The exterior of a home under construction which has had exterior home insulation applied

Insulation is a pivotal element of energy-efficient homes, and there’s no doubt that you should use it.

It is essential to insulate your house top to bottom, from the roof down to the foundation, for optimal effect. A process that means you should insulate your home inside and out – internally and externally. 

There are many insulation options, but exterior home insulation is a bit different from most. We use it outside buildings to improve thermal performance and minimize energy costs. In addition, it offers an excellent solution for insulating existing buildings that don’t have cavity walls as well as new homes. 

Whether you’re building a new home or renovating an old one, you want it to be cool in summer and warm in winter. Hence, when homes are constructed, the outside walls are usually insulated. Unconditioned spaces like roofs, attics, basements, crawlspaces, and ducts are also insulated. 

A while ago, we shared The No-Nonsense & Comfy Guide to Home Insulation with you. The bulk of the guide covers the many different types of insulation you can use, varying in material as well as application, and are, to a large extent, dependent on the design and structure of your home. 

For example, some excellent reflective systems, including aluminum foil, work exceptionally well in ceiling spaces. Fiberglass, a partly recycled material, works well in stud-frame walls. Loose-fill fiberglass and cellulose are suitable for wall cavities too and can be blown in or sprayed to fill the hole, like foam. 

But none of these insulation types is suitable for exterior home insulation in this context. 

So, what is exterior home insulation, and when should you use it? 

Let’s dive in, and I’ll share what I know about exterior home insulation and where and when to use it. I will also delve into the pros and cons of its use. 

What is Exterior Home Insulation? 

Terminology can be terribly confusing. For instance, on its website, the Department of Energy (DOE) includes the full spectrum of insulation options suitable for exterior walls under the heading, Exterior Wall Insulation

But we are talking about exterior wall insulation or external insulation that we use to insulate walls from the outside. This type of exterior home insulation is used to protect older homes that have solid walls without cavities and new and existing homes built with stud-and-sheathing framing. 

When insulating homes with solid walls, another option would be to install internal wall insulation on the inner surfaces of your exterior walls.

The most common method is to build a timber frame and install rigid foam insulation and a vapor barrier to prevent condensation and dampness, finished with plasterboard. It’s doable and effective, but you’ll lose floor space. 

An exterior insulation batt
A cross-section of an exterior insulation batt, displaying all its components

Also, by insulating your outside wall internally, you will retain heat inside the house. It won’t be released to the outside and won’t warm your exterior walls. 

On the other hand, exterior home insulation minimizes thermal (or cold) bridging, where cold is transferred directly through the solid outer walls of your home. It literally wraps the house in insulation, separating the cold air from the exterior walls and preventing energy loss through the building.  

When you insulate externally, the walls’ thermal mass heats up slowly during the day. Then, at night, when it is colder, most of the heat is directed back into the house.  

Today, we often use a combination of exterior home insulation and cavity wall insulation.

About Cavity Walls

Before we had homes with cavity walls, solid walls were the norm and had been the norm for centuries. Unfortunately, solid walls sometimes failed to stop penetrating rain from getting into homes. 

Cavity walls originated in the UK in the early 19th century as a solution for dampness. However, only later was insulation used within them.  

This type of construction became much more common when concrete blocks and cast-in-place concrete became popular in the 20th century. There’s a fascinating report published by the Chicago-based Masonry Advisory Council that refers to cavity wall masonry buildings as energy-efficient buildings. That was in the 1950s! 

Indeed, there’s no doubt that cavity walls provide the means to effective insulation solutions when constructed according to contemporary building codes.

When professionals choose the correct type of insulation, it reduces condensation and keeps the interior of the house at a constant temperature. 

But there is an ongoing caveat. If the wrong insulation material is used in cavity walls, it can promote dampness, which can be a real problem, especially if there is a pre-existing dampness issue in an old house. 

Additionally, there is a growing trend to use both cavity wall and exterior wall insulation together for maximum effect. 

Origins of Exterior Home Insulation

Exterior home insulation systems date back to the 1950s when a patent was granted for two important materials:

  • The first synthetic plaster using water-based binders
  • Expanded polystyrene (EPS) board

These systems have in common that we can apply them to an existing wall of a home or other building and create an energy-efficient surface. 

They both have a long, successful history in various parts of the world, including Russia, China, the Middle East, parts of Europe, and the US But, to function well, these systems must be designed by professionals and installed by trained applicators as part of a well-designed system. 

In the US, exterior home insulation has been used on masonry buildings since the 1960s and wood-framed buildings since the 1990s. While it was originally used to improve insulation in buildings built with solid masonry walls, it is now recognized as an excellent form of insulation for all buildings.  

Exterior Home Insulation Systems

Exterior home insulation is commonly known as an:

  • Exterior wall insulation system (EWI)
  • Exterior insulation finishing system (EIFS)
  • External thermal insulation composite system (ETICS)

Today, various exterior home insulation systems are available in the construction industry, which come in different forms, depending on the system and materials used. 

In general terms, EWI systems are formed by installing a layer of insulation on the solid outside walls of the building.

Foam board is a proven material used for new and existing buildings. It is commonly used on the outside of new wood-framed homes to complement and improve cavity insulation. 

Foam Board Insulation is applied to a home

Once the insulation layer has been applied to the outside of the wall, it is usually finished with a coat of mortar and closed in with brick slips or clad with tiles or timber boards. 

EWI, ETICS, and EIFS systems, as they are known in North America, are the same thing. They provide thermal insulation for exterior walls and protect them against thermal energy loss.   

Usefulness of Exterior Home Insulation Systems

EIFS has been regarded as the answer to exterior home insulation for many years. It provides cladding that isn’t load-bearing but provides a well-insulated surface that is water-resistant and attractive. 

This wasn’t always the case. In the 1990s, barrier EIFS systems got very negative publicity when failed systems led to significant moisture intrusion problems.

According to the National Association of Home Builders (NAHB), even builders with excellent housing construction reputations had problems, which led to a significant change in EIFS system design that addresses water drainage.

Today this is the predominant EIFS system used. Home Innovation Research Labs (previously known as the NAHB Research Center) has valuable resources for drainage EIFS

Research by the Oak Ridge National Laboratory validates contemporary EIFS as the best performing cladding for thermal and moisture control. The DOE supports this finding.  

EIFS is often called synthetic stucco, although, in reality, it is nothing like stucco. 

Traditional stucco has been used for centuries and applied to exterior walls as a fireproof, energy-efficient finish. However, its energy efficiency is questionable when compared with modern technology. 

Stucco is applied to the exterior of a home

Stucco is made with a mix of Portland cement, limestone powder, building sand, and water, in the proper proportions. EIFS stucco is made with synthetic materials, including polystyrene board and fiberglass mesh covered with a finishing coat. The various layers include: 

  • A water-resistant barrier (WRB)
  • A drainage plane
  • Insulation board, EPS
  • Glass-fiber reinforcing mesh
  • A water-resistant base coat that becomes a weather barrier
  • A crack-resistant finish coat, commonly an acrylic copolymer

Some companies promote EWI systems that incorporate mineral wool. It is available in a range of thicknesses to accommodate local requirements and codes. 

When & Where Will You Use Exterior Home Insulation?

Exterior home insulation is sometimes used to insulate old homes that don’t have proper insulation, particularly those with solid walls.

Exterior insulation is applied to an older home with solid walls

But there is a growing trend to use a combination of cavity insulation with exterior home insulation in new homes. 

Steve Easley, principal of an Arizona-based company that provides building-science consulting, training, and quality assurance for builders throughout the US, has been tracking the evolution of energy codes for the past 20 years. 

In an article published in Builder in July 2020, he examines why the idea of exterior home insulation has become so compelling.

In short, there has been an increasing emphasis on external insulation for walls since about 2006, the year the International Energy Conservation Code (IECC) introduced the option to include exterior insulation in its tables. 

More options are included in the most recent 2021 IECC, including combinations that include exterior and cavity insulation.

There are too many options to discuss here, primarily because they differ according to the various US climate zones. But the advantages are convincing. 

Pros & Cons of Exterior Home Insulation 

Let’s look at some of the pros and cons of exterior home insulation in general, as well as the pros and cons of the different systems it offers.

Basic Pros and Cons

Exterior wall insulation reduces thermal bridging and can dramatically increase the thermal efficiency of your home. As a result, you won’t lose valuable floor space inside, and the new cladding outside will make your house look new again.  

External wall insulation will cost considerably more than internal wall insulation. Also, systems can be complicated to install.

Traditional Stucco

It looks great, is affordable, durable, and is easy to repair. You can apply it to masonry and wood-sheath walls. Because the system is simple, you can add decorative elements quite easily. 

Even though it isn’t tricky to repair, traditional stucco does tend to crack over time and is susceptible to water damage, making it a relatively high-maintenance finish. 


It provides more protection and insulation than the traditional types. It is also a lot lighter than traditional stucco. 

EIFS complies with modern building codes that focus on energy conservation achieved by using a continuous air barrier and continuous insulation. 

Installation is a lot more complicated and time-consuming than the traditional stucco process. If it isn’t installed correctly, there is a danger that the system will fail as moisture and mold will build up. 

You will need a professional contractor to install an EIFS system, making it a lot more costly. 

EWI Mineral Wool Systems

It provides a solution that allows moisture to pass through solid walls, removing all condensation risks. At the same time, it improves thermal performance and reduces energy bills. And they don’t have a fire risk. In addition, some systems add soundproofing to exterior walls.

They are generally expensive. 

The Verdict

Exterior home insulation has many more advantages than disadvantages, and you should definitely consider using it if you are building a new home. However, there is no question that you should use it if you are renovating an old home with solid exterior walls or inadequate exterior wall insulation.  

Whatever you call it, EWI, EIFS, or ETICS will provide superior thermal insulation for exterior walls. Combined with cavity wall insulation as suggested in the IECC, you can’t go wrong.  

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