Prius vs. Home Energy Retrofit

The Face-Off: The Prius vs. Home Energy Retrofit

So, how does buying a Prius vs. doing a home energy retrofit compare in terms of reducing your carbon footprint and what is the return on investment on each?

Our team did some research and it turns out that it's a tough question to answer. Since each of us is different — we live in houses that are newer or older, drive more or less each year, and have different MPG ratings in our current cars — what might be the greener choice for your neighbor might not be the best one for you. So we decided to crunch some numbers and look at a few cases to see when each makes the most sense. It's pretty much impossible to come up with exact numbers or broad consensus on much of this number crunching, but we hope this helps you think about how to be more energy savvy and to reduce your carbon footprint on the road and at home.

And before the Toyota marketing department gets all excited, we're not endorsing or picking on the Prius in this analysis — we're using the Prius as a symbol of being more fuel-efficient with your transportation. We could have done the same calculations with any fuel efficient car.

Round 1: Megan — An average driver living in a 1990's house

Megan drives 12,000 miles/year in a car that gets an average of 23 mpg and lives in a house built in 1992.

If she buys a Prius:

Buying a new Prius, at 46 mpg, would double Megan's fuel efficiency on the road. Assuming her driving behavior doesn't change, she would use 267 fewer gallons of gasoline per year and reduce her carbon footprint by 1,530 pounds of carbon per year. With gas at $3 a gallon, this will save her $800 in fuel costs: providing her with an annual 3.2% return on her $25,000 investment of her new Prius. From a carbon footprint perspective, Megan will not begin making a true reduction in her carbon footprint for almost four years. Why? Well, the manufacturing of a new Prius is an energy intensive process — the equivalent of consuming 1000 gallons of gasoline. So, for Megan to "pay off" the carbon "debt" associated with the production of the new Prius through her fuel savings will take nearly four years.

Cost-Benefit of a New Prius for Megan: $25,000 invested, 3.2% ROI, annual carbon savings 1,530 lbs starting in year five. If she keeps the car for 7 years, the average annual carbon savings is 655 lbs per year.

If she does a home energy upgrade:

In a 1990's era home, comfort and indoor air quality issues are common, and duct sealing is typically the single greatest opportunity for energy savings, followed by air sealing and improvements in the ventilation system. In a house of this era, it is reasonable to expect from 10%-30% improvement in energy efficiency from a $3,000 investment. So, let's say Megan consumes 12,000 kw hours (average residential consumption) of electricity per year in her home. At 10 cents per kWh (the national average), a 20% improvement in the overall energy efficiency of this home will save her 2,400 KwH of electricity per year, or $240. This will give her an 8% return on her $3000 investment. Assuming coal is the primary fuel source of the electricity she consumes, this will prevent 1,360 pounds of carbon from entering the atmosphere.

Cost-Benefit of an Energy Retrofit for Megan: $3,000 invested, 8% ROI, annual carbon savings 1,360 lbs.

P.S. — Megan might have been able to save a big chunk of that initial investment if she took advantage of all the tax credits for her retrofit, making it an even better investment.

Which is a greener choice?

In this case, an audit and retrofit of her house will provide Megan — an average mileage driver in average mileage vehicle living in a newer house — with a greater return on her investment and nearly the twice the reduction in her carbon footprint as buying a Prius, for 1/8 the cost.

We left out lots of more detailed factors on both sides — in an attempt to simplify the numbers. If you think we missed something important, or you're in Toyota's marketing department and you want to argue with us, contact us and share your thoughts.

Chapter 2: John — A high-mileage driver living in an older house. Note to Toyota: The Prius does better next time. Don't hurt us!