Start with incremental cost
If you must buy an appliance anyway, compare the efficient model’s additional purchase price—not its entire price—with the annual operating savings. Replacing a functioning appliance early requires comparing the full replacement cost and remaining useful life.
Simple payback
Core formulaPayback years = additional purchase cost ÷ annual energy savings
Simple payback is easy to understand, but it does not account for financing, repair risk, energy-price changes, resale value, or the time value of money.
Use three scenarios
Calculate conservative, expected, and high-usage cases. A robust purchase usually remains sensible across the range. If the conclusion changes with a small assumption, measure your current device before buying.
Run your own scenario