Energy saving home improvement projects are fast becoming one of the most popular home improvement undertakings on the market. They aren’t cheap, however. Installing energy efficient furnaces and air conditioners, improving insulation and replacing old windows with more efficient varieties can cost a pretty penny, leaving many homeowners asking themselves whether shelling out all that dough is really worth it.

The answer is yes
It may take a bite out of your savings, or even require you to look into financing to pay for it, but projects like these can be a no-brainer from a financial standpoint. Take the examples above. Installing energy efficient furnaces and air conditioners can cut down on a home’s energy consumption by 50%, and new energy efficient windows can save a homeowner $300-$400 a year. Extend those savings a few years down the road and it’s easy to see that these home improvements can quickly pay for themselves.

Why stop with the little stuff?
Of course, furnaces and double pane windows are only scratching the surface of energy efficient home improvements. Green building has moved from the fringes to center stage when it comes to large-scale home improvement projects and home building, meaning even larger investments are possible. From solar energy to energy efficient architectural design, you can make a substantial invenstment in energy efficient living with larger home improvement projects.

How to pay for energy efficient home improvements?
As mentioned, energy efficient home improvement isn’t cheap. This is a front loaded investment with huge returns down the line, but you’ve still have to figure out how to pay for it now. If you’re lucky you’ve built up a substantial nest egg that you know you’ll be able to replenish quickly with money you save energy wise. Barring that, however, financing your project may be the best way to go. Borrowing money may make you uneasy, but remember to look at your home improvements as an investments and to calculate the value they’ll add to your home and the cost savings they could bring.

Financing smaller projects
For more modest energy efficient home improvement undertakings, you may want to look into unsecured financing options. You don’t need a lot of equity to secure these loans, making them perfect for new homeowners or homeowners who want to preserve the equity they already have. And because small loan amounts are more easily paid off in shorter amounts of time, the higher interest rates that are common with these loans won’t hit you so hard in the long run.

Financing bigger projects
If you’re looking at a bigger renovation, such as a green addition or installing solar energy panels to your home, you’ll probably want to obtain secured financing if you can. Secured loans are loans that are secured against a tangible asset, usually the equity you’ve built up in your home. As a result, they usually have lower interest rates and can be drawn out over longer terms, both of which lower your monthly payments and make larger scale home improvements reasonable for an average homeowner. Cash out refinances, home equity loans and home equity lines of credit are all examples of secured loans commonly used for financing larger energy efficient home improvement projects.