Energy conservation – the concept of reducing energy consumption through the minimization of activities that consume energy – is often confused with energy efficiency. The main difference between the two concepts is how much you have to alter your behavior.

Energy efficiency doesn’t require you to change your habits

Energy conservation calls for a certain degree of sacrifice, such as using the clothes dryer less often or turning down the heat in the winter. Energy efficiency, on the other hand, maintains the same amount or quality of output while using less energy. Instead of turning down the heat, you can install an energy-efficient furnace to keep your house at a certain temperature while consuming less energy than you would with a conventional one. Energy efficiency does not inconvenience you with inhibition restrictions, and it requires no change in behavior on your part to reduce your utility bills.

Energy efficient options are worth the investment

Another misconception is that energy efficient options are not worth buying because they are more expensive than their conventional alternatives. Indeed, efficient options, whether for appliances or home specifications, often come with a high price tag. However, energy efficiency should be considered an investment that accumulates savings over time, rather than a typical purchase that is evaluated based on up-front costs.

The utility bill savings generated over the lifetime of an energy efficient upgrade have the potential to offset the total purchase price and can even generate a positive return on investment (ROI). In addition, a long-term energy efficient installment can add value to your home upon resale.

According to the 2018 Cost vs. Value Report, an attic insulation renovation earns a 107.7% return on investment on average when you sell your house. In the Pacific region, the same investment earns over a 122.8% return upon resale. In contrast, conventional options offer lower up-front prices but require more frequent replacements and generate higher utility expenses, diminishing the benefits of saving on the sticker price.

Big energy savings require a significant investment

A common misconception about energy efficiency is that replacing a couple appliances will result in significant savings. For substantial utility savings, you should consider a holistic approach that strategically targets the most significant sources of energy waste in your home or business.

For example, electricity consumed by appliances that are turned off or in standby mode, known as the “phantom load”, can add $100-$200 to your annual utility bill. While your first instinct might be to replace appliance with a more energy-efficient version, consider first using a smart power strip. Smart power strips prevents plugged-in appliances from drawing power by turning off when it senses the appliances are not in use, and effectively eliminates their phantom load.


Another example is installing an energy efficient furnace or air conditioner. While installing an energy efficient HVAC system can reduce your energy bills, your savings will be smaller if your home is not sufficiently air sealed or insulated because it will take more energy to maintain the interior temperature at any given level.

The price of a holistic approach to energy efficiency may seem daunting, but keep in mind the potential savings and home value appreciation from such upgrades. The Department of Energy estimates that you can save about 30 percent on your annual utility expenditures through comprehensive home improvements.