Sustainable Housing – Envelope Misconceptions and Implications

Opening Questions

  • How can I understand the law and principle of diminishing returns?
  • What are the primary diminishing returns issues in building envelopes?
  • What misconceptions persist about wall/insulation thickness and upgrades?
  • What misconceptions persist about utility penetrations in the thermal envelope?
  • What misconceptions persist about mismatched elements in the thermal envelope?
  • What misconceptions persist about building envelope tightness and indoor air quality?
  • What misconceptions persist about passive solar, in light of weak links and net benefits?
  • What are the implications of a full understanding of diminishing returns of building envelopes?


Even though knowledge is the only instrument of production that is not subject to diminishing returns (opening quote), the human mind too often ignores the concept in assumptions about scale. This deficiency leads to poor choices in many life circumstances, and it leads to notably egregious outcomes in the design and construction of buildings. Understanding the two related concepts of marginal analysis and opportunity costs would help grasp and effectively utilize the law of diminishing returns, but these are also too often ignored or misunderstood. It is impossible to evaluate diminishing returns without utilizing marginal analysis to calculate per-unit costs and benefits, at the margin, while scaling up. When applied to the building envelope, people embrace the logic that more is better; a heavier structure is stronger, and more insulation will reduce heat loss and energy use. Unfortunately, we too often fail to compare diminishing benefits against the cost of additional units, even when they approach negligible benefit. Without marginal analysis, homeowners and designers keep bulking-up the building envelope until budge runs out, making no reasoned calculation of whether each additional unit to the envelope was worth adding.

If the concern is for long-term structural integrity, it would be very difficult to quantify with precision the additional benefit for each step up in structural heft. Fortunately, we do not need to consider those complexities, because building codes in the U.S. have evolved over time with practice, cases, and research to now mandate a minimum inspected standard that achieves indefinite life. As we outlined in Chapter 5, and supported with objective research and data, the code-compliant house is expected to serve an indefinite life, if constructed with quality and maintained effectively. Whether homeowners are concerned about outliving their homes, passing a valuable asset to their heirs, or assuring good stewardship in the use of all the materials and energy that went into constructing the home, they may rest assured that the code-compliant house structure in the U.S. meets or exceeds those objectives. An important exception is for homes that are located in areas of high risk to natural disasters, such as hurricane, tornado, or earthquake. In those regions, local building codes may still be evolving with what seems like new weather patterns and more fierce and frequent storms. For most Americans, however, the typical standard construction of 2×4 wood stud walls is adequate for long-term structural integrity, and adding further structure will be more costly (in dollars and embodied energy) than beneficial (in longevity); it will also quickly escalate costs that are unlikely to be appraised at constructed cost and included in financing. Given the realities of consumer demand, an upgraded structure is more likely to result in a real (inflation-adjusted) financial loss at resale, or a lower return on investment compared with a standard structure. In other words, there are decreasing returns to scale, and building codes mandate a minimum structure along the scaling-up arc that already exceeds a cost-benefit optimum.

Diminishing Returns of Insulation

If the concern about the building envelope is reducing heat loss and energy use, the following paired graphics are instructive on the diminishing returns of insulation. The chart on the left is the effectiveness profile of insulation in resisting heat transfer, or heat loss, ranging from zero to seven inches. The image on the right takes the data from the performance profile and shows more intuitively how insulation resists heat transfer/loss across the full thickness of material. The right-side image could be considered a cross-section of insulation in a wall cavity during heating season, with the warmth of interior air from the left being lost or transfered through the insulation to cooler outside temperatures to the right.

A line graph and a gradient show the diminishing returns of insulation. The effectiveness increases quickly at the beginning of adding insulation thickness, but soon the effectiveness is not increased much by the added thickness.

These trends set up an uncomfortable juxtaposition. It is still assumed that being environmentally responsible means building a house with a premium envelope. But the high cost of that premium makes this option accessible only to the wealthy and, even for them, it can be a poor financial investment due to financing and resale markets. Those who cannot qualify for a larger mortgage that would be needed to finance a premium envelope, or who cannot afford down payments in excess of 20% because appraisals do not fully value envelope upgrades, or who simply cannot allocate a higher percentage of a limited and squeezed income, have no choice but to seek more affordable housing, and that usually means a more basic thermal envelope. With these realities, it is no surprise that so few houses in the U.S. are built with premium building envelopes–the presumed sustainable home–and conventional wisdom suggests that most homebuyers, then, do not build or buy sustainable homes. However, due to declining costs of solar PV, and the advantages now of onsite renewable energy generation, we reject this juxtaposition as a false choice. This is where our three part typology is relevant, and how onsite renewable energy generation is linked with building envelope decisions.

Opportunity Costs

The second issue that makes the concept of diminishing returns challenging to grasp and utilize with rationality is opportunity costs, defined as the next best alternative forgone. Most people understand this concept intuitively and utilize it effectively–if subconsciously–for small purchases with short durable use. If I really want a burger and fries and soda, but I only want to spend $2, I know that I can’t have all three, so I prioritize and choose one. The opportunity cost of choosing a burger is the benefit I would have derived from the fries and soda I didn’t choose. For larger purchases, and especially those that have long durable use, the human mind struggles to organize and understand this concept of opportunity costs. Building a house and investing in solar PV both fit that description; both are big purchases with expected long lives. A failure to consider opportunity costs on purchases this big often leads to suboptimal choices for the individual, and outcomes for society, and we discuss these later in this chapter. But where it connects to diminishing returns and marginal analysis is more subtle. We already established that increasing both structure and insulation have diminishing returns. The first unit returns the most benefit; this is sometimes referred to as the biggest bang for the buck. But as each additional unit is added, even when marginal benefits exceed marginal costs, the bang for the buck ratio declines. Assuming that there are many other competing interests for available dollars or budget, diminishing returns should be changing opportunity cost calculations even when returns are still positive, yet evidence of choices in the residential building industry suggest they are not. This becomes even more perplexing when we look at the poor economic returns for nearly all building envelope upgrades beyond code compliance.

Return on Investment

The Department of Energy reports that the average U.S. household spends $1,945 annually on energy, from all uses (DOE, 2018a), and that 48% on average is used for conditioning indoor air (DOE, 2018b). Consequently, the average American household spends approximately $934 annually for heating, air conditioning and ventilation (HVAC). If building envelope upgrades are selected primarily to reduce heat loss, and reduce energy bills, those savings would come from reduced need for–and operation of–HVAC equipment. If it were possible to positively match each building envelope upgrade to the reduced energy use commensurate with that upgrade, it would be a simple process to calculate the financial return on investment (ROI) and determine whether that upgrade should be added for economic reasons. However, since direct matching of these elements is impossible because of the wide variability of factors, another way to consider ROI is to build hypothetical scenarios. The following chart displays that data for four levels of upgrade-savings possibilities. This analysis uses the energy data for the average American household and works in reverse to identify the largest expenditure for an upgrade to break even with commensurate energy/cost savings over 30 years.

Financial Model Assumptions (no inclusion of environmental cost of energy production):

  1. Average annual American household cost of energy for HVAC operations ($934)
  2. Cost of funds: 4.5%, proxy rate for 30-year mortgage (higher COFs, lower max. cost)
  3. Rate of energy inflation 3.0%: conservative annual escalator, given historical trends
  4. 30-year period for break-even ROI: common mortgage length and long-term analysis

Payback calculator hosted at:

What this analysis demonstrates, for the first scenario, is that if a particular envelope upgrade successfully achieved 5% reduction in energy need and cost from reduced HVAC use ($47), the maximum initial investment, for that upgrade to simply break even over 30 years, is $1,050. That is a very small allowance against the cost of almost any envelope upgrade. The other end of this scale is even more enlightening. Even if it were possible to reduce HVAC use and costs by 50%, which we will show is an unlikely achievement in any case, the maximum initial investment in upgrades to attain that reduction, and simply break even over 30 years, is $10,500. In short, $10,500 in upgrades will never come close to reducing HVAC energy use and cost by 50%; it is a miniscule amount compared to the cost of upgraded wall systems, insulation, windows, and doors. Stated differently, $10,500 will not purchase much in thermal envelope upgrades, and it certainly will not buy enough to cut HVAC costs in half. This analysis is based on the average American household, but we find that it scales quite well in either direction from the mean, both in envelope size and in the energy behaviors of occupants. While we do not have data for cases that would represent extreme outliers, such as for mansions or tiny homes, the physical limits and current economics of the analysis suggest similar conclusions even at those extremes.

Accounting for Environmental Externalities

Environmentalists may chafe at these findings, at least in part because they fail to account for the environmental externalities of energy production from fossil fuel sources. Doing so for all possible scenarios would add nearly infinite variability, but the final verdict remains the same. As an example, the environmental externality of electricity produced in the SERC Virginia/Carolina region would add $0.0378/kWh to the cost of grid-distributed energy, at $80 per metric ton of CO2e. This is based on the actual fuel mix for the region, which is close to the national portfolio, and converting nitrogen oxides and carbon dioxide emissions to CO2-equivalent (CO2e). Internalizing the externality would add a 37.8% cost premium to regional grid rates, which we can add to HVAC costs for a comparative analysis.

Financial Model Assumptions:

  1. Environmental externality included (37.8%); represents $80 per metric ton for CO2e
  2. Average annual American household cost of energy for HVAC, with CO2e ($1,287)
  3. Cost of funds: 4.5%, proxy rate for 30-year mortgage (higher COFs, lower max. cost)
  4. Rate of energy inflation: 3.0%, conservative annual escalator, given historical trends
  5. 30-year period for break-even analysis, common mortgage length and long-term anal.

Payback calculator hosted at:

A couple of broad conclusions can quickly be drawn from this comparative analysis. First, even at these higher allowances for thermal envelope upgrades, the dollar amounts still pale in comparison to most upgrade materials and systems. More detail is offered in the Case Study section of this chapter, but for a sense of magnitude, envelope upgrades to the case house cost in excess of $100,000 and didn’t come anywhere close to offsetting half of the HVAC energy needs and cost. Second, and for wholistic perspective, environmentalists should also be concerned about the increased embodied energy sunk into upgrades to the thermal envelope; the case analysis at the end of this chapter will discuss that more thoroughly. And finally, it has already been established that solar PV is the better choice for household energy; a strong financial investment even if we do not consider its enormous environmental benefits, and the embodied energy of a PV system pales in comparison to any envelope upgrade that has meaningful impact on reducing energy need and cost.

The charts above provide analysis for just four specific scenarios of reduced HVAC need and cost, with the highest reduction rate of 50%. Readers may be wondering, like we did, how different thermal envelopes actually perform in reducing household energy needs. The industry literature is crowded with theoretical claims of energy savings from specific materials, methods, and wall systems, but we were able to find very little evidence-based impact from whole-house lived experience. Part of this may be due to the complexity and integration of many component parts of both the thermal envelope and HVAC systems. For example, there are many different types of structures, windows, and doors, and houses have a wide range of permutations in the proportional coverage of each of those elements. Weather variations and broad choices of HVAC system-type and efficiency rating add further permutations, and that is all before there is any account for number of inhabitants and their unique energy behaviors. Perhaps because of these challenges at the whole-house level, manufacturers and policy interests have focused on lab-based research of component parts. While we did not question those research findings, we found it an impossible task to piece it all together with any level of confidence or magnitude.

Performance of Thermal Envelopes

Because our research team included seasoned industry professionals with years of experience in residential design and building, we realized that we could build a sizeable database of existing homes of various building envelope system and HVAC type. If we could also obtain energy use data and a measure of conditioned space to proxy HVAC energy needs/use, the analysis would provide a rough sense of impact by system, and help answer the question of magnitude of impact. There were many factors that we could not control for, a challenge indicative of this task, but at least with all the households in relative close proximity, this analysis would control for weather variation and energy rates (all uses). Knowing that we also could not statistically isolate individual systems and impacts with precision, we expected that the blunt measures we would obtain would still provide a sense of magnitude of impact of building envelope upgrades.

As the raw data accumulated, most individual cases fell into three wall system types, 2×4 wood stud (code base), 2×6 wood stud (common mid-range option), and insulated concrete forms (ICF; premium system). Since ICF is often considered the most robust and premium building envelope type, these three classifications would provide information on the purported best system (ICF), the most basic application of building code (2×4), and a mid-range system between (2×6). The results of our analysis were shocking. Not only did the purported best thermal envelope fail to deliver energy savings, households in ICF structures averaged more energy use per square foot of living space than either of the two lesser structures.


  1. Data includes averages across wall system classification of more than 40 cases
  2. The differences in energy costs are not statistically significant (small sample size)
  3. Some data screening to account for anomalies such as well pump and EV charging
  4. Volume of conditioned space rather than square foot would provide a more direct link between HVAC energy use and building envelope type; however, volume data were difficult to obtain in retrospect, and for the smaller sample for which we had volume measures, it did not appreciably alter overall placement or magnitude outcomes.

We need to be clear that our analysis is not a precise and direct measure of the impact of thermal envelope system on HVAC energy needs and use. However, across averages of over 40 cases, one would expect less overall energy use in premium envelope structures due to reduced HVAC need and operations; that is why environmentally-conscious homeowners accept an enormous cost premium in construction. In the region of our study and case home, where there is little known threat of catastrophic structural damage from natural disasters, why would homeowners pay such a high premium in construction cost or purchase price if not for an expected reduction in energy use and cost, or reduced environmental impact? All of the ICF homeowners in our sample selected the more expensive wall system because they thought it was the more responsible environmental choice. Lab-based research and component-specific benefits of upgraded wall systems paint a convincing story in the industry, even as advocates struggle to claim overall magnitude of impact, and almost no one is utilizing marginal analysis, opportunity costs, diminishing returns, and cost of funds to an overall value assessment.

Controlling for Variables

The complexity of integrated systems and plethora of permutations is noted above as one reason for a lack of whole-house, whole-systems impact analysis of building envelopes types. Another reason is the human element. Two same-sized families living in identical side-by-side homes will not demand the same amount of energy. Individual and collective interests and behaviors can mean that two families could have vastly different energy demands. Skeptics could argue that homeowners of the ICF structures in our sample must be more wealthy to be able to afford the much more expensive construction or purchase price, and maybe that explains a more voracious use of energy in the home. On the other hand, each of the families in our sample that chose to build or buy an ICF home did so for supposed environmental responsibility, and one could argue that would show up in thrift for energy in all areas of life. This lack of a perfect control group mechanism blurs and confuses envelope system impact assessments; fortunately, our case project would present a revealing comparison both on impact and on cost comparison.

Reducing environmental impact was the preeminent priority in design of the case home and selection of building materials and systems; every element was considered through that filter. Careful and long-term study of the literature in the building industry, best practices, and research led our team to a premium thermal envelope, and insulated concrete form (ICF) walls specifically. The homeowner had been living in a new house with many similar characteristics, except that the thermal envelope was code-minimum. The square footage and conditioned volume were nearly the same, both had partially submerged (walk-out) basements, and they are located in the same neighborhood, which controlled for weather. Perhaps most notably, the inhabitants would move from the code-minimum house to the premium thermal envelope house with the same people and energy patterns and behaviors. In addition to the premium envelope, which would be expected to reduce operational energy, the new case home was equipped with a geothermal heat pump and more energy-efficient appliances. The code-minimum, home utilized a basic 13 SEER air-to-air heat pump and standard appliances. Our research team expected reduced energy use in the new home, but we were left with the question of overall magnitude. 

The case home would have a limited period where the human conditions would be the same as in the code-compliant house. Fortunately, the six month timeframe would span across cooling, swing, and heating seasons, and we compared month-to-month to control for temperature and other weather variability. By the time monthly energy data began arriving for the new home, our research had already introduced a measure of skepticism on the energy efficacy of a premium thermal envelope. Still, we were surprised to discover that the case home had used nearly 10% more energy than the code-minimum home through the first six months of operation. We cross-checked energy use with average monthly temperatures across the two successive years to ensure that weather variation was not so extreme as to skew operational demand. The side-by-side data is provided below:


  1. Electricity is the only energy source in both homes
  2. Thermostats set to same readings for both cooling and heating seasons
  3. People and use patterns intentionally kept the same through comparison period

Average monthly temperatures: mean of means, from Weather Underground URL

This two-home comparison provided one of the best available cases of control group (same people and patterns) testing, and this study was independent of the broader dataset of regional homes categorized by thermal envelope type. The results and findings of both studies were conclusive; that premium thermal envelope homes (at least those represented by ICF wall systems) do not in reality result in lower operational energy demand and use. How could this be? The following chart highlights select features of the two homes that should have impact on overall operational energy use.

While the list of features in the chart above is not meant to be all-inclusive, the first four are known to be significant factors that in isolation should translate to lower energy use in the case home. The fifth feature, mechanical ventilation with an ERV, would clearly tip operational energy use in the opposing direction, but we did not encounter in the research much energy analysis on that element and its trade-offs. Further, we expected the energy impact of an ERV to be more than offset by the combination of the other factors. Among the data we collected on regional homes and energy use, we noted that all of the ICF homes in the sample employ mechanical ventilation except one; that one ICF (non-ERV) exception was among the best performing on operational energy use, but there were also wood-framed homes in a similar performance range. Could the use of an ERV wipe out operational energy savings from a premium thermal envelope? We will return to this question in the energy analysis chapter, but first we need greater understanding of the impact of weak links and mismatched elements in the building envelope.

Even a structure without windows, doors, vents, and utilities would not achieve code-required R-values for the entire building envelope because the structural members not only displace insulation, but their thermal bridging properties work at opposing purposes by transferring heat through the structure. And since people do not want to live in homes without windows and doors, and electricity and plumbing, we need to accept still further compromise of whole-house heat loss through those weakest elements. As weak(er) links increase in size and number, they become responsible for a larger proportion of the overall heat loss from the thermal envelope and progressively diminish the proportional value of insulation in structural elements.

It should be clear by now that thermal envelopes have many weak points and mismatched components in resistance to heat loss, and the strongest element by far is the insulation across structural sections. Now consider the diminishing returns on insulation thickness explained earlier in this chapter, and the performance profiles arcs that show most of the value in heat loss resistance is already achieved by code-minimum requirements. Wall systems are most often upgraded to reduce heat loss, even though there is negligible value gained from that isolated element, and nothing gained if weak links are not strengthened from independent processes. Furthermore, the opportunity costs of very expensive wall system upgrades are often the weak(er) links that do not get addressed. Priority effort and home building budgets should go toward improving the weakest links; here are a few strategies for addressing the same elements noted above.

An extreme example helps illustrate this lesson. Consider two houses side-by-side in winter heating season, having identical designs, but one with a premium thermal envelope and the other with a standard code-compliant structure. Now consider that a hole the size of a dinner plate is cut into each front door and left open for the free flow of air; this would be an extremely weak link. We quickly realize that nearly all the heat produced inside these two homes would escape out the front door breach, and if both houses had the same heat source, their energy use and cost for HVAC operations will be nearly identical. In other words, the very expensive premium thermal envelope house will not return savings in operational energy from reduced heat loss. Now consider that a small hole in the front door may not actually be extreme in comparison to all of the non-obvious list of compromises noted above. The holes that we do not often think about could be several 3-4 inch diameter pipes through the envelope for dryer, plumbing vent, range hood, and several bath fans. It could also include two 6-inch pipes for the fresh and exhaust sides of an ERV. Most of these will have dampers or gravity louvers, but none are airtight, most will allow an outside wind to pass through, all of these pipes displace insulation from the thermal envelope, and many are metal with high thermal bridging properties. And this list of “holes” does not even include compromised insulation from utility incursions in exterior planes, or poorly installed insulation, or thermal bridging through structural members, or windows and doors with vastly lower insulating value than walls or ceilings.

Even if all of these strategies are employed, these weak links remain significantly weaker in resistance to heat loss than wall system structures across insulated sections. Given these physical realities, and the insulation performance profile at code requirements, it is not surprising that upgraded wall systems do not significantly reduce operational energy; this is consistent with the findings of the regional database of homes and also with the case home comparison. The simple conclusion is that upgrading wall systems beyond code minimum, without strengthening the weakest links, is like throwing away money and using more resources than necessary. With priority first given to the worst offenders, which are also the least-obvious, the next step is to consider the more obvious weak links of windows and doors.

Mismatched Elements

Because code-minimum construction in the U.S. requires more insulating value in walls and other structural planes than is possible with even the best windows and doors, the closest match of whole wall components is code-minimum structure and premium windows and doors. Other combinations progressively widen the gap between the relative strength of structural elements and the relative weakness of windows and doors, with wider gaps further compromising the desired benefits of structural elements in the thermal envelope. This bears repeating. Investing in more robust structural elements (as in thicker and better-insulated walls) returns less benefit to offset the higher cost, as the gap widens between the insulating value of the wall structure and the windows and doors mounted within. Very wide gaps will eliminate most or all of the benefits of the thicker wall; this leaves a homeowner having spent significant treasure and embodied energy in a robust structure, but not able to receive its intended benefits. Here is a matrix that addresses nine broad combinations of matched and mismatched elements:

We have returned to our three-part classification of homes in relation to their suitability or availability for onsite clean energy generation. The cells shaded in red highlight scenarios with highly mismatched elements; these should be avoided unless the structure is required by code (as in hurricane or tornado areas), and the budget does not allow upgraded windows and doors. There is only one combination with these elements closely matched (yellow shaded), which could be recommend for SORTA and SNAIL homes with goals of reducing operational energy because onsite clean energy generation is either limited or not available. Even though the green-shaded scenario has mismatched elements, that represents the best combination of cost, value, resource-use, and environmental responsibility, when onsite clean energy generation can meet 100% of household energy demand, as in a SOAR home.

The green and yellow cells also provide a fantastic example of opportunity costs informing choices in homebuilding. Selecting premium windows and doors for a typical average-sized home can cost $20,000 or more, and the benefits in lower HVAC costs will never break even on the investment (when including cost of funds; see previous chapter). Meanwhile, installing enough solar PV to generate total net annual household energy needs will cost less than $20,000 initially (net after ITC; see Chapter 3), and that investment will do far better than break even (see chapter 3), while directly eliminating a significant climate footprint. Furthermore, if any spending on premium windows and doors uses budget that would otherwise go toward onsite solar PV, the outcome will be worse for the homeowner and society. The homeowner would be selecting the choice that provides the worst return on the original investment that is also least likely to be valued in appraisal and financing. That choice would also be worse for the planet, with greater use of resources for much less environmental benefit, and an opportunity will have been lost to eliminate household climate emissions (and possibly also from transportation).

Mid-range structures require a bit more nuance. There are a number of options between a base code-minimum structure and a premium envelope, but the most common mid-range choice is the upgrade of wood stud walls from 2×4 to 2×6. This adds more structural material (timber), more insulation, and more finish materials, as in window and door extensions. The classification averages in our regional database indicated promising efficacy in reducing overall energy use from an upgrade to 2×6 wall structure, but without more research we would like to temper any enthusiasm for that wall type. First, this structural envelope included the fewest cases in the database, and too few for us to draw broader conclusions. The second reason has to do with utility incursions in exterior walls. Electrical boxes are particularly egregious, and the common practice across most of the U.S. is to recess these into walls were required by code (for outlets and switches), regardless of wall thickness. In code-compliant 2×4 wood stud walls, such boxes displace more than half of the cavity insulation, creating weak points in an otherwise unbroken plane. Additionally, the practical challenge of installing insulation around these boxes almost always results in imprecise fill or notching, leading to air infiltration. One member of our team has performed energy audits on hundreds of homes, where he commonly finds breaches around and through recessed electrical boxes; see images below.


Recessing electrical boxes in exterior walls invites significant compromise through and around those features, and it adds weak links that widen the mismatch of elements and further reduces the proportional value of the strongest elements of the thermal envelope. The 2×4 wood stud wall is adequate for structural integrity and longevity. That base wall is also thick enough to provide optimal levels of insulation in stud cavities, but not if holes are created every 10-12 feet for electrical boxes. In the previous chapter we appeal for design work that minimizes utilities in exterior planes, and attractive surface-mount fittings where codes require placement along the thermal envelope (see examples in previous chapter). If the homeowner or builder is not willing to make these accommodations, than we recommend upgrading to 2×6 stud walls simply to reduce the impact of these weak links.

Opportunity Costs

An upgrade to thicker walls requires sacrifice or cost in one of two ways. Either living space is reduced with the same exterior footprint, or the footprint is enlarged to retain the same living space. This can be significant in both dollar cost and environmental impact. The case home has three levels with linear wall footage of 144, 144, and 92 respectively. Since it was built with thick ICF walls, the total 380 linear feet amount to 250 additional square feet, just for the additional wall thickness, compared to basic code minimum. At the constructed square-foot cost of $160 for the case home, the extra square footage alone might represent $40,000 for what amounts to unusable living space. What makes this even more troubling are the findings of our study that suggest premium envelopes do not appear to render operational energy benefits; in fact, our data show ICF homes using more energy, both for the two-house comparison and in the larger regional dataset. 

This case provides another excellent example of opportunity costs in building systems that also helps place these choices in perspective. Using the example of the case home, we will consider that the opportunity cost of enlarging the footprint to accommodate thicker ICF walls as installation of solar PV and switching to EV transportation fueled (charged) by the onsite clean energy generation.

As if this comparison is not convincing enough, consider that the $40,000 in extra costs associated with an enlarged footprint does not even account for the cost premium of the more expensive upgraded wall system, which can run into six figures for moderate-large homes! Once again, even if the premium envelope showed success in reducing operational energy demand (which our findings do not support), these additional premiums are far more in initial investment than any rate of benefit could return for financial break even. Stated another way, premiums paid for thicker envelope sections will be many times more than the cost of an onsite solar PV installation that will not only fully offset household operational and transportation energy, but also render an attractive financial return on investment. And the latter will have sequestered much less embodied energy!

Mechanical Ventilation (need for)

Earlier in this chapter we noted that all of the ICF cases in our regional dataset–except one–had an ERV installed and in use. Another claim by premium envelope advocates is that they are so airtight that mechanical ventilation must be added to maintain healthy indoor air quality. In the recent past indoor air quality concerns have been largely in the areas of carbon monoxide, volatile organic compounds (VOCs), and molds. Carbon monoxide poisoning can be fatal in high concentrations, but risks have declined significantly in modern homes with fewer open flames and code-required CO sensors/alarms. VOCs off-gas from building materials and adhesives, can accumulate to high concentrations in enclosed spaces, and may create health risk to inhabitants. However, VOC off-gassing levels diminish significantly with time, and an initial flush regimen for newly-constructed homes will minimize the threat; VOCs occur in nature and are ubiquitous in low concentrations that do not threaten human health. Further, manufacturers have also found ways reduce VOCs in building materials. Most contractors now purchase and install no/low VOC products; we recommend addressing this in design and building specifications. Mold also occurs in nature and is always present; low concentrations do not threaten human health, but homes without sufficient ventilation and humidity control can permit mold colonies to thrive and threaten human health. ERVs provide ventilation, but indiscriminate use can make indoor humidity levels worse. If envelope systems are designed and constructed properly, they will dry effectively in multiple directions, and HVAC use in tightly enclosed spaces can effectively control humidity.

Carbon dioxide (CO2) is a relatively new concern for indoor air quality and human health. CO2 receives a lot of attention in climate science, where general atmospheric concentrations are now typically above 400 parts per million (ppm). CO2 at those levels is not known to be harmful for human respiration, though climatologists document many current harms and significant future threats from a warming planet occurring primarily from rising atmospheric CO2. Indoor concentrations of CO2 have long been used as a proxy for the aesthetic quality of indoor air (ASHRAE 2013), but only recently has it emerged as a direct pollutant and threat to human cognition (Satish, et al. 2012). A recent controlled study led by a Harvard environmental health researcher (Allen, et al. 2015) found that from a base CO2 rate of 550 ppm, “cognitive function scores were 15% lower for the moderate CO2 day (~945 ppm) and 50% lower on the day with CO2 concentrations around 1400 ppm.” These statistically significant findings add an entirely new variable to indoor air quality and health and, based on our small sample of readings, it appears that most homes in the U.S. have an indoor CO2 problem if they are not ventilated in some way (ERV or open windows).

Even homes that employ mechanical ventilation are likely to see unhealthy concentrations of CO2 from extended human (and possibly pet) respiration in enclosed rooms, unless effective and sufficient distribution of fresh air is designed into the system. Bedrooms, especially, are susceptible to this problem, because people spend many hours sleeping, in relatively small spaces, and typically behind closed doors. ERV manufacturers specify that fresh air input from the ERV must be dumped into the return side of a central air ducted system. ERV specs warn against connection on the supply side because the much stronger HVAC blower fan would compete against the weaker ERV fan; this could damage the ERV fan, and possibly even push HVAC-conditioned air back through the ERV and out of the building. Most residential central air systems rely on just one or a few central returns; often one on each floor of a multi-story building. These central returns are also placed in the largest open areas; it is very rare to find effective returns directly out of bedrooms. When fresh air from the ERV is dumped into return side ductwork, it will flow to the path of least resistance, which is out the central return air grille(s). HVAC units place an air filter where the return air enters the blower fan, and the filter offers resistance to ERV-freshened air to flow through the air handler and out the supply vents. When the ERV runs at the same time as the HVAC system, the fresh air will be distributed to all spaces with supply vents; however, the conditions for both to operate in tandem are infrequent. Since bedrooms rarely have direct returns, and since ERV operation together with the HVAC is only by chance and infrequent, the rooms most in need of continuous fresh air (bedrooms) get very little, and none if the HVAC does not operate.

Case Project Example

The case project offers a practical example to highlight this problem. The home has three levels and, as typically designed, the HVAC contractor placed one large return in the open space of each floor. The ERV fresh air input was ducted to the return air plenum just ahead of the filter, as required by ERV specs. Predictably, this pushed the fresh air out the three central return air grilles when the HVAC system was not operating. This problem was positively determined, with no fresh air flowing through supply vents, and all of it flowing out of the central return grilles; that fed the large common areas with fresh air, but not individual rooms. Bedrooms with doors closed overnight, encounter CO2 levels close to 2,000 ppm with two sleeping occupants, and nearly 1,600 for one, even with the ERV running continuously (24/7). If the HVAC runs during the night as required periodically to maintain thermostat setting, some of the fresh air is supplied to the bedrooms, but in dilute concentrations, and the infrequency of operation still allows CO2 to concentrate to unhealthy levels in occupied enclosed bedrooms. After documenting this phenomenon, which we have since learned is common in nearly every ERV installation, we wired the HVAC blower fan to operate whenever the ERV runs. This unconventional fix solved the problem by drawing the ERV-freshened air through the filter and out the supply vents, more evenly distributing fresh air into all rooms. It solved the distribution problem, but at the cost of additional energy demand, which we will discuss further in the next chapter on energy.

Readers may at this point be wondering about CO2 concentrations in their own homes, and especially in bedrooms. Fortunately carbon dioxide monitoring equipment has recently become affordable to homeowners; small CO2 meters can be purchased for about $100 as of this writing. This is allowing homeowners for the first time to measure and track indoor CO2 levels, and we have discovered that every home we’ve been able to test in our region exhibits concentrations high enough to cause cognitive impairment. The severity obviously depends on size of space, number of humans (and pets) respirating, and whether (and frequency) windows and doors are used. ERVs have historically been recommended only for premium envelope homes that were thought to be so tight as to require mechanical ventilation. Ironically, we have found unhealthy levels of CO2 in all house types, even in very old buildings, and we contend that even code-minimum structures can be tight of air infiltration with careful design, quality craftsmanship, and a recommended blower-door test during construction (see chapter 5). In other words, every home in the U.S. should consider this indoor CO2 problem and design systems to address it. Houses without forced-air central HVAC systems are at particular risk because they have no distribution network for fresh air delivery.

We expect fresh air design will eventually work into residential building codes as the prevalence and health implications of indoor carbon dioxide become more widely understood. In any case, indoor air highly-laden with CO2 should be replaced, as needed, with outdoor air; this could occur through leaky windows and doors, intentionally opening/cracking windows, or by mechanical ventilation. Any of these scenarios represents weak links in the thermal envelope, which further diminish the proportional value of the most robust thermal elements and further erodes rationale for investments in wall systems beyond code requirements.

It is not advisable to expect that water/moisture will never be present inside a walls. The presence of moisture is not problematic if the wall system is designed to facilitate drying and, ideally, a wall should be able to dry both to the interior and exterior. Drying will occur to the inside when outdoor temperatures moderate and inside air is dehumidified. Drying to the outside will take place naturally when the ambient air is dryer, but the sun’s energy driving against the wall is the most effective drying agent. In the northern hemisphere, north-facing walls dry more slowly; another reason to buffer the north side of a residence with the garage or other semi-conditioned or unconditioned space. To permit drying, the other materials in the wall system must be vapor permeable. For example, closed-cell foam insulation is a vapor barrier, whereas open-cell foam is not; both are effective air barriers.

Returning again to exterior insulation, which we suggest is a reasonable upgrade to the base 2 x 4 wall, though it’s not critical if not required by local building code. Even a thin cover of insulation that breaks the thermal bridging of the structural members of the wall (studs, top and bottom plates, window and door frames, etc.) will return measurable benefits in reduced heat loss and energy bills. We like rockwool rigid board for this application, due to its properties of being a natural mineral, flame retardant, and advantages dealing with moisture and drying. Board as thin as half an inch would be ideal, but it more commonly sells in thicknesses of one inch or more. Rockwool in standard 1.25-inch thick rigid board adds an R-value of five to the whole wall, except over windows and doors, vents, or other penetrations. Thickness (and R-value) of continuous exterior insulation should be guided by requirements for specific climate zone (see Figure 5.x above). Rockwool breathes, which is important for outbound drying of the sheathing; it also sheds (or drains) water effectively, and its structural integrity is not compromised by moisture. Exterior insulation that is not too thick allows fixing of siding to the structure without the additional step of adding furring strips, and rockwool in a thin rigid board package provides greater support than softer materials for exterior fixing through the material. The relatively thin depth also requires less labor and material for window and door extensions than thicker applications.

Recommendations for SOAR homes

Homeowners with SOAR conditions, and who are able to install enough solar PV to meet their annual energy needs, will find that the most environmentally-friendly building envelope structure is simply complying minimally with local building codes. It bears repeating here, as at several other key places in this text, that quality and integrity in construction of the building envelope is paramount to maximizing sustainability objectives through longevity of use and life of construction materials. Building codes in the U.S. already require R-values well in excess of maximum cost-benefit gains from insulation, so there is no need to add more for economic reasons, and since SOAR homeowners are generating all of their (net) energy cleanly onsite, there is no need to add more insulation for environmental, or sustainability reasons. There may be other reasons a homeowners may wish to add wall thickness and more insulation, such as for greater indoor living comfort, but in our view that would be sacrificing environmental objectives for other personal concerns. Safety and security in areas at high risk to natural disasters provide a notable exception. Homes built in coastal regions susceptible to hurricane winds and possible storm surge will follow location-specific recommendations, and these most often require more extensive connecting hardware, and in some cases a more robust structure. The difference in these regions is that structural upgrades are required or recommended for personal safety and structural longevity rather than for energy use and loss.

Figure 5.x below offers the recommended wall system from our team for SOAR homes that utilize solar PV energy generation, for the first seven climate zones. There is some variability in local building codes, notably in natural disaster-prone regions, and those will legally supercede these broad recommendations by climate zone.

Note that the recommendation of exterior insulation is to meet minimum requirements of the International Residential Code (2015), and this is primarily for effective long-term management of moisture in wall systems rather than for energy use and loss. It is interesting that moisture management in some climate zones drives insulation requirements beyond what would be optimal from an economic and environmental cost-benefit basis for energy use and loss.

Recommendations for SORTA homes

SORTA homeowners are working to reduce operational energy needs just to the limits of restrictions on solar PV, and we recommend addressing the weakest links in wall systems, but not the walls themselves, as we will explain in this chapter and the next. SNAIL homeowners may also wish to reduce operational energy needs, and we again recommend a priority of addressing the weak links of windows, doors, and utility incursions; more on that later. There are too many possibilities, in an evolving and dynamic industry to make specific recommendations, but these principles can be applied with the counsel of an architect, builder, and energy modeler.

To gain as much value as possible from the insulation cavity, we recommend minimizing incursions of utilities in exterior walls. This starts at the design stage with careful thought given to where plumbing fixtures are located, preferably adjacent to interior walls where piping can run without compromising the insulation envelope. Even where plumbing fixtures need to be placed against an exterior wall, as is often the case with a kitchen sink, the supply and drain pipes can be routed through conditioned floor and cabinet spaces rather than stubbed out from exterior walls. Design work should include locating light switches on interior walls, where practical, and we advocate for surface-mount electrical boxes where placement is necessary on exterior walls, either by owner preference or by code (see image to the right). Surface-mount wall outlets can be integrated with the baseboard to minimize intrusion into room space (see image to the right). While there are surface-mount electrical boxes and fittings on the market, we would like to see more attractive and integrated options; outlets and switches integrated with trim as factory-finished products. Electrical wiring may need to route through exterior walls in order to meet code requirements. Those lines do not compromise the insulation cavities in a significant way, but if batt insulation is used in the cavities, it is very difficult to notch perfectly around cables, and that typically results in gaps and compromise. This is one reason we advocate cellulose over batt-type wall insulation.

At both the design and construction phases, it is worth paying special attention to insulation and thermal bridging at the connecting points between building envelope elements. Where walls join and where walls meet ceiling and roof structures are areas often neglected from an insulation and heat loss perspective. The wall-roof connection needs to be considered first in the design stage, with sufficient space to retain the R-value of the wall through the corner and into the roof/ceiling insulation plane. Too many designs either pinch the corners, allowing less depth for insulation to match the R-value of the walls, or the design makes it a challenge for installers to reach and effectively fit the requisite insulation.


The insulation challenge where walls intersect is more of a concern for the builder than designer. The figures below show typical installations on the left, where a section of the wall is left without insulation, whereas the image on the right side demonstrates an alternative framing design that avoids insulation gaps and provides more space for stud cavity insulation.

A drawing shows two walls meeting at a 90 degree angle and the studs inside. On the left, one has a gap in the corner with no insulation. On the right, the gap is gone by turning a stud 90 degrees.
Insulation challenges and solutions at corner sections of wood-framed walls
A diagram shows two walls meeting at a T. On the left, studs close in a gap of no insulation where the walls meet. On the right, this is fixed by replacing 3 smaller studs with one bigger one.
Insulation challenges and solutions at T-sections of wood-framed walls

Windows and Doors

“A chain is only as strong as its weakest link” is a helpful metaphor to think about the whole building envelope. Weak links in the thermal envelope can appear in unintended ways such as from air infiltration or thermal bridging, as noted above, but they also come from intended design elements, such as windows and doors which can have insulating values significantly lower than the walls they are mounted in. The insulating value of windows and doors is represented as a U-factor, or U-value, and commonly ranges between 0.07 and 1.20. U-factor is the inverse of R-value, meaning that dividing U-factor into 1.0 provides an equivalent R-value to compare against other insulation profiles. Using this formula, some of the best windows on the market have an equivalent R-value of about 14, and some of the worst examples have an R-value below ONE! Lower U-factor (higher R-value) windows and doors are clearly preferable; however, they sell at a very high price premium, which requires a long-term cost-benefit analysis.

The best performing windows have triple-pane glazing, fiberglass framing, and casement style, whereas typical standard windows today are often double-pane glazing, vinyl framing, and double-hung style; there are also many other variations. One of the most reliable studies on window performance was conducted by the Department of Energy’s Pacific Northwest National Laboratory (PNNL), which looked at the specific difference between double and triple-pane glazing. While the PNNL study showed a whole-house energy savings of 12.2% from triple-pane versus double-pane glass, the price premium for the better insulated windows provided very long payback periods of between 23 and 55 years (DWM Magazine, 2013). The Family Handyman estimates payback in “a few decades” (see sidebar). Furthermore, if cost of funds and energy inflation are added to the analysis, which again is more realistic, triple-pane windows likely never return a financial payback. Still, SNAIL homeowners wanting to make the most sustainable choices for overall ecological impact may wish to upgrade on the weak links of windows and doors. However, rather than jumping to triple pane glazing, we recommend starting with type (casement over double-hung), then to frame material (wood over vinyl), and then inspect meticulously for proper installation and air-gap sealing.

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The best window installed poorly will perform worse than the worst window installed well.  Since SNAIL homes cannot generate onsite renewable energy, and if they receive energy directly or indirectly from fossil fuels, then the sustainability goal is to reduce operational energy demand in the home, and this needs to begin with the weakest links. Even for SNAIL homes, we do not recommend bulking up wall systems with structure and insulation beyond code minimum because the performance benefits are slight, yet the ecological impact from materials use is significant; we explain this over the next two chapters. Furthermore, when premium walls are coupled with windows, which are always weaker in resisting heat flow, the heat loss breach through weak-link windows overwhelms the benefit of increasingly robust wall systems, further jeopardizing the benefits and investment of a premium structural envelope. The weaker the weakest link, the weaker the chain, and the less value derived from the strongest elements. This leads to a principle of matching and integrating various elements of the thermal envelope, a topic explored in the next chapter.

Fortunately, there is helpful independent data available when researching and selecting windows and doors. The National Fenestration Rating Council (NFRC) provides independent energy ratings as a consumer service. Manufacturers display performance ratings in product specifications and on a window label (see below). Air leakage would be the worst compromise for a window or door, but there is little variance in that metric across brands and models. U-Factor, then, becomes the most salient performance and comparative data point. Solar Heat Gain Coefficient and Visible Transmittance will be addressed in the chapter on energy. NFRC also does this testing on doors; see for more information. However, the same principles outlined above for windows apply to exterior doors.

As with wall insulation, the U-factor rating on windows refers only to the glass; it does not include heat loss performance of window frames or assemblies, nor does it provide qualification about air seals and infiltration from installation quality. Just as full-wall R-values are lower than the R-value performance of just the insulation in the wall, whole-window R-values are effectively lower than just the glass component rated in U-factor, and unfortunately whole-window R-value ratings are not available. Fixed windows are both less expensive, and they perform better on heat loss than operable windows. In rooms that have more than one window, consider making only one operable for egress and ventilation, and the rest can be fixed glass.

Need for Ventilation

One question often asked about a robust building envelope is whether it can be built too tight. Before the days of advanced building science, precision tools, and durable sealants, it was impossible to build a house too tight. However, as methods and materials improved, tighter building envelopes reduced heat loss and energy use, but they also trapped more moisture and stale air, both of which may be unhealthy for inhabitants. Opening windows is a low-tech solution to this problem, but it’s not recommended when outdoor temperatures or humidity could cause more harm, or more energy to run HVAC equipment. In those conditions, mechanical ventilation is recommended to exhaust stale air and replace it with fresh outdoor air, though through a mechanism to scrub humidity and temperature differences. The most common solutions today are the energy recovery ventilator (ERV) or the heat recovery ventilator (HRV); both of these are effective in exchanging air, and they offer about 90% efficiency in heat loss, but they also require energy to operate, and the outdoor air they bring in often requires more energy in HVAC operations. These trade-offs are discussed more in the energy chapter. Any house built with integrity, and detailed attention to air infiltration, should plan for mechanical ventilation. Even a standard code-minimum house can be just as tight as a home with a premium building envelope, and any tight house will suffer unhealthy levels of CO2, among other risks. Most code-minimum homes in the U.S. today would benefit from an ERV, but they are not required by code and are still quite rare. Our research showed that new and recently-built homes in the U.S. have an undiagnosed CO2 problem if there is no mechanical ventilation; we’ll address this concern over the next two chapters. Most custom homes built with a robust envelope do include mechanical ventilation; however, the operational energy needed to power this equipment works against the objective of minimizing operational energy use and loss from a premium envelope.

Opportunity Costs

Another factor to consider in building envelope upgrades is the opportunity costs; that is, what could be done with the same funds if not for the upgrades. Bolstering structural elements of the thermal envelope and upgrading windows and doors can quickly add tens of thousands of dollars to construction costs, and even into six figures; that is well more than would fund a solar PV system that could provide 100% of the home’s energy needs. For an average size American home, the cost of a premium envelope, with premium windows and doors, could purchase two new (long range) electric vehicles plus a solar PV system large enough to power the home and transportation. Shifting housing and transportation to clean renewable energy would cut the average American’s greenhouse gas emissions by at least 50%. If the homeowner laments the social and global injustices of climate change, a premium envelope forgone would fund enormous and perpetual relief to keep many from starving, or help thousands of poor people adapt to changing climate conditions. The possibilities for opportunity costs are endless, with just a few mentioned here. Stepping back from the homeowner’s tree (their home) to view the forest of global implication and consequence can help keep these choices in perspective.

Build it with Quality

One final note before our case study to briefly address durability and longevity of the structure. Our data and analysis favors a lighter building footprint, especially when onsite renewable energy generation is available, as in a SOAR home. However, too many houses built to code minimum standards are also built with poor craftsmanship. The industry, as it works in practice, generally incentivizes short-term outcomes for the initial sale and warranty period, but it does not incentivize long-term durability and structural longevity. We strongly recommend that homeowners employ an independent, third party inspector to maintain quality control. This could be an architect or a trusted and independent builder. Our research found that homes built to U.S. code minimum standards can last indefinitely with careful use and effective maintenance, but that requires initial integrity and quality in every aspect of the construction process.

Case Study

All three of us researching this project had a common goal at the outset to make the best decisions for overall sustainability in designing and building a new American-style home, though modest in size and appointment. The homeowner studies and teaches environmental and energy economics, and from the beginning planned for overall carbon-neutrality (or better) through onsite renewable energy generation by solar PV. The architect’s specialty is building science and sustainable design, and the builder is known for environmental stewardship and constructing earth-friendly homes. Each of us had been following trends and recommendations in the building industry for years and, on that basis, designed a highly robust building envelope for the case study home: thick ICF walls, 12-14 inches of open cell spray foam insulation in the ceilings, 2-inch rigid foam under the slab, fiberglass-frame triple-pane casement windows, and some of the best insulated exterior doors on the market. The house was built to premium thermal envelope specifications, combining thick and well-insulated structural elements with some of the highest performing windows and doors available. Expecting the building envelope to be super-tight, the design included for an ERV to mechanically ventilate the home.

Unsurprisingly, the pre-loan appraisal was 28% below construction estimate and final cost, confirming our general assessments about how sustainable homes are valued in appraisal and finance markets. This also confirmed our judgement that prototypical energy-efficient homes seemed to be accessible only to wealthy homeowners, requiring them to infuse personal funds well in excess of the typical 20% downpayment to avoid private mortgage insurance (PMI). In this case, the homeowner would need to contribute 28% of the constructed cost in addition to 20% of the assessed/financed value, with the balance financed by a mortgage; very few Americans have sufficient resources for this level of investment. Still, in the interest of building sustainably the best we knew how, we marched on with an enthusiastic commitment to crack the code on this dilemma with a combination of critique on appraisal and financing practices and fresh calculations of full-cost pricing and long-term cost-benefit analysis. We would use this project (the case house) as an opportunity to review and analyze each decision in part, and the project comprehensively.

As we analyzed the economic and environmental implications and tradeoffs of specific choices and elements in the case study home, our findings began to crack our original assumptions that had distilled from our close and long-term following of the green building movement, which advocates more robust thermal envelope systems. When we expanded our analysis more generally beyond the case home, we found that very few envelope upgrades return good financial benefits, even when adding the implicit cost of environmental externalities. Ironically, it was our encouraging analysis of solar PV and its integration into a whole-systems and whole-life perspective that changed our assumptions. Indeed, it created a paradigm shift that led us to create a new three part classification scheme based on availability of solar PV. We could no longer endorse the conventional wisdom of thicker and more-insulated walls for both economic and environmental reasons. This is even the case for SNAIL homes that do not have availability for solar PV, and where upgrades should be made first to the weakest links of windows, doors, and utility penetrations (see next chapter). Further, even these limited upgrades are not likely to return financial benefits, even over decades, and appraisal/finance/market systems are likely to result in sunk cost asset losses for the homeowner. Further, as the electric grid continues to replace fossil fuel energy with renewables, any heavy investment in the thermal envelope will be stranded as assets, and unfortunate in materials impact. 

The case house is located where solar PV is limited. There is a hard cap for residential solar at 20 KW, and the utility also employs a soft cap that adds a standby fee for systems between 10 and 20 KW; the extra charge degrades economic viability. This soft limit might classify a home in this utility as SORTA for some families, but the homeowner of the case study project had a long history of energy use in several code-minimum homes that could be generated with a solar PV system well below the 10 KW threshold. The case study home should have been designed and built to SOAR standards, which would have dramatically reduced financial cost and the embodied energy of construction. Complemented with a 7-8 KW solar array mounted on the roof, that SOAR package would meet all operational energy demand of the home and, in addition, power electric vehicle transportation. Specifically, and in retrospect, we would have constructed the same lower floor slab system (with under-slab foam insulation), but with insulated concrete form (ICF) walls just in below-grade applications. Above grade structure would have been 2×4 wood stud walls with continuous rigid rockwool exterior insulation and dry-blown cellulose in stud cavities. Ceiling insulation would have been chosen to achieve the code minimum of R38 and the specific material selected by application area. Windows and doors would have been selected on criteria of durability and value (cost against energy performance), and this would have led to much less costly choices. Windows would have been double-pane instead of triple-pane, and frames likely wood or vinyl instead of fiberglass. We would still select casement style windows, for both insulating value (U-Factor) and appearance, and have many of them fixed glass to limit weak links from those elements.

Without our classification scheme, and analysis on economic and environmental impacts of building envelope upgrades in combination with onsite renewable energy generation, the case home was designed and built for what we later termed, SNAIL conditions. It was only in the course of construction, and case analysis, that our findings uncovered the need for a new classification scheme, which then identified the mismatch of the case home to its conditions. We now believe that it is not the most sustainable home we could have built, and we disclose this transparently with significant lament. Rather, a SOAR home would have been energy net neutral (or positive) in operations, complemented with a 7-8 KW solar PV system, but with less embodied energy in construction. Furthermore, if the home had been built to SOAR recommendations, the cost savings (opportunity costs) of a lighter thermal envelope could have purchased a new long-range electric vehicle and still leave a six-figure balance to meet other needs or sustainability goals. With a broad look at the whole global picture (the forest), removing an additional 25% of the family carbon footprint by powering all transportation with onsite renewable energy (in addition to 25% eliminated from housing demand) would have been a much better sustainability choice than constructing a heavy building envelope. There is no doubt that the case home will be comfortable to inhabit for many years; the premium thermal envelope is not as drafty as homes with weaker windows and doors. From our previous knowledge, we understood that these comfort qualities were gratuitous byproducts of building sustainably, but in retrospect, we would have gladly sacrificed a small degree of personal comfort for a lighter impact on the World’s poor and the Earth’s natural resources.


The big story of this chapter and topic is an upending of conventional wisdom on how to sustainably address the thermal building envelope. A new paradigm emerges from an integrated and whole-systems view of the impacts of building and operating residential homes, with a significant new variable of falling prices on solar PV across critical economic thresholds. Recall that it is now less costly in most regions of the U.S. to install onsite solar PV than not to install it. If a household can meet its annual energy demand by generating clean renewable energy onsite, the thermal envelope diminishes in importance from a heat loss and operational energy use concern, and increases in importance from a resource use and embodied energy perspective. That is because the ratio of embodied energy to operational energy is magnitudes better for solar PV–with both initial impact and/or increasing size–than for almost all systems and material upgrades of the thermal building envelope.

Process systems, such as a blower-door test before insulation to identify and seal gaps, will repay the investment quickly and many times over during the life of the building, but most material and systems upgrades to the envelope (beyond building code requirements) offer very poor financial and environmental returns, and many do more damage than good. For all homes, a premium building envelope actually worsens overall ecological impact, and upgrades become more about personal comfort than sustainability. SNAIL homes, however, do not have the good fortune to be able to install clean and renewable onsite energy generation; SNAIL homeowners who want to make the most sustainable choices within their unfortunate constraints may employ limited weakest-link upgrades to reduce heat loss and operational energy, knowing that most have poor financial return and increased impact in embodied energy. In the end, a SNAIL house is not sustainable unless or until grid-tied energy transitions to clean renewables. SORTA homeowners will plan for solar PV sized up to imposed limits, and then add thermal envelope upgrades to bring household energy demand down to that limit. The largest impact on heat loss will come from addressing the weakest links, first by sealing air leaks, for which we recommend a blower door test during construction, and then upgrading windows and doors to reduce the mismatch of elements (see next chapter). SNAIL and SORTA homeowners are advised that appraisals and financing will likely not value thermal envelope upgrades at installed cost, and market values may not approach prices that allow homeowners to recover their cost at resale.

Residential building codes in the U.S. already require insulation factors well in excess of thresholds that tip cost-benefit value; adding more insulation therefore provides minimal and diminishing benefit for increasing cost (both financial and environmental). Rather than adding more insulation, we recommend efforts to maintain the integrity of the insulation spaces throughout the thermal envelope. Particular egregious examples of encroachments and compromise of insulation cavities is plumbing pipes and electrical boxes and housings; we see market potential for attractive and practical surface-mount fittings where utilities are code-required on/in exterior walls. A design to meet code requirements on wall insulation in climate zones 4-7 should include a continuous exterior application to break the thermal bridging of structural members, such as wood studs and wall top and bottom plates. Adding R-value on the exterior surface of walls then allows a thinner wall structural assembly; 2×4 wood stud walls provide sufficient structural integrity, durability and longevity if the construction quality is strong, and we recommend a third-party quality control process to ensure integrity. A relatively thinner (2×4) wall has the lowest impact on the environment from a resource and embodied energy measure and, if built with quality and maintained adequately, it will likely have similar longevity to relatively thicker wall systems. If air infiltration is minimized via blower test sealing, and if insulation cavities are protected from utility incursions, the code-minimum wall will reduce heat loss at or beyond cost-benefit ideals.

Even a relatively thin (2×4) wall can be part of an overall thermal envelope constructed tight enough to warrant mechanical ventilation, though many other factors will determine the need, including quality of windows and doors, and practices and sensitivities of occupants. There is a large step in cost and commitment to opt for mechanical ventilation, which is discussed in greater detail in the energy chapter, but it includes initial costs for equipment and installation, and ongoing costs of operation. The energy use of operating an ERV or HRV should be weighed against predicted energy saved by upgrading the thermal envelope, but if indoor air quality is unhealthy, then mechanical ventilation is required regardless of energy and cost. Look for deeper analysis of this in the energy chapter.

Homeowners selecting building envelope upgrades in the name of sustainability might conduct careful analysis on the opportunity cost of those choices. Upgrading the thermal envelope can quickly build to tens of thousands of dollars in upfront cost, and most have higher environmental cost from embodied energy while returning minimal and diminishing benefits. What is the next best alternative for those funds? How could they be used to become more sustainable in other areas of life, or to meet acute human needs, or help the poor adapt to a changing climate? Economists like to remind consumers that every choice has opportunity costs, but it is too often an elusive concept that escapes rational consideration. In the case of sustainability, a step back to look at the forest instead of each tree can be instructive. 

Our research and analysis strongly suggests building a SOAR home for both economic and ecological reasons; this starts by selecting a site, design, and building orientation for efficient solar capture. With active PV sized to meet the entire annual household energy needs, a basic wall structure is adequate, though we strongly advocate measures to ensure quality build and craftsmanship. A 2×4 wood stud wall with ½-inch sheathing provides sufficient structural integrity and longevity. Taped building wrap applied to the sheathing is an effective application to reduce air infiltration, and adding continuous rigid insulation (climate zones 4-7) on top of the wrap breaks the thermal bridging of structural members and contributes to code-minimum iinsulation levels. Our team has a preference for rockwool rigid board for continuous insulation, for reasons outlined in this chapter, but there are other good options on the market. With an inch (or more) of rigid exterior insulation, we prefer dry-blown cellulose to fill stud cavities; cellulose is relatively inexpensive, is made from recycled materials, and is an effective insulator when installed properly. Once again, we strongly recommend keeping utilities out of exterior walls. Building code insulation requirements in ceiling spaces is more than sufficient, though it may be advisable to add slightly more if it can break any thermal bridging. For lower ground floor slabs, we recommend at least 2-inches of foam under the concrete.

SORTA and SNAIL homeowners may need to begin upgrades from that base, and we would suggest starting with the weakest links, which are most likely windows and doors. Upgrading the weakest links will offer the best cost-benefit tradeoffs for those specific elements, relative to addressing walls or roof systems, and it will improve the benefit of structural elements if more of their benefit in reducing heat loss is not otherwise lost to relatively weaker links. SORTA homeowners should add upgrades to the base structure only to the point of reducing heat loss to fall within limited energy production levels. Ideally, SNAIL homes would be avoided but, if necessary, the weakest links of the thermal envelope should be given priority for upgrades.


  • Prioritize clean and renewable energy generation; select a building lot where solar PV is available, and then design and orient the home for solar energy capture.
  • Ensure build quality of the structure, air gap sealing, and insulating process by hiring an independent quality control agent to visit the site at critical points.
  • We recommend code-minimum structure, which in most regions is 2×4 wood stud walls. This wall depth is adequate if willing to surface-mount electrical boxes, otherwise 2×6 stud walls should be selected to minimize weak links/spots in the thermal envelope
  • Consider the opportunity costs for every upgrade considered and selected for the thermal envelope
  • When selecting windows and doors, consult chapters 5 and 6 for trade-offs and mismatched elements discussion
  • Select windows specific to their orientation for optimal insulating and solar heat gain properties


  • Don’t build a new house with SNAIL conditions if there are SOAR or SORTA options.
  • Don’t build a new house with SORTA conditions if there are SOAR options
  • Don’t consider solar PV as an afterthought; build it into the design and plan
  • Don’t equate sustainable housing with thick walls and expensive construction
  • Don’t assume more insulation is always better, or the better choice overall
  • Do not assume thermal envelope upgrades beyond code minimum return on the investment or are better for the environment; most do/are not.
  • Do not fail to understand thermal envelope compromises from windows and doors, or the impact of mismatched elements
  • Do not select windows that have not been matched to their directional orientation
  • Don’t place compromising utilities in exterior (thermal envelope) walls or ceilings
  • Don’t expect appraisals to meet construction cost of building envelope upgrades

Other Chapters

Chapter 2

Chapter 3

Chapter 5

Chapter 7

Chapter 8

Chapter 9


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