Return on investment. Cost-benefit analysis. Life Cycle Cost analysis. Are any of these part of your decision-making process when you’re making a significant purchase? If not, we suggest they should be.
Even after decades of documented, proven results we regularly run into people who don’t believe spray foam insulation will pay for itself. There are a number of reasons behind their feelings – ranging from those who don’t plan on being in their home for long, to those who don’t calculate the benefits they could realize by investing in spray foam.
We agree that choosing sprayed on insulation for a home can be a more expensive initial cost than going with a traditional insulation. However, we also know that when you run the numbers, installing spray foam insulation is a cost that will pay for itself.
Purchasing on Emotion
When it comes to making purchases, too often decisions are made solely based on emotion. This isn’t unique to home-building. Many times people never sit down and run the numbers prior to making a significant purchase.
Think back to the last time you purchased a car. New or not, did you run the life cycle cost of the cars you were considering to compare relative operating costs between like vehicle models? Did you look at the big picture for each option and consider purchase price, depreciation, maintenance and fuel costs? Or, like it’s so easy to do, were you distracted by color choices or options on a car? Would a small economy car meet your needs, or do you require a full size luxury vehicle? If the latter, what is the payback on the luxury choice?
Similarly, when thinking about the life cycle cost of owning a home, you should look at the big picture when making your calculations. Think beyond the initial cost. Also consider operating/energy costs, energy cost in future years, HVAC sizing (choosing spray foam can lower the size and cost of the HVAC system needed) and resale value. Back to the car example, it’s not always as easy to resale a full size SUV with a big, gas-guzzling engine as it might be a more economical car that gets better gas mileage. The same is true for homes.
The video below is a good illustration of what it takes to get a true life cycle cost of something:
Not Looking at Cost Alone
If we were really purchasing new homes on cost alone, would people continue to select pricier finishes like granite countertops, fireplaces and whirlpool tubs? “Wants” come into play. “Needs,” in terms of building science, should be a factor as well.
According to the National Association of Home Builders, on average, insulation only accounts for 1.9% of the total cost on a new construction home. Yet, no other part of the construction can make so much of a difference in the level of comfort you will experience in your new home. By comparison, the same survey indicates homeowners will spend 5% on flooring – an investment that may wear out in 5-8 years and potentially go out of style.
When it comes time to dedicating your resources during the building process, remember that the fundamental decisions are the ones that are more difficult to change down the road. You can always upgrade finishing choices, like countertops and flooring, at a later date. Insulation is much more difficult to upgrade after construction is complete.
If you find yourself struggling between a finishing choice and a fundamental choice, like insulation, it’s a good time to compare the cost/benefit of each item. Run the life cycle cost of that new wood floor you are considering. At the same time, take a look at the return spray foam insulation can provide on your investment. Think back to that car example. People will often upgrade car options or size for comfort. Doesn’t it make sense to do the same for a home construction product that is proven to have a true payback – both in terms of comfort and financially?
Don’t just take our word for it. Use this payback estimator from Fine Homebuilding to find out how many years in energy savings it might take to recoup your investment in sprayed on insulation. If you have questions, or want to learn more, let us know. We’re always available to help.