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Insulation Upgrade: What Is a Good Investment?

Is an insulation upgrade a wise investment? We often talk about the importance of energy upgrades for your home. But if you’re thinking about an upgrade this winter, such as adding more insulation to your attic, you may be wondering exactly how to calculate whether that’s a wise financial investment.

Insulation Upgrade - What is a Good Investment?There are a variety of formulas available for making this calculation, such as the one from the U.S. Department of Energy (DOE).

It’s not a terribly difficult formula to use, and we’ve modified it here to make it a little more understandable.

You’ll need to do a little research to track down some basic information to fill in the blanks, all of which you can get off the Internet or with a couple of phone calls. Then it’s just a couple of minutes with a tablet and a calculator.

Incidentally, this formula also works for upgrades to wall insulation.

Insulation Formula and Definitions

The DOE’s formula is as follows: (Ci x R1 x R2 x E) ÷ (Ce x [R2 – R1] x HDD x 24)

OK now, don’t let your eyes glaze over, or have terrifying flashbacks to high school algebra class. Here’s what all those variables stand for:

  • Ci: This is the cost of the insulation you’re considering, in dollars per square foot. If you’re doing the work yourself, it’s the cost of the materials, supplies and any rental equipment you need. If you’re having the work done, it’s the estimated cost from the contractor.
  • R1: This is the R-value of the insulation you currently have in the attic.
  • R2: This is the R-value you want to upgrade to.
  • E: Efficiency rating of your heating system. How well your heating system heats your home plays a major role in how much you’re going to save with an insulation upgrade; the less efficient your heating system is, the more energy dollars the additional insulation will save you each year. You may know the specific energy efficiency rating of your particular heating system, or you may be able to get it from your utility company or HVAC contractor. If not, the DOE offers the following general suggestions: oil and propane furnaces, 0.6 to 0.88; natural gas furnaces, 0.7 to 0.95; electric, 1.0; heat pump 2.1 to 2.5.
  • Ce: This is what you’re paying for the energy you use, converted to dollars per British thermal unit (Btu). To arrive at this number, you’ll need to divide the actual price you pay for the fuel you use (electricity, gas, etc.) by the Btu content of that fuel. You can find the price you’re paying on your utility bill or by calling your utility company.
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The Btu content of various fuels is as follows:

No. 2 fuel oil = 140,000 Btu/gallon

Electricity = 3,413 Btu/kilowatt-hour

Natural gas = 103,000 Btu/cubic feet or 100,000 Btu/therm

  • HDD: This stands for heating degree days, which is a standard method for determining how cold a specific geographic location is, and how much demand there will be for heating. It’s determined by the statistical average of the number of degrees that a day’s temperature falls below 65 degrees Fahrenheit, which is considered the temperature at which a building needs to be heated. The higher the number of heating degree days in an area, the more demand there is for heat, so the greater the savings will be from an insulation upgrade. You can get your area’s HDD number from your utility company or off the Internet.
  • 24: Hours in a day, used in this formula to convert HDD from days to hours.

Let’s say you have a 1,500-square-foot home with R-11 insulation in the attic. You have electric heat, and you’re currently paying 9 cents per kilowatt-hour for electricity. You’re thinking of upgrading to R-38, and a contractor has given you an estimate of $1,200 to do the work. A quick check on the Web has shown you that your area has approximately 7,500 heating degree days.

Here’s how all that would plug into the formula:

  • Ci: 0.80. (Cost of insulation is 80 cents per square foot, based on a $1,200 estimate divided by 1,500 square feet).
  • R1: 11. (Existing attic insulation is R-11).
  • R2: 38. (Proposed upgrade is R-38).
  • E: 1.0. (Electric heat has an efficiency rating of 1.0).
  • Ce: 0.000026. (Electricity in your area costs $0.09 per kilowatt-hour, divided by 3,413 Btu/kwh).
  • HDD: 7500 (The number of heating degree days in your geographical location).
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Now, take the formula in plug in the numbers, then do the math:

  • (Ci x R1 x R2 x E) ÷ (Ce x [R2 – R1] x HDD x 24)
  • (.80 x 11 x 38 x 1) ÷ (0.000026 x [38 – 11] x 7500 x 24)
  • 334.4 ÷ (0.000026 x 27 x 7500 x 24)
  • 334.4 ÷ 126.36 = 2.64 years

So, based on this formula and all the variables, you can expect the insulation upgrade to pay for itself in a little over 2 1/2 years.

Brown and Reaves Services, Inc., Serving the entire Myrtle Beach and Grand Strand area. Call us today: 843-497-9867. Remember to grab our 20% off coupon on your next service call by Liking us on Facebook.

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