First, may I say that the town building inspector in my town is totally cool. I was expecting him to tell me that I couldn't do what I wanted to do, or that it would be super complicated and expensive. He wasn't like that at all. He wanted my home to be safe, and then made all sorts of great suggestions on how to save money.
So... if I want to add a legal accessory apartment on the ground floor, I need windows to be large enough, low enough and slide side to side, so than a person can "egress" in case of fire. I guess that answers my question about if I should replace the windows!
Here is what I found out about windows in general... many people look to replace their windows first when inproving their energy efficiency. This isn't always (or even usually) the best place to start. Think about it: heat rises. Heat does not move side to side naturally, it wants to go UP.
Picture a straw in a soft drink. If you wanted to stop the action of soda coming out the top. Assume further that there are a few holes in the side of the staw (like windows), where soda is entering the straw. If you wanted to stop the action of soda coming out the top, should you plug the holes in the side or plug the hole in the top???
The correct answer is the plug the hole in the top. The top of your home is the attic. Attic insulation is often the cheapest, easiest way to increase your energy efficiency.
The best way to figure out where to put your money is to have an energy audit. I am doing that next week and will write about it when it is done.
So, I was going to put off replacing the windows. They are original, single pain, inefficient kind, but attic insulation was going to come first. Now I know that I have to replace the windows on the lower floor, so why not get an estimate?
So, I went to the Better Business Bureau and found a window company with an A+ rating. The companies website details the energy efficiency tax rebate - up to $1500! I am going for double pane, Energy Star rated windows. It is important to make sure that the windows are Energy Star for your part of the country! The standards are different, depending on the weather conditions.