What's better (first)? Solar, High efficiency furnace, or air sealing and insulation?

When it comes to the best bang for your buck (greatest savings for the money spent), which is better?  Solar panels on your roof, upgrading to a high-efficiency furnace, or air sealing the big leaks in your house and insulating your attic properly?  I am highly qualified to answer this question for you.  If you want to skip the technical explanations, just go to the last sentence.

Solar – I own five large solar installations (on 4 of our 14 buildings and on my home.  I love the idea of getting free electricity from the sun.  BUT, there are many issues.  First, it’s expensive.  Spending $20,000 or $35,000 is a lot.  But what about the financing – the cost of the money if you don’t pay cash?  A solar salesman won’t explain that you will pay more for interest on a 25-year mortgage for the solar than you will for the solar. 

The Rule of 72 says that the amount of time it takes to double your money is the interest rate divided into 72.  So at 10% interest on a mortgage for your solar panels, you will pay as much for interest as you will for the solar in just 7.2 years at 10% if you were only paying interest.  Now, you are paying part of the principal on each payment, but the loan is for a lot longer than 7.2 years.  You have to save enough on electricity to pay for the panels AND all that interest.  By that time the panels will be beyond their useful life and stop working.

The next problem is that unless the panels are facing directly south at just the right angle with no trees (ever) around to shade the panels, they will not produce at their stated capacity.  That’s easy to understand.  Still, you see panels on opposite sides of roofs all the time.  East and west side?  Not good.  So, your payback is way longer.

The next problem is your roof.  Roofs need to be replaced every 25 years or so.  Sometimes sooner.  If you have solar panels, they have to come off, get your new roof, and have the solar panels reinstalled.  By the time you pay for all that, you will probably never save the cost of the panels.

Three feet of heavy snow collapsing your solar array….or the inverter going out and you not noticing your panels are no longer producing for months are other problems.  Ask me how I know…

So, the answer to the question posed is NOT solar.  Solar is good in principle, don’t get me wrong.  But from a practical perspective or a financial one, it’s not the first thing you should do.

How about a high-efficiency furnace?  

A basic furnace like the one in the house you grew up in was about 80% efficient.  This means that when it burns fuel like natural gas, it transfers 80% of the heat to the ductwork on its way to the rooms in your house.  The other 20% goes up the chimney.  

When you have a masonry chimney you NEED as much heat to go up it.  This is because you need to heat the chimney to create an updraft, and you don’t want the combustion gases cooling before they get out of the top of the chimney, otherwise, they will condense into water and run back down and make a mess.  And when winter comes the water will freeze and crack the masonry apart when the furnace shuts off.

A high-efficiency furnace bumps you up to about 94% efficient, losing just 6% instead of 20% out of the exhaust.  It has a secondary heat exchanger in it to squeeze out all the heat it can from the exhaust, which is now so cool it cannot use a masonry chimney, but can use a pvc pipe instead run out of the side of your house at ground level.  (In my house I tore my masonry chimney down once I installed a high-efficiency furnace AND water heater.  This made some more space in the basement and rooms upstairs. (It’s a big job.))

Ok, so we’ve established that we can get 14% more heat to the ductwork if we install a high-efficiency furnace versus an old 80% one.  Another advantage of a high-efficiency furnace is that it doesn’t take air from inside the building to use to combust the fuel and run up the chimney.  Instead, it has dedicated intake air through a second pvc pipe from the outside.  The advantage here is that it doesn’t depressurize the house by sending air up the chimney.  For every cubic foot of air that goes up the chimney, and new cubic foot of air has to leak in the building envelope somewhere to replace it – and this new air is cold and has to be heated.

But, while a high-efficiency furnace is a good idea, it’s still not the number one thing you should do to get the most results for the money spent.  

Air sealing and insulation is.

When you heat air and send it to the house via the ductwork, the house heats up and satisfies the thermostat and the furnace shuts off.  Well why does the furnace turn on again minutes later?  Answer – because the heat leaked out of the house!

Warm air rises and causes positive pressure between the top of the house and the attic and outside.  The warm air leaks out of the top of the house at any hole, leak, gap, or seam that it can.  This causes negative pressure between the lower parts of the house and the inside.  So cold outside air leaks in any holes, joints, or gaps at the bottom of the house.  

Besides that heat moves out molecule by molecule through solid materials that are not insulated well.  

Lastly, ducts leak – a lot.  The HVAC industry admits that ducts leak a whopping 47% of the air that is forced through them by the fan on the furnace – air you paid to heat.  And if the ducts are in the attic that is the most wasteful kind of leak because the attic is “outside” since it is vented.

If we stop air from leaking out at the top of the house, less air will leak in at the bottom (even if we do nothing at the bottom of the house) because less air needs to be replaced since less leaked out.  If we seal and insulate ducts in the attic it makes a huge difference in the amount of air delivered to the rooms and the temperature of that air.

What are some attic air leaks that need to be sealed?  There is a 2” gap all the way around your chimney, can lights in the ceiling, pipe, and wire holes, duct chases, seams between drywall and framing at the top of every wall, the attic hatch, around ceiling fans, and many other potential leaky building assemblies.  Knee wall spaces in cape cods and contemporary homes are very problematic, making the adjoining rooms cold in winter and hot in summer.

Once the attic is air sealed properly, then 17” of cellulose insulation )not fiberglass) is blown in.  That’s the amount you need.  It’s R60.  Most people have R19 or less now.

Air sealing and insulating costs far less than solar or a high-efficiency furnace.  The return on investment is far far higher.

Think about it.  If your house is leaky (and ducts are leaky) why spend lots of money on more expensive energy (solar is “free energy” but it costs $35,000 (or some such number plus 25 years of interest, so it is NOT free!) only to waste that more expensive energy on a leaky house?  And if heat doesn’t stay in your house very long, why worry about how efficiently you are extracting that heat from the natural gas (or other fuel) you buy?  Your furnace may be 80% or 94% efficient but you are running that heat into a 60% efficient ductwork into a 40% efficient house! 

Fix the house and the ducts first!  That is the answer.

It’s cheaper, faster (one or two days), you’ll save more money and have a higher rate of return, and it will make your home more comfortable with less drafts – something the other two options do not do.