We’ve all seen the technique; it is very common in the building industry. A product manufacturer shows how their product can reduce or eliminate the need for other associated products, typically those that comprise some building system. The approach gets customers to think about costs holistically versus piecemeal. This happens in many industries, but given the complexity and systems-design nature of home construction it is very common in the building industry. The problem is that when multiple new assumptions are introduced into cost analyses you really need to look at the fine print to understand if all the assumptions are legitimate.

A case study with ccSPF

Recently, a major manufacturer of closed cell spray foam insulation (ccSPF) released a homebuyer focused sales brochure touting the benefits of its product. In it, the manufacturer provides a bar chart showing costs of different insulation options, along with various other costs they claim ccSPF can reduce or eliminate. The intention is to demonstrate that, when multiple line items are examined beyond just insulation material and labor, ccSPF is as cost effective as other insulation options. To the manufacturer’s credit, they have citations for all their claims, which are explained in the fine print at the bottom of the brochure. However, when these citations are examined, it causes one to question just how representative their assumptions about cost are. It is worth tackling each one to understand this more.

1. Moisture control. The claim is that ccSPF is an “acceptable flood resistant material” per FEMA guidelines and can save homeowners money on NFIP flood insurance, up to $325/year. However, only about 14%[1] of current U.S. homeowners have flood insurance. So, that means 86% do not, so these possible cost savings won’t materialize for the vast majority of homebuyers.
2. Structural enhancement insurance discounts. ccSPF can get Florida homeowners savings on their annual wind policy of $315/year. That is fine…for Florida. Hard to see how these savings are more broadly representative of the national home buying populace.
3. Additional HVAC costs. They say ccSPF can allow you to downsize your system, using the example of going from a 4T 16 SEER to a 3.5T 16 SEER saving $810. Quite true that ccSPF could let you do that…but so could other insulation types, assuming comparable installed R-values and comparable whole home air sealing levels (duct system design, placement, and insulation levels are also key factors). So, yes this is a real potential cost savings, but asserting it is unique to ccSPF and not applicable to other insulation types is misleading.
4. Additional framing costs. The brochure asserts savings by using 2x4 framing vs. 2x6 of $1,066. There is an argument here, but, there is no mention of whether we are talking about 16” or 24” on center walls. This distinction clearly matters. APA claims that 2x6 and 24” on center can reduce framing material costs by 30%[2]. This is a complex issue and there is room for debate, but at a minimum, talking about cost savings of 2x4 vs. 2x6 without reference to 16” or 24” on center misses a key variable to consider.
5. Vapor control and air sealing. These are both valid points. No question ccSPF does more for both of these than other insulation types, at least on their own. However, SPF applied in wall cavities is not the same as a continuous whole home, or even whole wall, air barrier. The fine print does note additional sealing is needed at “floor joists, windows and doors”. I would add to that the top and bottom plates, which are the top sources of wall air leakage.

Is a “total cost” approach bad?

Absolutely not. There is nothing inherently wrong or misleading with this technique. Quite the opposite, when done well, it can shed light on ways to reduce costs you may not have realized. But builders should scrutinize these types of techniques carefully. If we look at this example, even with all the assumptions, the manufacturer shows closed cell spray foam insulation to be $1,000 more than fiber glass (though they do not specify batt or loose fill, another key distinction). If we eliminate some of the questionable savings, namely the two for insurance, framing and HVAC downsizing, that’s another $2,516. Now the cost difference between ccSPF and fiber glass is $3,516. This is not a small difference. To be fair, this piece is focused on homebuyers, not builders, so the savings associated with insurance, to the extent they apply at all, are not intended to reflect builder costs. Regardless of what anyone thinks of the legitimacy of these assumptions for themselves or specific customers, the takeaway here is that devil is in the details, or in this case the fine print.

Want more info comparing insulation types? Check out our insulation comparison page.

[1] http://www.iii.org/fact-statistic/flood-insurance

[2] https://www.apawood.org/advantages-of-advanced-framing#cost