How do you calculate the payback period of an energy-saving upgrade?
Short answer: Payback period (months) = upgrade cost ÷ monthly bill saving. Monthly saving = (old watts − new watts) × hours per day × 30 ÷ 1,000 × tariff. Example: replacing a 75 W fan with a 30 W BLDC fan used 12 hours a day saves 16.2 kWh a month; at 8 per kWh that is about 130 a month, so a 3,000 fan pays back in about 23 months.
| Upgrade | Watts saved | Typical payback |
|---|---|---|
| Ceiling fan → BLDC fan (12 h/day) | ~45 W | 1.5–2.5 years |
| 60 W bulb → 9 W LED (6 h/day) | ~51 W | 2–4 months |
| Old 1.5 ton AC → 5-star inverter (8 h/day) | ~400–600 W avg | 3–6 years |
| Electric geyser → solar water heater | ~1.5–2 kWh/day | 3–5 years |
Tip: Rule of thumb: upgrades with a payback under 3 years are usually worth doing; above 5 years only if the old appliance also needs replacing.
Using this calculator outside India? Outside India? Pick your currency at the top of the page and enter the per-kWh rate printed on your bill. Typical residential averages: USA 18.3¢/kWh (EIA, July 2026; California 33.6¢, Texas 15.9¢), UK about £0.25/kWh, Germany about €0.38/kWh, UAE about AED 0.23–0.38/kWh, Canada about C$0.13–0.20/kWh and Australia about A$0.30–0.35/kWh. The kWh result is the same in every country; only the cost changes.