Vinyl siding has weatherproofing on its outer surface. Over time, the weatherproofing wears down due to sun, rain, wind, and age. If the color of your vinyl siding has faded considerably, this indicates that the weatherproofing is wearing out. Severe fading doesn’t mean that your siding isn’t doing anything, but it is an indicator that you should replace it soon. If you paint your siding, there is a different way to tell that you need to replace it. Typically, you should need to repaint your house every 7 to 10 years. If you need to do it more frequently—every 3 to 5 years, for example—that tells you it’s time to replace your siding.
Increased energy usage could be due to a lot of things from roof leaks to old windows. But those problems are pretty easy to rule out. If your windows are fine and your roof doesn’t leak, it could be that your siding isn’t insulating your house very well anymore. If it’s been 15 years or so since you got new siding, it could be time to replace it.