Save Money On Utilities With A Home Energy Audit

By Donna LeValley, Patricia Mertz Esswein

last updated 20 December 2024

We spend a sizeable chunk of our incomes on utility bills. Bankrate reports we pay on average $1.644 annually on electricity costs, and $756 on gas.

To maximize savings and increase your comfort, an energy audit — a.k.a., a whole-house assessment —and home retrofit may be in order.

Think of an energy audit as a physical for your home. Are you suffering any of these common symptoms?

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One room is always too cold or hot
Your house quickly gets dusty
You suffer from frequent sinus or respiratory problems
Dank smells rise from the basement or crawl space or smoke from wildfires creeps inside
In winter, you suffer from drafts
In summer, your second story feels hotter and more humid than the rest of the house, although your air conditioning runs all the time
You’ve compared your energy costs with your neighbor’s and yours are much higher for similar homes

Should you get an energy audit?

A whole-house assessment recognizes that each of the components or systems in your home — the exterior shell, insulation, heating and cooling systems, ductwork, and ventilation — work together, and recommends fixes to optimize efficiency and comfort.

Most homes have inefficiencies; correct them and you can cut your energy usage and bills by as much as 25%, according to Home Performance With Energy Star, a national program administered by the U.S. Department of Energy and the U.S. Environmental Protection Agency.

“If you reduce energy cost, you can increase comfort, and vice versa,” says Jonathan Waterworth, a certified energy auditor in Phoenix, Ariz. He says some of his clients cut their energy use by 30%.

What are the benefits of a home energy audit?

An energy audit and recommended improvements have other benefits besides saving money including:

You can maximize the life of your current heating-and-cooling system, and when those components ultimately fail, you’ll be ready to replace them with higher-efficiency electric ones, such as a super-efficient heat pump
You’ll reduce your carbon footprint. If you’re thinking about going solar, reducing your home’s energy demand first will allow you to install a smaller, less expensive system
When you sell your home, proven energy efficiency will appeal to buyers, and they may be willing to pay a premium

How does an energy audit work?

Energy auditors will visually evaluate your home inside and out. Their diagnostic tools include a blower-door test, which measures the draftiness of your home, and thermal infrared scans to locate drafts and missing insulation. They’ll identify problems, prescribe solutions and, after any work is completed, test to ensure it was done properly and the problems have been solved.

As part of this, they might suggest upgrading your home's equipment. This could include installing energy-efficient appliances, LED lighting, smart power strips, or smart thermostats.

Your energy auditor should be trained and certified in a whole-house approach through one of two organizations: The Building Performance Institute sets standards for residential energy auditing and upgrading and certifies the contractors it has trained and tested. Home Performance With Energy Star assists local program sponsors — typically a state energy agency, utility company or nonprofit organization — to train home improvement contractors in the whole-house approach.

Waterworth suggests looking for energy auditors with at least five years of experience. “The more you do, the more things you see and can identify and know how to deal with them in the most beneficial and cost-effective way,” he says.

What does an energy audit cost?

An assessment typically costs $200 to $600, depending on the location, age, size and design of your home, and could take several hours, according to homeguide.com. You can offset the cost of a home energy audit up to 30% (a maximum of $150) with the federal home energy audit tax credit.

Regardless of whether the auditor will perform the assessment only, some of the retrofit work or the whole shebang, they should recommend all of the appropriate improvements and prioritize them by cost-effectiveness, says Larry Zarker, of the Building Performance Institute. If you want to get multiple bids for the work, look for BPI-certified contractors.

Waterworth says the most typical issues he encounters are air leakage in the outer shell of the home, air leakage and resistance to airflow in heating and cooling ductwork, negative air pressure in the home that invites outside air (including polluting particulates) to infiltrate, and poorly installed insulation that doesn’t meet its performance rating (R-value). He says his customers’ typical cost to retrofit is $9,000 to $12,000.

At a starting point for especially budget-conscious homeowners, some utilities provide free “audits,” but they are typically very limited in scope. Or you can try online tools, such as Energy Star’s “Home Energy Yardstick.”

Federal and municipal credits and rebates for efficiency improvements

With massive funding provided to the states by the Inflation Reduction Act, low-to-moderate-income households can get rebates covering 50% to 100% of the cost of installing new high-efficiency, electric appliances, such as induction cooktops or heat-pump clothes dryers.

All households, regardless of income, can take a tax credit that will cover 30% of the cost to install solar panels and battery storage systems, make home improvements to reduce energy leakage (with an annual limit of $1,200), or upgrade HVAC equipment.

For more information, visit DSIRE, “The database of state incentives for renewables and efficiency” searchable by zip code. As an alternative, check the websites of your state’s energy department and local utility providers.

Esswein joined Kiplinger in May 1984 as director of special publications and managing editor of Kiplinger Books. In 2004, she began covering real estate for Kiplinger's Personal Finance, writing about the housing market, buying and selling a home, getting a mortgage, and home improvement. Prior to joining Kiplinger, Esswein wrote and edited for Empire Sports, a monthly magazine covering sports and recreation in upstate New York. She holds a BA degree from Gustavus Adolphus College, in St. Peter, Minn., and an MA in magazine journalism from the S.I. Newhouse School at Syracuse University.