New research from epIMS, the energy efficiency and EPC platform designed for landlords, examines the financial viability of energy-saving measures in rental properties.
The analysis reveals the timeframes required to recoup costs for various improvements, with some solutions offering a payback period as short as six months.
Improving a property’s energy efficiency can range from simple, low-cost measures to complex, high-cost installations.
These upgrades not only reduce energy consumption and household bills but also enhance EPC ratings.
RETURN ON INVESTMENT
epIMS’ analysis evaluates annual financial savings to determine the quickest return on investment (ROI) for landlords.
Insulating Hot Water Tanks: ROI in Six Months
Installing a hot water cylinder jacket is a cost-effective way to prevent heat loss and save energy. With an average price of just £25 and annual energy savings of £45, landlords can recover their investment in only six months.
Switching to LED Lightbulbs: ROI in One Year
Replacing traditional halogen bulbs with LED alternatives can significantly reduce energy consumption. At an average cost of £3.75 per bulb, a full-house switch (34 bulbs, £127.50 total) yields an annual saving of £119, allowing the initial outlay to be recouped within just over a year.
Smart Thermostats: ROI in Two Years
Smart thermostats, priced between £120 and £220 depending on the model, enable a 10% reduction in heating bills. Based on the average annual gas bill of £834.26, the annual saving of £83.43 ensures landlords recoup the cost within two years.
Draught-Proofing: ROI in 6.25 Years
Professionally installed draught-proofing, costing around £250, helps retain heat by sealing gaps around windows and doors. With estimated annual savings of £40, this measure achieves payback in 6.25 years.
Roof/Loft Insulation: ROI Varies
For properties without any insulation, installing 270mm of roof insulation costs approximately £1,012 and delivers annual savings of £295, yielding a payback period of 3.4 years. However, for properties already equipped with 120mm insulation, upgrading to 270mm offers minimal additional savings (£27.25 annually) and extends the payback period to nearly 29 years.
High-Cost Measures with Extended ROI
While some energy-saving investments take decades to pay off, they may still hold value for long-term property improvement:
Boiler Upgrades: With an average cost of £3,000, it takes over 15 years to recover expenses through savings.
Secondary Glazing: Requires nearly 42 years to achieve payback.
Double Glazing: Payback period averages 43 years, making it a costly upfront investment.
RANGE OF OPTIONS
Craig Cooper, Chief Operating Officer of epIMS, says: “With a wide range of options available, landlords must identify where the greatest potential for improvement lies.
“High-cost measures, such as double glazing, may take decades to offer financial returns. Understanding a property’s efficiency weak spots allows landlords to make informed decisions and prioritize cost-effective upgrades.”
Cooper also highlights the dual benefit for landlords seeking to enhance EPC ratings: “By addressing efficiency weaknesses strategically, landlords can achieve compliance with regulatory standards while keeping improvement costs manageable.”
