat pump! 

The science behind the upgrade:

Air-source heat pumps are the Tesla of HVAC technology. They’re one of the best HVAC systems available for energy-efficient home improvements that can increase your home value. Homes for sale that have an air-source heat pump enjoy a 4.3–7.1% price premium on average, according to Nature Energy. (That comes out to about $10,400–17,000!)

And they’re two appliances in one: Heat pumps work to both heat and cool your home.

In the summer, they move warm air from your home to the outdoors while circulating cool air; and in the winter, they pull in heat from the outside into your home to keep you warm. (Yes, heat pumps work in freezing temperatures, too.) They also work to clean and dehumidify the air in your house.

Learn more about the tech behind how heat pumps work and at what temperature heat pumps stop working (spoiler alert—it has to be super arctic-level cold for them to quit).

“Homeowners who add modern, energy-efficient HVAC systems or cost-saving heat pumps before selling their homes attract and convert more buyers than those who market their houses with no or old HVAC units.”

HVAC Boss

How heat pumps increase energy efficiency:

Because of the unique way heat pumps work, they use 1/3 of the energy that traditional HVAC systems do (5).

And when you pair modern heat pump technology with upgraded insulation and professional air sealing, you’ve resolved most of your energy waste through those improvements alone. 

This is a huge incentive for buyers looking for more sustainable heating and cooling technology, especially if you convert from heating oil to an electric heat pump. But you’ll directly benefit from these efficiency upgrades in the short term, too.

Estimated ROI on replacing HVAC systems:

It’s possible to recoup anywhere between 35–71% of the cost of installation of a new HVAC system, depending on the source you consult (6, 7). And replacing a lagging HVAC unit can also save you quite a bit of energy use throughout the year. 

And you can get a brand-new air-source heat pump professionally installed for no upfront cost through Sealed if you qualify. 

3. Converting your home from fossil fuels to electricity to increase home value

Because homebuyers are looking to purchase homes with lower energy costs, converting your home completely to electric power—and switching from using heating oil or natural gas—could be an improvement that gains increased buyer interest in your market. 

The importance behind the upgrade:

Passive and net zero homes, or residences that generate renewable energy to meet their energy consumption needs, are increasing in popularity.

According to Realtor.com, “​​People crave a smaller carbon footprint, protection from unpredictable energy costs, and the independence of living ‘off the grid’” (8).

But your existing home, even if it wasn’t originally built to be a passive or net zero home, can better compete in the housing market by making sustainable moves toward clean energy.

Moving toward renewable energy use is essential to fighting climate change, and heating oil and natural gas are nonrenewable fossil fuels (9).

How converting to electricity increases your home’s marketability and comfort:

By converting your home to only using electricity, you’ll experience lower energy costs and increased comfort—but your home’s air quality will improve as well. 

Burning fossil fuels to cook meals or heat your home comes with increased health risks: carbon monoxide exposure, harmful gas leaks, and even straight-up air pollution in your own house.

If a prospective homebuyer has two houses they love, one that runs on heating oil in the winter and one that runs fully on electricity, this could be a deciding factor in their purchase. 

Read converting from oil to electric heat or converting from gas heat to electric heat pumps to learn more.

Estimated ROI on switching from fossil fuels to electricity:

While the quantitative data for the return on investment (ROI) for converting from fossil fuels hasn’t been studied—yet!—the qualitative data is clear: Switching to electricity improves your home’s air quality, is better for the planet, and lowers your energy costs.

Moving toward renewable energy use is essential to fighting climate change.

4. Upgrading to a smart thermostat

Upgrading your thermostat can have a huge impact in programming your home’s energy efficiency. 

And according to a survey by Coldwell Banker, “81% of those who have used smart home products would be more likely to buy a home if smart technology was already installed” (10). So they can increase your home’s perceived value for conscious homebuyers as well.

How smart thermostats increase energy efficiency:

Smart thermostats are not only programmable, but they also intelligently learn your household’s temperature preferences and help you use less energy heating and cooling your home when no one’s there.

Estimated ROI on upgrading to a smart thermostat:

Nest, the smart home technology company, ran a study of their customers that showed their smart thermostat paid for itself in just two years, saving Nest customers 10% to 12% on heating and 15% on cooling (11). 

Each home’s results will differ based on a number of factors—including what type of smart thermostat you have and if you’ve had sufficient insulation upgrades and professional air sealing.

But overall, smart and energy-efficient home technology can definitely increase your home’s appeal to prospective buyers. 

5. Converting to a heat pump water heater

Heat pump water heaters are another energy-efficiency home upgrade that could help increase your home value.

Hot water heaters can last anywhere between 8 and 12 years, so it might already be time to replace yours (12). And what homebuyer doesn’t want brand-new major appliances in their new home? 

How a heat pump water heater works—and why it’s crucial to energy efficiency:

Heat pump water heaters work by heating your water by moving heat around (similar to heat pumps that heat and cool your home), and they’re powered by electricity.

Accordingly to Energy.gov, heat pump water heaters can be 2–3 times more energy-efficient than other water heaters (13). 

ROI on replacing your hot water heater

A family of four can save up to $350 per year on utility costs by installing a heat pump water heater (14)—but only $20 per year in energy savings with a tankless hot water heater, according to EnergyStar.gov (15).

While tankless hot water heaters are a home improvement that’s currently en vogue due to their small footprint and how they heat water instantly, they actually aren’t as energy efficient as a heat pump water heater.

Curious about heat pump water heaters? Sealed can help you convert to a heat pump water heater for no upfront cost.

Heat pump water heaters can be 2–3 times more energy-efficient than other water heaters.

Energy.gov

6. Installing solar panels

With the rise in popularity of passive, net-zero, and sustainable homes, solar panels are sought-after by homebuyers who have energy efficiency as a top priority. 

solar panels on roof of house

How solar panels increase energy efficiency:

Installing solar panels on your house allows you, as a homeowner, to produce your own energy. That means you’re reducing the amount of energy that you have to buy for from your local utility.

And depending on how many panels you install, the energy-use habits of your household, and the amount of energy you’re able to generate through solar panels, you may be able to get your existing home closer to a net-zero home.

To get the most out of your high-dollar investment in solar panels, your house should be converted to electricity and appropriately insulated and professionally air sealed.

Remember, 25-40% of your home’s heating and cooling energy is lost through air leaks alone—if your house isn’t properly insulated or air sealed, that precious solar energy generated from an expensive upgrade goes to waste. 

ROI on solar panels:

Solar panels have a big initial cost, but they can increase your home’s value by over 4% (16). So if the median value of homes in your area is $300,000, that’s an increase of $12,000.

And Sealed can help you get the most out of your solar panel investment by creating a powerful, energy-efficient thermal boundary for your home at no upfront cost. 

If your house isn’t properly insulated or air sealed, that precious solar energy generated from an expensive upgrade goes to waste. 

7. Upgrading to energy-efficient windows

Homebuyers love upgraded windows—they add coveted curb-appeal while also curbing energy-efficiency concerns that come with older windows.

But they’re also a high-cost home improvement. 

How new windows increase energy efficiency:

Getting new windows can increase your home’s energy efficiency by minimizing heat escape in the winter and heat intrusion in the summer, especially when you upgrade from single-pane to double-pane windows.

But what most homeowners and homebuyers don’t know is that you might not need new windows after making important insulation and air sealing upgrades to your home. (Yep, it’s true!)

You can often permanently fix drafty windows through insulation and air sealing improvements, which work to repair your home’s airflow and thermal boundary. And these upgrades often have a lower installation cost and a greater ROI.

window air leaks

ROI on replacing your windows:

The average cost you can expect to recoup by upgrading your existing windows to new vinyl windows is 68.6%, according to a 2021 report by Remodeling Magazine, and the average replacement job costs close to $20,000 (17). If you install new wood windows, your job costs go up and the money recouped goes down. 

And according to Energy Star, new windows will only reduce your energy costs by an average of 12%, or $101–583 if you’re replacing single pane-windows, and $27–$197 per year if you’re replacing double-pane windows (18). 

That’s a costly improvement that doesn’t produce much additional home value or energy savings when compared to the initial cost.

Even if you reduce your energy use by the maximum amount that Energy Star estimates, based on the average cost of replacing your windows, it would take you over 34 years to recoup the total cost. By that time, you’ll need new windows!

8. Updating older home appliances is an important part of energy-efficient home improvements

If your refrigerator is 25 years old and still running strong, well, that deserves an award. (But not for energy efficiency.) It’s likely costing you more to hang on to older appliances—in both energy use and perceived home value by prospective homebuyers.  

How new appliances increase energy efficiency:

Technology has come a long way. And the newest washing machines, dryers, and kitchen appliances make the most out of their energy usage. 

For example, high-efficiency washers weigh laundry loads for precise water use, and their dryer counterparts can sense if a load is dry before the timer ends, stopping the cycle earlier and saving energy.

And upgraded dishwashers might have a longer wash-cycle time than your older version, but they use energy and water more efficiently to get the job done.

ROI on replacing appliances:

Home appliances, like your refrigerator, dishwasher, and stove, have an average ROI of 60–80%, according to The LowDown (19).

Checking the yellow “Energy Guide” tags when shopping for appliance upgrades will help you understand how much the appliance costs to run each year on average. 

Can an existing house get green-certified to boost home value?

After making significant home improvements, you’ll want to make sure to market them when you go to sell your home.

When you list your house, certain terms or certifications featured in the listing can help boost your home’s value or interest from house-shoppers.

In fact, existing homes with a sustainable certification sold for 30% more than homes without a green certification, according to a report by Earth Advantage Institute, a nonprofit that works to address the environmental impact of residential buildings (20). And in one in-depth analysis by Pearl Certification of the Charlottesville, Virginia, housing market, homes that were Pearl Certified commanded a premium price in the market.

You can explore a few home-performance certifications before or after making energy-efficient improvements to see if your home qualifies, including Energy-Star Home Certification, LEED Building Certification, and Pearl Certification.

While Energy-Star and LEED certifications mainly apply to new builds, Pearl Certification also applies to existing homes. 

Even if you don’t pursue formal green certifications for your house, be sure to record and organize information about your energy efficient home upgrades for future home-value needs, like:

  • Saving energy audit reports for your home, especially before and after improvements are made
  • Keeping a history of utility bills, including a comparison of before and after upgrades
  • Storing receipts and records of upgrade costs and professional installation fees

Get essential energy-efficient home improvements done at no upfront cost

At Sealed, we help you get important energy-efficiency and comfort-building upgrades to your home—and we cover the initial cost. 

When you work with Sealed, we manage the project and get the work done right. And you pay us back at a rate based on the money you save each month on energy.

If you don’t save energy, we don’t get paid. 

Take our quick quiz to see if you qualify. (It’s quick and easy!)

Have questions? Want to learn more about how Sealed can help? Give one of our experts a call today at 888-985-7481. 

(And it’s completely free to pick our brains. We’d love to nerd-out with you about home wellness and energy-efficiency!)


February 11, 2022