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Payback Information: It's Effect on Home Buyers Regarding Energy Efficiency Payback Information: It's Effect on Home Buyers Regarding Energy Efficiency

by Sparti, Steven E

Abstract (Summary)
This study was conducted to find out how payback analysis would affect consumer decision making with regards to home energy efficient upgrade packages.

Three different home plans were obtained from a local builder and seven different energy efficient packages were created. Using Hot2000 the heating and cooling loads were calculated for each building, with each energy efficient package, in each of the four major cardinal directions. The averages were taken and the payback information was calculated. The payback information included the increased cost of the package, the increase in the mortgage payment, the annual savings from heating and cooling bills, the monthly savings, the positive or negative monthly cash flow, the amount of time and interest saved if the monthly savings were added to the mortgage principle, the number of years required to pay back the original investment, the rate of return and the increased home value.

A survey was taken to see how the subjects would react to viewing the payback information. The subjects were individuals looking to buy a home in the next 12 months somewhere along the Wasatch Front area in Utah. Depending on the size of the home the subjects were looking for, the subjects were shown the different packages with their accompanying cost increase and how that would affect the subjects monthly mortgage payment. The subjects then chose the package they would want for their home, based on their knowledge of construction materials, the additional cost, and how it would affect their mortgage. They were then shown the payback information for the home that was chosen and asked if they would change their mind concerning the previous decision. They were then asked what parts of the payback information they found to be most useful.

This study shows that payback information is indeed useful and would help builders to attract new customers, increase profits, and provide customers with powerful information that will empower them to make better decisions about home energy efficiency.

Bibliographical Information:

Advisor:

School:Brigham Young University

School Location:USA - Utah

Source Type:Master's Thesis

Keywords:payback residential construction energy efficiency home building homes consumer buyer preferences

ISBN:

Date of Publication:06/14/2006

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