Above is Energy Star’s independent certification of 12353 Pinehurst Dr. showing an estimated cost savings of $2,878 annually in comparison to the typical existing home. The home is also 100% electric so you do not have a natural gas service fee . In Kansas that service fee is $15.35 per month, translating into $184 saved per year. Between the energy savings and no gas service fee, the homeowner saves $2,878 + $184 = $3,062 per year.
Over a 30 year mortgage, that’s a lot of money. It’s even more when you remember that energy costs are not fixed. According the the US Energy Information Administration, from 2002 to 2012 the average cost per kWh grew from 8.44 cents to 11.88 cents (table 2.4). That’s an inflation rate of 3.48%. The Kansas City eco non-profit, Bridging the Gap, published a great article on their website about our house highlighting just how much that saves you on your mortgage. Spoiler alert, it’s 37% per year.
How does all of this savings stack up to other houses though? Below is a chart comparing a 30 year mortgage for the Pinehurst house to a mortgage for an existing house using the savings estimate by Energy Star and an average energy inflation of 3.48%. At the end of a 30 year mortgage both houses will cost the owner approximately $220,000 even though the sales prices are nearly $100,000 apart. To view full size, click on the chart.
There is one last way to look at all of these savings. It’s money that you would not have if you lived in another house. 100% of that savings could be reinvested instead of spent every year. For our calculation, we will use the long term S&P 500 rate of return. As of 2013, the annualized rate of return over the previous 20 years was 9.22%. By assuming a 3.48% energy inflation and a 9.22% return on invested savings, the final tally at the end of a 30 year mortgage is $603,034 in savings. Click on the chart below to see what that looks like year by year.