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How do I calculate the payback period for additional insulation?

Mark Gardiner | Posted in Energy Efficiency and Durability on

Location: Western NC, zone 4, mixed humid
Elevation 2000 ft
Roof: slope 2:12, standing seam.
Attic: formed with trusses and unvented
House roof insulation: Polyiso nailbase R15 min above the deck, netted BIBs below.

This follows on from a question I asked on June 30. We will insulate below the roof deck with BIBs. The cost of adding nailers, netting etc for the insulation is the same if we add the minimum thickness or if we add more. I can add another 1.75″ for $500 to increase the R value from R23 to R30.

I have read some very good articles on this site about calculating the feasibility of additional insulation and I know roof insulation is one of the better places to add more but I don’t know how to get the raw numbers.. We will have a ground source heat pump system. Heating costs will exceed cooling as we get cool night time breezes in summer, we may run a wood fire in winter and on and on.

Is there a simple rule of thumb to apply here to make this simple? Or an online calculator?

Thank you all for your time.

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  1. Dana1 | | #1

    Payback calculations are never simple. To get "reasonable" approximations you have to know the heating and cooling heating degree days of the location/climate and estimate the energy costs over some reasonable lifecycle, and calculate the U-factors of the assemblies being insulated with or without the enhancements, with some reasonable assumptions on energy price inflation or deflation, as well as an interest rate/discount rate for the up front money using a net-present value methodology. There are online NPV calclulators and spreadsheet tools, but if you don't know how to use them they're not very useful. The efficiency of the heat pump system is also a big unknown, and largely in the hands of the system designer. A really great state of the art system done by a competent designer vs. a so-so installer will likely make a bigger difference in energy use and system maintenance cost than the "extra" 1.5" of fluff which can skew the financial payback by a decade or more. (It's shockingly common for ground source heat pumps to underperform, but a LOT due to sloppy design &/or implementation.)

    That said, R20 + R15 continuous insulation isn't quite IRC code min (R49) for roofs & attics in zone 4 (but close) and R23 + R15 c.i isn't very close at all. Unless electricity & maintenance for the heat pumps is 5 cents/kwh or something there's surely a financial case to be made for bringing it up to R30 + R15c.i., but there may be other places where the $500 buys you more. But building at least an almost-code-min assembly seems "worth it" from a resale point of view, and has hedge value against energy price inflation or poor heat pump system design.

  2. GBA Editor
    Martin Holladay | | #2

    If you want to make a payback calculation like the one you describe, the first step is to use energy modeling software to calculate the annual energy use of your house. You need two such calculations: one with the existing insulation, and another with the thicker insulation that you are considering. Once you've done that, you'll know the energy savings per year provided by the insulation improvement.

    If you feel daunted by the complexities of this task, you can hire an energy rater to do the work for you. This type of calculation is a routine part of most energy audits.

    For more information on this issue, see Payback Calculations for Energy-Efficiency Improvements.

  3. charlie_sullivan | | #3

    If you want a simple rule of thumb, code minimum insulation is a good rule of thumb. Another rule of thumb is that in the realm of building projects, $500 is pretty inexpensive and if you get something of value from it, consider yourself lucky and go for it!

    If you want to compare options for a specific feature of the envelope, you do not need to model the whole house. To get the heat flow through that specific feature all you need is the total R value or U value of the assembly in question, its area, and the degree days. You might be able to find your degree days here:
    or if that resolution isn't good enough,

    In your case, there isn't much thermal bridging, so the R value is reasonably close to the sum of the nominal R values, if you want a simple and easy calculation.

    Then annual heat loss through that assembly = 24*HDD*Area/R-value. You do that twice with the different R-values and find out how much difference it makes. You don't find out your total energy bill, so you don't find out what percentage you save, but you do find out the amount you save.

    Next you need an estimate of the cost of that heat, which depends on the performance (COP) of the heat pump, and your electric rate.

    Then finally Martin's article on payback could give you guidance on how to convert the annual heat cost to the payback format you want to consider.

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