# Payback period calculator

An appliance that uses less power is going to consume less electricity, there is nothing to argue here…

But, is it worth paying more money for an appliance that uses less power?

## Payback period of a home appliance

### What is the Payback period

The payback period refers to the amount of time that it takes to recover an investment.

For example, as shown in the image below, if you have to choose between a more expensive but more efficient appliance or a more economic but less efficient appliance, which one would you choose?

### Calculating the payback period of two appliances

You have to choose between two fridges:

– Fridge A: It uses 252 kWh per year and it has a prize tag of 899 euro

– Fridge B: It uses 174 kWh per year and it has a prize tag of 1159 euro

Fridge B is more efficient but also 260 euros more expensive than Fridge A so, which one do you choose?

The only way to make an informed decision is to figure out how much electricity you would be saving per year by choosing fridge B, and then calculating how many years it will take for those savings to compensate for the initial extra 260 euros.

We know that we are paying 0,217 euros per kWh (do you know what a kWh is?) so for us, that means that:

Fridge A will have a yearly electricity bill cost of  252 x 0,217 = 54,7 euro

– Fridge B will have a yearly electricity bill cost of  174 x 0,217 = 37,8 euro

For us, there is a difference of 16,9 euros per year in electricity cost between the A+++ and the A++ fridge.

That means that

– To buy the A+++ fridge we would be paying an initial extra 260 euro

– To recover that initial investment through the electricity savings it would take us 260/16,9 = 15,4 years…

Well, in this case, the payback period is far too long because nowadays a fridge does not last 15 years.

That means that for us it makes more sense to buy the cheaper and less efficient fridge.

## Payback period calculator

No need to struggle with complicated calculations. Use this online calculator to easily calculate the payback period of a home appliance.

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### Electricity usage calculators

A few other examples from our ‘Electricity usage calculators‘ page that may be of your interest:

## Energy conservation

Energy conservation can be defined as the decision and the act of using less energy

Energy conservation both benefits you and the environment

The act of saving and conserving electricity does benefit you because you will be paying less for your energy bills.

And it also does benefit the environment because conserving electricity prevents any unnecessary waste of natural resources.

Now, at the individual level, it may not look worth trying to save a few watts here or there.

Still, every little count and if hundreds or thousands of us do save a little every time, it will make an important contribution towards conserving our natural resources.

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For example, if 9000 households would manage to save as little as 10 Watts per day (0,01 kWh) that would add to 32850 Kilowatt hours (kWh) saved per year.

9000 households x 0,01 kWh per day x 365 days per year

32,850 kWh saved per year

That is a considerable amount of electricity, but let’s add additional perspectives for clarity:

> Assuming an average cost of 0,18 euros (or dollars, or pounds, or any other currency) per kWh, we would collectively be saving nearly 6000 euros per year.

> To produce 32,850 kWh of electricity it is necessary to use around 17 metric tons of coal or 56 barrels of residual fuel oil.

In any case, it is clear that small energy savings do really count when looking into the bigger picture.

### Proven ways to save electricity at home

If you are looking for saving electricity ideas at home, have a look at our electricity page and let us show you other ways to reduce your electricity consumption and save money on your bills.

Calculators

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