Insulation ROI Calculator
Project energy savings including IRA tax credits.
How We Calculate Your ROI
Our calculation determines your payback period by estimating your annual energy savings and factoring in federal tax incentives.
R-Value Efficiency Visualization
High Heat Loss
Inside: 70°FHeat Retained
Inside: 70°FA higher R-value wall (right) blocks the transfer of heat energy from your warm interior to the cold exterior.
1. R-Value & Heat Loss
R-Value measures an insulation's ability to resist heat flow. The higher the R-Value, the better it insulates. We calculate the reduction in heat loss using a formula that incorporates the area, the change in R-Value, and a climate metric called Heating Degree Days (HDD).
For this calculator, we use an average HDD of 4500, typical for a mixed climate like the U.S. Midwest. A real-world application would use a database to match your ZIP code to its specific HDD value for greater accuracy.
BTU_Saved = ((Area * HDD * 24) / R_Current) - ((Area * HDD * 24) / R_New)
2. IRA Tax Credit (Form 5695)
The Inflation Reduction Act (IRA) provides significant tax credits for energy-efficient home improvements. For insulation, you can claim 30% of the project cost, up to a maximum of $1,200 per year. This credit directly reduces your total project cost, dramatically shortening your payback period.
To claim the credit, you will need to file IRS Form 5695, Residential Energy Credits, with your annual tax return. Keep all your receipts from the installation.
NetCost = TotalInstallCost - min(TotalInstallCost * 0.30, 1200)
Case Studies: Payback Period by Climate
Hot Climate (e.g., Phoenix)
A 1500 sq. ft. attic goes from R-19 to R-60 for $4,000. With a low HDD of 1500, annual savings are modest.
Payback: ~10.5 Years
Mixed Climate (e.g., Chicago)
A 1200 sq. ft. attic goes from R-11 to R-49 for $3,000. With a high HDD of 6000, savings are significant.
Payback: ~3.2 Years
Cold Climate (e.g., Anchorage)
A 2000 sq. ft. attic goes from R-30 to R-60 for $5,000. An extremely high HDD of 10000 makes the ROI very fast.
Payback: ~2.1 Years