We talk a lot about the importance of quality insulation installation, especially for batts. If the home is getting a HERS rating, Grade III installation means 5% of your insulated area is modeled as uninsulated. For those in California, failing to meet their definition of quality, a Quality Insulation Installation (QII), means wall cavity R-value is discounted 30% when modeled to determine energy code compliance. For Energy Star or DOE Zero Energy Ready homes it’s simple: get Grade I or you can’t be certified[1]. So, there appears to be market value for quality installation, but does that actually manifest itself in installer compensation? If so, how much is it worth?

Energy Star has some answers

As part of its Energy Star version 3 creation, EPA developed detailed incremental cost estimates of going from a 2009 IECC compliant home to one that would meet Energy Star requirements. Since Grade I is a requirement for Energy Star, they developed cost assumptions for their modeled homes, expressed both in $/sqft and total costs. There was slight variance based on home type, but we will look just at their higher-end estimates for the 2,400 sqft. modeled home:

• Ceilings: Grade II was the baseline, going to Grade I cost $0.07/sqft, adding $85 to total cost
• Walls: Grade III was the baseline, going to Grade I cost $0.09/sqft, adding $204 to total cost
• Floors: Grade II was the baseline, going to Grade I cost $0.15/sqft, adding $178 to total cost

That brings the grand total for quality installation to $467. Some may look at this number as being high, others as low, and still others may say “why should I have to pay more for proper installation”? In a previous blog, we relayed the story of one such builder who requires Grade I but doesn’t pay more for it. But what is the right way to evaluate these costs?

A matter of perspective

We view proper installation, which is quality installation, as insulation installed per manufacturer specifications (which are printed right on the packaging for batts). Insulation installed this way should meet QII, Grade I or any other quality install requirement. Many, if not most, contracts between builders and insulation contractors specify that insulation will be installed “per manufacturer specifications”. That may be a contractual reality, but that doesn’t make it a field reality. Nonetheless, a builder could look at this and say “if it is in the contract I should be getting it at typical prices, not with some upcharge”. This view is even more understandable when you imagine the sticker shock of the $467 figure multiplied across dozens or hundreds of homes in a development. This perspective is understandable, but maybe not realistic. Getting Grade I with batts is very doable but will take some extra time. Given that, some sensible surcharge for incremental labor costs isn’t unreasonable.

The easy approach vs. the cost effective approach

Blown and sprayed-in insulation products are more likely to get Grade I than batt products, for obvious reasons. For builders who need Grade I, whether for certifications, incentives or just for the HERS points, it is easy to say “let’s go with (insert blown or sprayed product) so we don’t need to worry so much about install quality”. This is where looking at the “quality surcharge” in isolation can get you into trouble. The better analysis would be looking at a package of insulation options which includes batts with quality installation vs. other insulation products. Evaluated this way, the “Batts + Quality Install” package will likely compare favorably to other more premium packages which would also likely get Grade I.

It takes more than just dollars

Simply compensating installers differently for Grade I batts isn’t the entire answer. There is additional effort, communication and expectation setting needed among builder, contractor and HERS rater (we shared some best practices in this blog). Ultimately, it is up to builders, and the raters advising them, to look at the different costs and decide if the incremental effort is worth it to get the more cost effective performance provided by batts.

[1] A Grade II install can be calculated as Grade I if paired with continuous insulation