How Much Money Does Insulation Save? Calculate Your Savings

Creating energy efficient homes in Australia - Home insulation batts

Did you know that buildings without proper insulation could be wasting you hundreds, if not thousands of dollars on energy bills per year?

As Australians face higher energy prices, many are asking themselves “How much money does insulation save and is it worth it?”

In this blog, we provide examples of how these savings can add up over time. We also take a look at how shifting your reliance from traditional energy sources to smarter approaches like insulation, can save both money and reduce your impact on the environment. 

Rising energy costs and environmental awareness are driving change 

Only a few decades ago it was common to build a house and not insulate it. So what has changed in Australia? Today most people would agree that renewable energy and sustainability are key issues in our society. This new way of thinking has influenced a lot of the changes we see in our world today, including an energy-efficient house design. 

Rising energy costs have also caused many consumers to question how they can reduce their household energy consumption. 

How much money can I save with proper insulation?

The Climate Council’s latest report has revealed that insulation plays a significant role in reducing energy bills. Data showed that adding insulation and fixing draughts helped Australian households save from $354 to $1,561 each year. 

Below is a table showing how much money can be saved yearly in each Australian capital by upgrading a home with a 2-star energy rating with different types of insulation.

  Adelaide Brisbane Canberra Hobart Melbourne Perth Sydney National average
Ceiling insulation $352 $107 $423 $420 $250 $236 $163 $279
Wall insulation $310 $94 $372 $370 $220 $208 $143 $245
Draught sealing $270 $82 $324 $322 $192 $181 $125 $214
Ceiling insulation top-up $147 $45 $176 $175 $104 $99 $68 $116
Secondary glazing  $142 $24 $171 $269 $101 $56 $39 $115
Reducing sub-floor ventilation $83 $24 $99 $98 $59 $55 $38 $65
Sealing wall cavities $69 $21 $83 $82 $49 $46 $32 $55
Total bill savings $1226 $354 $1471 $1561 $869 $783 $539 $972

Source: Climate Council, Smarter Energy Use (2022)

What are the long-term savings of insulation?

Let us calculate the long-term savings of insulation using the data from the table above. We are going to assume a home with a 2-star energy rating has invested $1,750 in ceiling insulation, wall insulation, draught sealing and sealing wall cavities. Since each state has different savings, we are going to use the national average for each category.

Home energy rating: 2-stars 

Insulation cost: $1,750

Yearly savings: Ceiling insulation $279 + Wall insulation $245 + Draught sealing $214 +Sealing wall cavities $55 = $793


Accumulated savings

Year 1 – $1,750 + $793 = – $957
Year 2 – $957 + $793 = – $164
Year 3 – $164 + $793 = $629
Year 4 $629 + $793 = $1,422
Year 5

$1,422 + $793 = $2,215

The table shows that the initial investment of $1,750 on insulation is fully repaid through savings by Year 3. The following years are characterised by significant savings and by Year 5 the homeowner will have saved a total of $2,215. 

Other factors affecting your return on investment 

It’s worth noting that the numbers used in this text are just approximations. Even so, many homeowners claim to have a concrete return on investment (ROI) from their initial investment in insulation in just three years. Other factors such as building materials and natural shading can also affect heat gains and losses. Constructing an energy-efficient home design with a strategic orientation, windows and additional features like solar panels can also help in improving energy efficiency.

Insulation doesn’t just save you money – it also protects the environment

In a recent report, the Climate Council found that there are “affordable and practical ways for everyone to improve the energy performance of their home whether they rent, own, are building, or live in social housing”. 

At Pricewise, we could not agree more. 

By investing in the right insulation solutions for your building, you won’t just be better off in the long term (potentially saving an average of $793 per year), but you’ll also be reducing your reliance on fossil fuels. 

Source high-quality insulation at Pricewise

Whether you’re a homeowner, business owner, contractor or builder, knowing how much money insulation saves can help you or your clients save on energy costs while also positively impacting the environment. 

We recommend Earthwool insulation, as it is environmentally-friendly, low-itch and contains no added formaldehyde. In addition, it’s very easy to install and has great sound-proofing properties. 

Start saving today by sourcing quality insulation for your project, right here at Pricewise. With Australia’s most trusted insulation brands all in one place, you can order your preferred product directly to your door on a date that suits you.

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