blog articlespray vs. batt insulation
A Cost Comparison
Which costs more; spray insulation or batt insulation?
Spray insulation costs $22,500 to install.
Batt insulation costs $9,000 to install.
But when you compare ALL of the costs, spray insulation is actually cheaper.
Batt insulation is the oh so familiar pink stuff that gets stapled or wired into place. It takes relatively unskilled labor to install it. The installer needs to know that it shouldn’t be squeezed into tight locations because of the air between all of the fibers of the material… because the air between all of the fibers within the material are there to help with the insulation effect. It is associated with a less installation cost, but it is also less energy efficient.
So what normally happens is your general contractor calls, and he’s got great news. He says,
“Hey I found a way to save you over $22,000 on your project.”
And you’re so excited. You’re, “Oh my gosh. I can’t believe my architect didn’t know about this cost savings, and my general contractor had to come to the rescue.”
But slow down, and really think about it for a minute. What is the long-term cost of saving money today? Basically, what is the return on the investment for each one of these materials?
What I’m going to go over is the different installation costs, the amount of cost it would take to finance it, the amount of savings you get operationally with a lower utility bill, and then I’m going to wrap things up with what is the bottom line comparison between spray insulation and Batt insulation.
So the example building that I used for these numbers that I’m about to go over with you came from about a 10,000 square foot, one-story wood-framed building that was a commercial building. So the initial cost to install the spray foam insulation was $22,500, and that seems like a really big-ticket item. But you’ve got to realize that when your contractor gives you that number, you also have to take out what the cost would have been for the batt insulation. So if you’re adding spray insulation, you need to remove the batt insulation from your overall project fee.
So if the initial cost for your Batt insulation was $9,000, you remove that from the cost of the spray. You also get savings by using spray foam insulation because the liquid really seals the attic much more tightly than batt insulation. When the engineer goes to calculate the size of the units that you need to heat and air your building, they’re able to size them slightly smaller because the units don’t have to work so hard. And so that saves you a little bit of money too. So that reduced air conditioner size is about a $2500 savings.
The general contractor also does not have to pay somebody to crawl up into the attic and manually seal and tape the attic, where a guy gets into all the awkward nooks and crannies of your attic and he tapes it, and he caulks all of the openings before the batt insulation. So you get some labor savings there as well.
And when you remove all of that from the cost of the Icynene spray foam insulation, what you really end up with is a net difference of $9,000. So to install the spray foam insulation instead of installing the batt insulation really becomes about a $9,000 savings instead of a $22,500 savings.
And, on top of that, let’s talk about what it would cost to finance that $9,000 over the course of your construction loan. What would that mean to your monthly loan payment? So assuming that your construction loan is a four percent loan over a 15 year period, that $9,000 additional cost becomes a $90 a month addition to your loan payment back. So that’s an extra $90 a month you would pay for the $9,000 cost during construction.
Next, let’s look at operational savings. So what does it cost to heat and cool the building with batt insulation? Well, we found out with our 10,000 square foot building that it cost about $10,000 for the course of the year to heat and cool the building. Comparatively, we found that to heat and cool the building with spray it costs a little bit less, costs about 62 hundred dollars a year. So the difference, if we subtract the cost of Icynene from the cost of batt insulation, the difference that you get… the cost savings that you would have is 36-45 a year. So that comes up to, if you break that down, that comes out to be $303.75 a month that you’re saving by using the spray.
And a lot of you are probably jumping ahead now and looking at that comparison. So you’re spending $90 a month over here on your construction loan to save $303 a month over here on your energy bill.
So we’re going to wrap it up with the bottom line. And a lot of you might have already jumped ahead of me, but here we go. So the bottom line is you would spend $90 a month on the additional cost in construction for the spray insulation, but over here you would be saving $303 a month on your utility bill every month. So really to use a better product like a spray insulation in your attic, you actually save over $200 a month when you look at your entire balance sheet for operating the project. So you really save over $200 a month overall.
So over here you’re spending $90 a month to fund the spray insulation, but here you’re saving $300 a month roughly, on your energy bill. So the bottom line becomes a savings of about $200 a month. So every month you would get $200 more in your pocket because you decided to use a better quality product.
What you’ll find is that by the end of each year, you’ll save about $2500. And that’s with today’s rates. We all know that energy cost is going to go up every year, and so over the course of your building ownership, the savings is just to continue to grow. It may be $2500 this year, and it might $2600 the next year, and $2800 dollars the next year.
Having spray foam insulation will also allow you to have a less expensive sprinkler system in your building if it’s required.
When you’re reviewing the cost of different items for your construction project or your new building, don’t just look at the initial upfront cost for installation. Take a step back and slow down and think about statistically, how much money will that save me each year in operation cost that would be off… that would more than offset. When you break out that one cost for the financing portion of your construction loan, and then you break out the operational savings of the utility cost every month, it becomes really clear what the better choice is.
Initially, you might have looked at the installation costs and thought, “Yeah, but I really need that $9,000 for something else today,” but really not spending that $9,000 as part of your construction cost would cost you $200 a month. It would be a mistake that would cost you $200 a month every month, because you chose not to have a long-term vision of your building ownership.
So to me, in my opinion, spray foam insulation is a no-brainer.
We’re taking cost analysis a step further and including many of these comparisons in our new online course, Save on Building.