A few years ago, Deb Kearse became interested in new ways to add insulation to homes. Kearse is vice president of sales for Kohl Building Products, based in Reading, Pa. As oil prices spiked and green building ideas spread, she embraced the idea of adding insulation outside of the wall cavity–making room in her stores for sheets of exterior insulation or insulated siding with exterior insulation built into each panel.

"As the market softened, you're still looking for the next big thing to give your builders and remodelers a competitive advantage," Kearse says. "Exterior insulation does that."

The arrival of new products onto the market has made it easier for dealers to promote exterior insulation, but the building concept remains unknown to most contractors. That means it will take some persuasion to get them to try it. Here are a few selling points you should use:

  • Fight energy costs, meet building standards. The price of heating oil and gas is up again, but wages are still low. Savings on heating bills will continue to be an important selling point. That's the carrot. Here's the stick: In some parts of the country, officials now require new homes to meet new standards for energy efficiency, such as the federal Energy Star certification. Energy Star recognizes conventionally framed homes that bulk up with exterior insulation rated R-3 or more. In the colder half of the country, that requirement goes up to R-5. A 3/4-inch continuous sheet of foam insulation will typically be rated R-4. Insulation can also be added to siding, with an R-value ranging from 2 to 3 or more, depending on the product.
  • It's a small price to pay. A 3/4-inch sheet of foam sheathing placed behind vinyl siding will typically cost 30% more than vinyl siding alone, according to the National Association of Home Builders. It also adds about 30% to use insulated siding instead of conventional siding.
  • Stop thermal bridging. In the world of insulation experts, there's increasing talk about "continuous insulation." One big reason why is that this insulation format crosses over and covers the framing studs, which often pass heat and cold through the walls in a process called thermal bridging. Continuous insulation blocks that energy leak.
  • This old house needs exterior insulation. Adding insulation to an existing home typically means tearing out inside walls. But if the siding already needs substantial repair or replacement, it's easy to add exterior insulation.
  • Reduce noise. External insulation also helps block out noise from outside the house. Manufacturers say insulated siding can cut the audibility of certain types of noise in half, especially high-frequency noises like the sound of wind.
  • This stuff is different. Some buyers may hear "exterior insulation" and have bad memories of the Exterior Insulation Finishing System, a type of external insulation similar in appearance to stucco and made largely out of foam insulation and a gluey sealant. The system became popular during the first energy crisis of the 1970s and later became ensnarled in lawsuits because of problems with moisture and its vulnerability to damage from even light impacts. The latest generation of exterior insulation keeps delicate insulation safely tucked away behind conventional hard exteriors like vinyl, fiber cement or wooden siding.
  • Stop mold and rot. Careful external insulation can help stop moisture from building up–which could lead to mold, rot and even worse problems. From the inside of the home, an average human breathes out six gallons of water vapor a day. There's no stopping some of it from getting into the walls of a home. But a continuous layer of insulated sheathing helps to keep the spaces inside the wall warm enough so that water vapor won't. From the outside, insulated siding provides a smaller opening for rain to get in and is typically designed to be vapor permeable, so water can naturally evaporate away.