A picture of an attic with insulation on the floor of it, and a money sign in the middle.

Discovering that your home is uninsulated or insufficiently insulated creates a conundrum.

Do you continue living as you have, or should you put forth the money needed to get your home properly insulated? How much does insulation even save you in both money and energy?

The EPA states that insulation can lead to savings of 15 percent on your cooling and heating and 11 percent on your total energy usage.

A reduction of 11 percent on the average U.S. electricity bill would save $13.31 a month, shaving $107.70 off an annual bill.

If you’re still not totally convinced that your home needs insulation, that’s okay. You soon will be.

This article will discuss your cash and energy savings potential by insulating your home.

We’ll also discuss more benefits you can enjoy in a properly insulated home.

Let’s get started.

How Much Does Insulation Save on Energy Bills?

The saying goes that time is money, but we’d say energy is money.

When you have to run your air conditioner longer because the rooms in your home are trapping heat, or when you have to blast your heater to combat the air leaks in your attic, the energy usage adds up.

You’ll notice higher utility bills month after month.

So exactly how much money and energy can you save by insulating parts of your home, such as your basement, crawlspace, and attic?

To answer that, let’s look at the guidance from Energy Star.

Determining your potential savings requires that yours is a “typical” home in the United States. 

Per the Residential Energy Consumption Survey or RECS through the U.S. Energy Information Administration, Energy Star defines a typical home like this.

Your home was built between 1970 and 1989 and has four bedrooms. The property has a conditioned floor area of up to 1,700 feet (518.16 meters).

Your home uses stick construction, such as wooden rafters, joists, and studs. The attics, if they are insulated, feature blown-in insulation, while the walls have fiberglass batts.

The amount of system duct leakage in your home is 23 percent, and the window-to-floor area ratio is 15 percent.

Suppose your home meets the above criteria, and you get insulation installed in your basement walls, crawlspace, floors over unconditioned basements, and/or attics to increase the insulation R-value.

In that case, Energy Star says you can save 15 percent on your cooling and heating bills.

Your total energy costs will also go down by 11 percent.

A chart showing the different saving percentages from each climate zone in the USA.

How Much Money Does Insulation Save?

Let’s break down this information a little bit more. Although it varies throughout the country, figures released by the U.S. Energy Information Administration for 2021, the average household in the U.S. paid $121.01 a month for electricity.

If an average household cuts its electricity bill by 11 percent, that would result in monthly savings of $13.31.

In other words, your bill would come in at just over $100 per month (the exact amount is $107.70).

At $121.01 per month, you’d pay $1,452.12 on your electricity bill annually.

With the 11 percent savings applied, you only pay $1,292.39 for the year. That’s a total saving of $159.73 per year.

We have seen higher estimates for heating and cooling savings than 11 percent, sometimes up to 20 percent. Your annual energy bill savings would be even greater.

Your total energy cost is the amount of electricity your home uses in kilowatt-hours multiplied by how many hours your home uses power.

Your total energy costs vary depending on your state; we’ll discuss this in the next section.

To give an idea of the upper end of possible savings, let’s look at the Pacific Noncontiguous region, which includes Alaska and Hawaii.

In this region, average electricity bills are $160.34 per month. By taking 11 percent of $160.34, you’re shaving $17.64 off your total energy costs. That’s $211.65 every year – not to be sniffed at.

How Much Energy Does Insulation Save?

If you’re environmentally aware, you’ll know that it’s important that we all minimize our energy usage and carbon footprints to help reduce the effects of global warming.

The generation of electricity contributes to greenhouse gas emissions, mainly in the form of carbon dioxide from burning fossil fuels.

According to the U.S. Energy Information Administration, electricity generation in the U.S. totaled 4.01 trillion kWh. This is from all energy sources, which include natural gas, coal, and petroleum.

You’re already ahead of the game if you generate your electricity from renewable sources, such as solar PV.

However, if your electricity comes from fossil fuels, improving your insulation will have a much greater positive effect on reducing carbon emissions and mitigating climate change.

The U.S. EIA states that electricity generated from coal results in emissions of 2.23 pounds per kWh, with petroleum coming in a close second at 2.13 pounds per kWh.

Natural gas is the “cleanest” but still produces 0.91 pounds of CO2 per kWh.

The average electricity usage per household in the U.S. is 886 kWh per month.

Assuming an average home in an area of the country where all the electricity is generated by burning coal, the electricity used by such a home would result in 1,976 pounds of carbon dioxide being emitted to the atmosphere every month. That’s 23,700 pounds each year.

If you live in a home that approximates this situation, you could reduce your energy use by nearly 1,200 kWh per year and your carbon emissions by over 2,600 pounds per year just by sealing and insulating your home properly.

Money and Energy Savings by Energy Star Climate Zone

The above savings are that of a typical home as a national average.

As we’ve already discussed, where you live can affect your energy consumption. That’s why in this section, we want to break down your exact heating and cooling cost savings and your total energy cost savings depending on your climate zone as denoted by Energy Star.

A brightly colored map of the USA showing different colors for each climate zone.

Southern Climate Zones

The southern climate zones, according to Energy Star, are divided into southern and south-central and include these states:

  • Florida
  • Georgia
  • South Carolina
  • Most of North Carolina
  • Alabama
  • Mississippi
  • Louisiana
  • Most of Arkansas
  • Most of Oklahoma
  • Most of Texas
  • Parts of New Mexico
  • Parts of Arizona
  • Parts of Nevada
  • Parts of Tennessee
  • Some of California
  • Hawaii

Here are the savings by the southern climate zone.

  • CZ 1: 7 percent on cooling and heating, 5 percent on total house
  • CZ 2: 9 percent on cooling and heating, 6 percent on total house
  • CZ 3: 14 percent on cooling and heating, 8 percent on total house

Northern Climate Zones

Energy Star splits the northern climate zones into north-central and northern states. They are as follows:

  • Most of Arizona
  • Most of New Mexico
  • Parts of Texas
  • Parts of Oklahoma
  • Parts of Arkansas
  • Most of Tennessee
  • Parts of North Carolina
  • Kentucky
  • Missouri
  • Kansas
  • Colorado
  • Utah
  • Most of Nevada
  • Parts of California
  • Oregon
  • Idaho
  • Washington
  • Montana
  • Wyoming
  • North Dakota
  • South Dakota
  • Nebraska
  • Minnesota
  • Iowa
  • Wisconsin
  • Illinois
  • Michigan
  • Indiana
  • Kentucky
  • Ohio
  • Virginia
  • West Virginia
  • Maryland
  • Delaware
  • New Jersey
  • Connecticut
  • Rhode Island
  • Pennsylvania
  • New York
  • Massachusetts
  • Vermont
  • New Hampshire
  • Maine

With six Energy Star climate zones in the north, here is an overview of your expected savings by region.

  • CZ 4: 17 percent on cooling and heating, 12 percent on total house
  • CZ 4C: 20 percent on cooling and heating, 13 percent on total house
  • CZ 5: 16 percent on cooling and heating, 12 percent on total house
  • CZ 6: 18 percent on cooling and heating, 14 percent on total house
  • CZ 7: 19 percent on cooling and heating, 15 percent on total house
  • CZ 8: 18 percent on cooling and heating, 16 percent on total house

Factors That Affect How Much You Save Through Insulation

The effectiveness of insulation in saving money and energy is influenced by various factors. Understanding these factors will help you maximize your insulation investment.

They include:

  • Climate and region: The local climate plays a significant role in determining the insulation needs of a home.
    Colder climates require higher levels of insulation to retain heat, while homes in warmer climates focus on blocking out excess heat.
  • Type of insulation material: Different insulation materials have varying thermal properties.
    Fiberglass, cellulose, foam boards, and spray foam are common options, each with distinct advantages. The initial cost, R-value (thermal resistance), and lifespan of the chosen insulation material impact its overall cost-effectiveness.
  • Insulation thickness and quality: The thickness of insulation is directly related to its thermal performance.
    According to the U.S. Department of Energy, thicker insulations have a higher R-value and thus, provide better energy efficiency. Installation quality is also crucial; poorly installed insulation can create gaps and voids, reducing its effectiveness and potential savings.
  • Ventilation and air sealing: Proper ventilation and air sealing complement insulation efforts. Inadequate ventilation can lead to moisture issues, reducing the effectiveness of insulation.
    Additionally, air leaks through gaps and cracks can undermine insulation efforts. Thus, ensuring a well-ventilated and properly sealed home enhances the overall energy efficiency and subsequent cost savings.

What Are the Other Benefits of Insulating Your Home?

If you’re still not swayed by the potential of year-over-year money savings, these other benefits of insulating your home might entice you to do it.

Insulation Preserves Your HVAC Units

Did you know that today, the average cost to replace a heater or air conditioner is $7,000?

Even a rainy-day fund is unlikely to cover the full cost of replacing your broken HVAC units.

Although these units don’t last forever, you should get at least a decade or two out of them.

Having to replace your heater or air conditioner sooner than 10 years old puts an unnecessary strain on your wallet.

So, where does insulation come into all this?

When your home is well insulated, it has fewer air leaks that let in outside air. In the winter, this means the frigid air stays outside, and your heater doesn’t have to work harder to keep your home toasty.

a man in an orange shirt and hardhat working on an HVAC unit
With less use due to more efficiency after your upgraded insulation due to more regulated and constant temperatures inside the home, you can save money on the maintenance and replacement of your HVAC unit. These savings may not be apparent short-term, but long term, it adds up!

When summer arrives, humid air won’t make its way into your house, keeping your air conditioner on a never-ending run cycle.

Without working as hard and running as frequently, you can preserve your HVAC machines so they might last the full length of their expected lifespan, perhaps even longer!

Insulation Keeps You Healthier

Besides causing temperature fluctuations, outdoor air also brings with it pollutants and allergens.

If you’re a pollen allergy sufferer, you wouldn’t even be able to get relief in your own home because the pollen would follow you inside.

The Harvard School of Public Health has assessed what proper insulation could do for public health in this PDF and other studies.

According to Harvard, if all homes in the U.S. had eco-friendly insulation, then every year, there’d be 6,500 fewer asthma attacks.

People would spend 110,000 fewer sick days. The best benefit is that the country would have 240 fewer premature deaths.

Insulation Reduces Outside Noise

Insulation is excellent at preserving your home’s temperature, but it also prevents outside noise from easily getting into your home.

Whether it’s the incessant sounds of cars driving on your busy street or even the barking of your neighbor’s annoying dog, these unwanted sounds make it hard to relax.

Once you get your attic and basement insulated, you’ll be pleasantly surprised by how quieter your home is. Unwinding after a long day will truly feel refreshing.

Insulation Can Increase Home Value

Even if you never turn around and sell it, your home will be as valuable as possible, which means it’s high-quality and, thus, nice to live in.

Studies increasingly show that energy-efficient homes can go for a higher price because more people understand the long-term benefits, such as money savings and comfort.

We experienced this with our first net-zero home renovation, where we saved about $2,500 per year between utility and gas savings.

With a strategic yet straightforward combination of energy efficiency (including some insulation upgrades) and solar, the house produces enough power to power the house and the Tesla (EV) for the whole year.

You can check out how we did it here.

A picture of a blue Tesla Model 3 in front of our white-painted net-zero house with solar panels on the roof, and palm trees around the yard.
Our first net-zero home renovation was completed in 2020 through the pandemic (pretty stressful!)

Should you change your mind and decide to put the property on the market at some point, you’d fetch quite a high asking price for your home since it’s green from top to bottom.

Which Parts of a Home Should You Prioritize in Insulation?

If you plan on upgrading your home’s insulation to enjoy the above savings in money and energy, there are some parts of the home to prioritize.

They include:

  • Attic and foundation: The attic and the foundation should be the first point to consider due to the stack effect. Therefore, if you want to lower energy consumption, focus more on attic and foundation insulation.
    These are vulnerable to energy loss due to convection. You can use materials such as cellulose, fiberglass, or foam board.
  • Roof: Insulating the roof deck or underside of the roof creates a thermal barrier that prevents heat transfer, thus reducing energy costs.
  • Windows and doors: These are potential weak points for energy loss due to air leaks and poor insulation. Upgrading to energy-efficient windows and doors or adding weather stripping can significantly improve insulation.
    Double-pane or triple-pane windows with low-emissivity coatings are effective in reducing heat transfer.
  • Seal gaps and cracks: Even well-insulated areas can lose efficiency if there are gaps and cracks allowing air infiltration.
    Therefore, it’s crucial to seal these gaps with caulking or weatherstripping.
  • Basement: Basements are often cooler than the rest of the house. Insulating basement walls can help create a more comfortable living environment. It also prevents moisture issues.
    For this you can use rigid foam boards or spray foam insulation.

Energy Saving Insulation – Final Thoughts

Insulation can save you a national average of 15 percent on your monthly heating and cooling bills and 11 percent of your home’s total energy costs.

The hundreds of dollars you save in energy month after month add up to thousands of dollars per year.

Even better than that is knowing that you’re doing what’s right for our planet while increasing your home’s curb appeal!

We have some additional resources if you’re looking for more insulation information.

Here’s a write-up on comparing Rockwool to cellulose. There’s also one on comparing spray foam to fiberglass as well. And another that answers whether you should insulate your garage or not.

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