Payback Time

Question 1

What is the equation for payback time?

Answer 1

payback time (years) = cost of installation (£) ÷ savings per year in fuel costs (£)

Question 2

Give an example…

Answer 2

Question
The double-glazing for a house costs £3,000 but saves £150 per year in fuel costs. What is its payback time?
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Answer
payback time = 3,000 ÷ 150 = 20 years

Question 3

What is payback time?

Answer 3

The payback time of an energy-saving solution is a measure of how cost-effective it is.