What is the ROI for spray foam insulation cost?

June 1, 2017 Anthony Naimo

It’s believed by many US home builders that spray foam insulation costs more than traditional insulation options like fiberglass and blown-in cellulose. While the short of it is that, yes, spray foam insulation does have a higher upfront cost, there are various cost offset opportunities that bring the cost of spray foam and traditional insulation closer together. Yet beyond insulation cost, one area that should be considered is the return-on-investment (ROI) that spray foam can offer both the builder and the homeowner.

What ROI can a home builder expect to see?

When considering various insulation types and their associated costs, residential high volume builders are able to assist their home buyers in understanding and selecting the right insulation to achieve energy savings. Additionally, spray foam insulation air seals and insulates homes in one step, which as a result, helps speed up the construction schedule since fewer materials (and therefore less labor) are required, and helps reduce the risk of delays meaning construction crews get on with building homes.

Can a good HERS rating be considered part of ROI?

Spray foam insulation can also have a positive impact on a home’s HERS rating. Higher HERS ratings could mean higher energy bills each month for the home buyer/homeowner as well as a less energy efficient home.

What is HERS?

According to its website, RESNET’s HERS Index is a measurement of a home’s energy efficiency.  The score provides home buyers an indication of the home’s energy performance with the HERS Report providing further detail on expected cost of utility bills and where possible modifications can be made to further improve the home’s efficiency.

The resource from RESNET  does identify several areas that can impact the HERS Rating, including:

  • Exterior walls (both above and below grade)
  • Floors over unconditioned spaces such as garages
  • Ceilings and roofs
  • Attics, foundations and crawlspaces
  • Windows and doors, vents and ductwork
  • HVAC system, water heating system, and your thermostat.
  • The home’s air leakage
  • Air leakage in the heating and cooling distribution system

What ROI from spray foam insulation can a home buyer expect?

For the homeowner, the air sealing and insulating properties that spray foam insulation offers helps curb air leakage from the home. Through a reduction in air leakage and improved performance of HVAC equipment (together with the potential to right-size the HVAC equipment), homeowners could see savings on their monthly heating and cooling bills up to 40% *. The return on investment for the insulation cost of spray foam could see payback in as little as three to four years depending on the size of the home, location, whether the whole home or just specific areas were insulated with spray foam, and the potential savings achieved.

For example, a 3,600 sq. ft. home in Georgia may see a 38% reduction in heating and cooling usage for an estimated annual ROI of $442 whereas a 3,850 sq. ft. home in Minnesota may see the same 38% reduction in heating and cooling for an estimated annual ROI of $840.  Again, there are variables which can impact the ROI, but overall, the return on investment for homeowners offers a good reason to consider spray foam insulation.

* Savings vary. Find out why in the seller's fact sheet on R-values. Higher R-values mean greater insulating power.

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