Economics of Energy Efficient Electrical Appliances Used in Homes

In the United States, the residential sector accounts for 21% of all energy use. The adoption of energy efficient appliances can, in part, help reduce energy consumption in the residential sector. In turn, such reduction will lead to lower monthly utility bills, as well as lessening the carbon footprint formed as a result of residential energy use. The literature, as well as green building guidelines, such as LEED V4 for homes, recommend the use of energy-efficient appliances. However, the initial cost of these appliances can be significant. As such, there is a need to assess the economy of replacing traditional appliances with energy-efficient ones to ensure the financial feasibility of such approach. This paper presents a preliminary framework that defines and describes the interrelationship between the main parameters needed to calculate life-cycle costs in accordance with life-cycle cost analysis guidelines. Using this output, the financial feasibility of investing in energy-efficient home appliances can be determined. This paper should prove useful for promoting the use of green and energy efficient appliances at homes.