We recently bought a new home that came with appliances. Unfortunately, they came with the same appliances that would have been installed when the house was built in the late 70s. They are not, to say the least, energy efficient appliances. I like to think that when we turned the dryer on, not only would our lights dim, but the whole neighbourhood would sense a loss of power while the dryer started to turn. So one of the first things that we did was start looking and shopping for some more energy efficient appliances. New technology that focuses on keeping energy costs low can save you a ton of money on a yearly basis – but just how much money are we talking about? Is it worth investing money upgrading to energy efficient appliances now or should you wait out the lifespan of your current appliances? Let's take a look at the numbers.

Energy Costs

Electricity costs money. Where you live and how much you use will determine your actual electricity bill each month, but you'll end up paying something to use your fancy new appliances. Appliances have two costs. The first is the upfront price that you pay in order to get the appliance into the home. The second price that you pay is the cost to run that appliance over its lifespan. These costs, depending on the device, may not be very much on a daily, or monthly basis, but if you consider that most large appliances will last around a decade, we're taking about 10 years of owning and operating a major appliance that can vary vastly in energy costs.
Even brand new models can have very energy efficient and inefficient models. For example, a clothes dryer in 1990 used on average 1103 kWh/year. At my current local costs, that would be about $75/year to operate. The appliance that I just bought is rated for 964 kWh/year. Not a giant difference, but still technically Energy Star, and it drops the yearly cost down to about $65/year. It's only $10/year, but over a decade that'll save us another $100. You see a much bigger difference when you look at a clothes washer. Again, in 1990 the average top loading clothes washer used about 1200 kWh/year. The clothes washer we just bought is rated at 97 kWh/year. That is not a typo, that is less than 1/12 of the operating costs of a 20 year old washer. That amounts to a whopping $76/year in annual savings, and over that 10 year span, will save us over $750, more than paying for the cost of upgrading our washer.

Water Costs

The savings from the new washer we purchased continue. Because it is a front loading washer we will save a ton of water as well. Purchasing an Energy Star washer will save us 35-50% on water costs over a non-Energy Star washer. I can't imagine the savings over a top loading washer from the 70s. The simple fact is that the technology of washers especially has improved so much that a front loading washer is immensely more efficient at cleaning clothes than old technology is capable of. Sure, you may be able to get a top loading washer for cheap or free off of craigslist (I know, because mine is up there for sale right now), but the operating costs of the machine just don't make sense when you consider the long term investment.

Government Rebates

Finally, don't forget that a lot of energy providers will provide rebates for purchasing energy efficient appliances. Check with your local companies for the details, but applying for a rebate on your energy efficient appliances can bring $25-100 back on your energy bill if the model that you purchased qualified. Here in BC, for example, you can get $25-75 back from purchasing specific Energy Star devices. You simply print and fill out a simple form, attach some information about the device that you purchased, and you'll get a rebate cheque back in the mail in a couple of months. Not too much work and it lowers the cost of purchasing new appliances.
So should you purchase a new set of major appliances in order to take advantage of all the potential cost savings? Maybe. If you have an old top loading washer, yes, if you can afford to take the plunge most definitely consider upgrading that appliance as a 20 year old washer will cost you a ton of money compared to a new and efficient one. Not only will it be easier to wash your clothes, it'll be less expensive to do so. However, if you have an older dryer, fridge, or stove, you may not be able to save much by upgrading to a new model. They should look nicer, but they're not vastly more energy efficient – at least not yet. If it is time for those appliances to go, however, consider the “second cost” of your appliance purchases and check the energy rating on all appliances that you consider buying. Paying a little more upfront could save you a lot more in the long term.
What appliance upgrades are you considering?

About Alan Schram

Alan Schram writes about personal finance and his encounters with it in his everyday life. Alan is recently married and is looking to save money on expenses and reduce his debts.