Alabama - Building Energy Codes

Table A.8.
Impacts to Consumers’ Cash Flow from Compliance with 2009 IECC Compared to the 2006 IECC
Cost/Benefit Zone 2
Zone 3 –
North of
Warm Humid
Zone 3 –
Warm Humid
State Average
A Down payment and other upfront costs $132 $131 $111 $126
B Annual energy savings (year one) $173 $177 $139 $168
C Annual mortgage increase $72 $71 $60 $68
D
Net annual cost of mortgage interest
deductions, mortgage insurance, and $0 $1 $0 $1
property taxes (year one)
E
=
[B-(C+D)]
Net annual cash flow savings (year one) $101 $105 $79 $99
F
=
[A/E]
Years to positive savings, including upfront
cost impacts
2 2 2 2
Note: Item D includes mortgage interest deductions, mortgage insurance, and property taxes for the first year. Deductions can partially
or completely offset insurance and tax costs. As such, the "net" result appears relatively small or is sometimes even negative.
Table A.9.
Impacts to Consumers’ Cash Flow from Compliance with 2012 IECC Compared to the 2006 IECC
Cost/Benefit Zone 2
Zone 3 –
North of
Warm Humid
Zone 3 –
Warm Humid
State Average
A Down payment and other up-front costs $307 $343 $298 $327
B Annual energy savings (year one) $380 $509 $395 $462
C Annual mortgage increase $166 $186 $161 $177
D
Net annual cost of mortgage interest
deductions, mortgage insurance, and $1 $1 $1 $1
property taxes (year one)
E
=
[B-(C+D)]
Net annual cash flow savings (year one) $213 $322 $233 $284
F
=
[A/E]
Years to positive savings, including upfront
cost impacts
2 2 2 2
Simple Payback
Table A.10 shows the simple payback period, which consists of the construction cost increase divided by firstyear
energy cost savings. This calculation yields the number of years required for the energy cost savings to pay
back the initial investment. Simple payback does not consider financing of the initial costs through a mortgage
or favored tax treatment of mortgages.
As Table A.10 shows, the simple payback period from moving to the 2009 IECC from the 2006 IECC averages 7
years across climate zones. The simple payback for the 2012 IECC is slightly faster, averaging just 6.6 years. The
2012 IECC has significantly higher energy cost savings, resulting in a shorter payback period. Most notably, the
A.8 April 2012