Last edited 19 Dec 2020

Simple payback for energy savings

According to approved document L of the building regulations, in relation to the conservation of fuel and power, 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:

Typically, an initial investment, in for example the achievement of U-values, will be considered economically feasilbe if the simple payback period is not greater than 15 years. However, other periods may be considered economically feasible for other elements.

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