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You might want to have a energy assessment done through a program such as Home Performance with ENERGY STAR or a utility-specific program in your area. WIndows often cost a LOT (for a quality product) compared to the amount of energy they can save. So if they are physically falling apart, you definitely need to replace them. If you can't open them, its a problem! If air blows though them, its a problem. A little frost is commen in a northern climate. A qualified energy assessor can help you determine the value in replacing them compared to other things in the house that you might also need to fix and not even know about! Air leakage is the biggest source of heat loss in most cases, and needs to be fixed before insulation can be added.
In most homes, the neccesity of new windows does not usually crack the top 3 in terms of energy efficiency improvements.
You can usually get more efficiency mileage and bang for your remodeling dollar from othere retrofits (air sealing, insulation, etc.).
That being said, insulation does not improve the visual resale of the home or make the home prettier from the curb. Windows have tangible impact on resale and on brightening up the home's exterior.
One thing that is never accounted for in energy modeling when comparing existing windows to replacement windows is the net improvement in air tightness. This improvement can often times supercede the impact on the homes efficiency as compared to the total unit R-value improvement.
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