Dear Pablo: I had a home energy audit done and they recommended insulating my pipes. The estimated cost was quite high and I wonder, is it really worth it?
Insulating the pipes that carry hot water from your water heater to your various faucets is quite a simple undertaking, assuming that you have easy access to the pipes. Pipe insulation is available as polyethylene or neoprene foam as well as fiberglass wrap. Pipe insulation is inexpensive (under $2 per 6 feet for the foam insulation) but, if you are not installing it yourself, hired labor will increase the overall cost.
A few years ago I had a home energy audit done as well and pipe insulation was one of the recommendations. The primary benefits include reducing the convective heat loss from pipes, increasing the delivered water temperature by around 4 degrees, and allowing you to turn the water heater down, which saves energy.
What Are The Savings From Insulating Your Pipes?
For every 10deg; F reduction in your water heater's temperature setting you can expect to reduce your cost by 3-5%. If we assume that insulating your pipes will allow you to reduce your water heater temperature by four degrees without having any noticeable reduction at the tap, we can assume a cost reduction around 2%. The average household spends $400-600 per year on water heating, so this reduction represents only about $8-12 per year.
The economics of having your pipes insulatedMy home energy audit report provided an estimate for insulating my hot water pipes, $680. Quotes provided by energy auditors are often subcontracted and somewhat above the industry norm due to the associated markup. Going directly to the contractor, or even hiring a local "handyman" to do the work would cut the cost quite a bit. Even if you can find someone to do it for $100, the cost hardly justifies the $8-12 annual savings, giving you a 10 year return on your investment (or 68 years if you go with the energy auditor).
The economics of DIY insulationWhile paying to have someone insulate your pipes seems hardly worth it, doing it yourself makes a lot of sense. I recently insulated my own pipes and it cost very little and has a great financial ROI. Since I was going to my local hardware store already and had to go into my crawlspace anyway I decided to pick up some pipe insulation and tackle this project myself. I paid $9.52 in materials and expect to save about $10 per year, so a 1 year payback. In addition to the economics there are other benefits that I will enjoy. These include the fact that the hot water in my pipes will remain warm longer between uses than without insulation (which is much cheaper than installing and operating a hot water recirculation pump) and that the sounds from my pipes expanding and contracting with changes in temperature will be decreased, due to slower heat loss.
In conclusion, insulating your pipes does make economic sense, if you do it yourself. Using a contractor rarely makes economic sense in most homes, unless the fuel used for heating water is very expensive, the distance traveled by the pipes is far, the pipes are exposed to very cold air (in which case they should be insulated anyway to prevent freezing), and if the household uses a lot of water. Of course, in new construction it almost always makes sense to insulate your pipes while they are easily accessible. Since many commercial and large-scale residential facilities meet these conditions, insulation usually makes good sense.
Installing tank-less water heater nearer to the point-of-use can allow for the complete elimination of hot water pipes and eliminates the associated heat loss. Tank-less water heaters can be more expensive than traditional tank water heaters, especially if you require several of them, but make a lot of sense where the point-of-use is far from the water heater. This not only saves energy, but also saves water that would normally be wasted by waiting for the hot water to arrive.