more than half of an average home’s energy is used to heat and cool indoor air. if conditioned air escapes, or if the home is made out of materials that easily transfer heat to the outdoors, then the energy used will be wasted. insulation, therefore, is often a good energy investment. insulation is rated by its resistance to conductive heat flow (“r-value”), with higher ratings indicating greater insulating effectiveness. recommended r-values for attic insulation range from r-30 (tropical) to r-60 (alaska). adding attic insulation is touted as having the best payback period of nearly any energy efficiency retrofit. [20 points]
it will cost me $3,000.00 to insulate my attic with r-50 loose-fill insulation. i notice after the insulation that my monthly electricity bill decreased from $300.00 to $200.00. my electricity rate is $0.10/kwh. the market interest rate is 7%. assume both heating and cooling are electric.
1. how much electricity will i save in one year because of my investment (in kwh/year) (2 sig figs)? (10 points)
2. what will be the simple payback of my insulation investment (2 sig figs)? (10 points)