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How Much Could You Save by Insulating Your Home?

Save money and increase your home's market value by upgrading your insulation.

Attic insulation iStock

The fall months bring all sorts of fun—colorful foliage, festive holidays, the first cozy snowfall. But one feature that’s not so fun? Increased energy bills as the temps cool down and the thermostat gets cranked up.

According to the U.S. Department of Energy, 49% of a home’s energy bill is spent on heating and cooling. One of the main reasons your energy bills might spike during the winter months (and summer, too, when the AC’s on) is because your home isn’t properly insulated. A well-insulated home is a surefire way to help keep your power bill manageable and an energy-efficient home is better for the environment, too. So how does home insulation reduce energy bills? Let’s take a look.

What is Home Insulation?

Any insulation aims to accomplish the same goal: to reduce the transfer of heat into or out of your home. There are many different types of insulation materials (fiberglass, polystyrene, mineral wool, etc.) and methods of applying it (spray-in foam, loose-fill, rolls of batting, and more), and the right sort of insulation depends on your home and needs.

How Does Insulation Work?

It’s a straightforward concept: Insulation works by trapping tiny pockets of air to slow down the movement of heat out of the house in the winter and into the house in summer. How well it does this is measured by a number called “R-value,” and the higher the number, the better the insulation is at resisting heat transfer—assuming it’s installed correctly, that is.

Do You Need New Insulation?

According to the North American Insulation Manufacturers Association (NAIMA), 90% of single-family homes in the U.S. are under-insulated, so chances are high that your house could use some work. Homes built prior to 1960 are particularly vulnerable.

The best way to determine if your insulation is up to snuff is to evaluate your existing insulation (its type and thickness) to compare its R-value to the U.S. Department of Energy’s recommendations for your location.

Some ways to do this include looking at any unfinished walls and ceilings to see if they’re insulated, or removing an electrical outlet cover and poking around the surrounding wall cavity (make sure the electricity is off). It’s also a good idea to look for physical signs of poor insulation:

  • Does the temperature vary greatly from room to room (which could signal an issue in one part of the house)?
  • Are your power bills extremely high when heating or cooling your home?
  • Do you get icicles hanging from your rooftop in the winter (a potential sign of an inadequately insulated attic)?
  • You should also check for drafts, which are a sign of air leakage, often around a window or dryer vent—(better insulation won’t matter if you have leaks). For professional results, you can have a qualified home energy auditor conduct a whole-home energy assessment, which will include an insulation check.

Home Insulation Cost vs. Energy Savings

While some may balk at the expense of quality insulation—upgrading an attic can cost $1,000 to $2,000 or more—the expenditure should pay off. "It's the wisest way to invest that I know of," says This Old House general contractor Tom Silva. "A well-insulated house will make you more comfortable in every season. And it's quieter, too."

The EPA estimates that the average homeowner can save 15% on heating and cooling costs (11% of total energy costs) by adding insulation in attics, crawl spaces, and basement rim joists. For most folks, that’s about $200 in savings per year. In colder parts of the country, like climate zones six and seven, savings increases up to 20%. With the average cost of most insulation types hovering around $0.20 to $0.50 per square foot, you can do the math to understand the savings you’d see over time after upgrading your home’s insulation.

Here’s another reason: A well-insulated home often commands a higher market value. Recent studies estimates that there’s generally at least a break-even return on investment regarding your home’s value after installing fiberglass insulation in the attic. Additionally, you may be eligible for tax incentives to help finance the upgrade; though these are subject to change, so it’s best to speak with a qualified tax preparer to understand current regulations.

Where to Install Insulation in Your home

Conducting an energy audit of your home will give you the best idea of where to focus your insulation upgrades. Though for most homes—again, especially those built before 1960—it’s safe to say that the attic is the place to start.

You’ll want to install insulation in the space between and over the floor joists to protect the living spaces below. You’ll also want to make sure all exterior walls, walls between the home and unheated spaces (like an attached garage), and floors above unheated spaces (such as crawlspaces) are properly insulated.

It’s also important to seal any drafts, such as those around windows and door frames, or from your dryer vent or fireplace.

Is Upgrading Your Insulation Worth It?

For most homeowners, upgrading an under-insulated home is well worth the expense. It’s an improvement that will pay off in both reduced energy bills and improved home value—plus, there’s the added benefit of reduced greenhouse gas emissions. Take the time to evaluate and develop a plan that’ll leave you with a properly sealed and insulated home.

Looking for more help with repairs around your home? A home warranty may help. Check out the This Old Houses Reviews Team’s in-depth reviews on: