Weatherization Memorandum 123: Discount Rate for Cost-Effectiveness Calculations

Weatherization Assistance Program (WAP) regulations (10 CFR 440.21) require that “each individual weatherization material and package of weatherization materials installed in an eligible dwelling unit must be cost-effective…, discounted to present value.” Weatherization Program Notice (WPN) 23-6 Revised Energy Audit Approval Procedures provided guidance on the necessary calculations for making this determination, including verification that Grantee’s energy audit incorporates future savings using an appropriate discount rate.

The Office of Management and Budget (OMB) updated discount rates on November 9, 2023. The new rate is provided per OMB Circular A-4 and directs two percent (2%) be used for the discount rate effective March 1, 2024.