Simple payback for energy savings
According to Approved document L, Conservation of Fuel and Power, Volume 2: Buildings other than dwellings, 2021 edition incorporating 2023 amendments, the term 'simple payback' refers to:
The amount of time it will take to recover an initial investment through energy savings, calculated by dividing the marginal additional cost of implementing an energy efficiency measure by the value of the annual energy savings achieved by that measure taking no account of VAT.
When making this calculation, the following guidance should be used:
- The marginal additional cost is the additional cost (materials and labour) of incorporating, for example, additional insulation – not the whole cost of the work.
- The cost of implementing the measure should be based on prices current at the date when the application is made to the building control body and be confirmed in a report signed by a suitably qualified person.
- The annual energy savings should be estimated using the National Calculation Methodology Modelling Guide.
- The energy prices that are current when the application is made to the building control body should be used when evaluating energy savings. Current prices are given on the BEIS website, at: https://www.gov.uk/government/collections/quarterly-energy-prices.
Typically, an initial investment, in for example the achievement of U-values, will be considered economically feasilble if the simple payback period is not greater than 15 years. However, other periods may be considered economically feasible for other elements.
[edit] Related articles on Designing Buildings
Featured articles and news
Future Homes Standard Essentials launched
Future Homes Hub launches new campaign to help the homebuilding sector prepare for the implementation of new building standards.
Building Safety recap February, 2026
Our regular run-down of key building safety related events of the month.
Planning reform: draft NPPF and industry responses.
Last chance to comment on proposed changes to the NPPF.
A Regency palace of colour and sensation. Book review.
Delayed, derailed and devalued
How the UK’s planning crisis is undermining British manufacturing.
How much does it cost to build a house?
A brief run down of key considerations from a London based practice.
The need for a National construction careers campaign
Highlighted by CIOB to cut unemployment, reduce skills gap and deliver on housing and infrastructure ambitions.
AI-Driven automation; reducing time, enhancing compliance
Sustainability; not just compliance but rethinking design, material selection, and the supply chains to support them.
Climate Resilience and Adaptation In the Built Environment
New CIOB Technical Information Sheet by Colin Booth, Professor of Smart and Sustainable Infrastructure.
Turning Enquiries into Profitable Construction Projects
Founder of Develop Coaching and author of Building Your Future; Greg Wilkes shares his insights.
IHBC Signpost: Poetry from concrete
Scotland’s fascinating historic concrete and brutalist architecture with the Engine Shed.
Demonstrating that apprenticeships work for business, people and Scotland’s economy.
Scottish parents prioritise construction and apprenticeships
CIOB data released for Scottish Apprenticeship Week shows construction as top potential career path.
From a Green to a White Paper and the proposal of a General Safety Requirement for construction products.
Creativity, conservation and craft at Barley Studio. Book review.
The challenge as PFI agreements come to an end
How construction deals with inherited assets built under long-term contracts.
Skills plan for engineering and building services
Comprehensive industry report highlights persistent skills challenges across the sector.
Choosing the right design team for a D&B Contract
An architect explains the nature and needs of working within this common procurement route.
Statement from the Interim Chief Construction Advisor
Thouria Istephan; Architect and inquiry panel member outlines ongoing work, priorities and next steps.