It’s hard to play the waiting game. Yet that’s the state of the insulation market after six years of a housing downturn and three years of stimulus-funded weatherization tax breaks.
The tax breaks, most of which are now expired, helped keep insulation sales from being worse than they could have been during the crash in new-home construction, experts and analysts say. Now predictions of a double-digit rise in residential starts have combined with new energy codes and modest interest in green homes to promote growth in insulation sales once again. The Freedonia Group expects 3.1% annual growth in demand for residential insulation (excluding attic insulation) through 2016, and a 0.9% gain in demand for attic insulation. Those increases, combined with commercial business, are expected to produce an $8.9 billion U.S. market for insulation by 2016, the Cleveland-based market research house predicts.
In most of the country, those increases will come from more construction, not new codes. At present, most states aren’t jumping to adopt the 2012 International Energy Conservation Code (IECC) or its equivalents, which generally call for a 30% increase in insulation values compared with previous codes. Outside of states where new mandates are in place, builders report lots of headaches trying to get customers to make the investment and lower their energy bills long-term.
Aaron Roan, purchasing manager at Lombardo Homes in Shelby Township, Mich., says his company’s customers would rather spend an extra $2,000 on interior finishes than on insulation. Earlier this year, the company discontinued its energy efficiency package, which included R-19 basement blanket insulation, R-15 exterior wall insulation, R-49 attic insulation, and argon-filled windows, due to lack of demand despite its competitive cost and low margins.
The bottom line? Michigan follows the 2009 IECC, and Roan says that calls for about as much insulation as customers are willing to buy.
What’s Required
Most states are at or working toward the 2009 version of the IECC. That version calls for wood-framed wall insulation at R-13 in climate zones 1, 2, 3, and in parts of zone 4. In the rest of zone 4 and in zones 5 and 6, R-13 cavity insulation with R-5 continuous exterior insulation can be used, or, builders can spec R-20 in their wall cavities. The northernmost zones, 7 and 8, call for R-21 wall insulation. Ceilings in zones 1 to 3 require R-30, zones 4 and 5 demand R-38, and zones 6 to 8 require R-49. (See a map of the climate zones on page 36.)
The 2012 version requires builders in zone 3 to use R-20 or the R-13/R-5 combo in their walls; it also ups R-values in zones 6, 7, and 8 to either R-20 in the cavity plus R-5 on the exterior or R-13 in the cavity and R-10 on the exterior.
States like California are pushing the envelope with new requirements effective Jan. 1, 2014, that include added wall insulation, which together are 30% more effective than the previous state code. Maryland already picked up the 2012 IECC and, as of press time, Illinois was working out the kinks in its own adaptation.
Although experts say they’ve noticed an uptick in the popularity of advanced framing techniques as a way to add required insulation to the envelope, many builders aren’t ready to drop products that already work and instead are opting for hybrid systems or sticking with the mainstays that help them meet these new benchmarks with minimal risk.
Builders “are not about to experiment” with changes in framing, says Lucas Hamilton, CertainTeed’s building science applications manager. “The feeling is if they blow it once, they’re in trouble, and they can’t afford to bounce back.”
But for Hamilton, improved thermal conductivity may be worth the price. “If you only insulate between the studs, you’re only insulating 75% of your building,” he says, referencing the continuous exterior insulation options in the 2009 and 2012 IECC codes. “You have to cover your framing because 25% of your building is that framing which is exposed to the conductivity of [exterior] temperatures.”
Despite the greater challenge, the northern zones may be in a better position to respond should these new criteria be applied more broadly, says Hamilton. “The middle part of the country … actually got the biggest change,” he said. “We had a requirement for continuous insulation on the outside back in 2006 in the northern climate zones. Now in 2009 and 2012 that’s slipping south. They never saw that coming.” That was partly due to the overall lack of new construction amid an already price-conscious market, which he says limited building beyond previous code.
Greener Products
Rather than rushing to market with new products, manufacturers are retooling existing brands with greener features.
Johns Manville’s AP Foil-Faced Foam Sheathing board is designed for applications that require high thermal efficiency in new construction and remodels by providing R-values up to R-22.8 to comply with the 2012 IECC’s continuous exterior insulation option.
The Cradle-to-Cradle certified Thermax White Finish Insulation from Dow offers an R-value of 6.5 at one-inch thickness with an embossed white acrylic-coated aluminum facing for clean, durable, and washable basement walls.
Owens Corning’s EcoTouch batt and roll insulation was added to the BioPreferred database, a new labeling initiative by the U.S. Department of Agriculture, and is made almost entirely from natural materials. The company also rolled out its EcoTouch Insulation for Flexible Duct , a thermal and acoustical insulation that uses at least 57% recycled content and is formaldehyde free.
Knauf’s 55.7% post-consumer recycled glass wool insulation products received third-party validation from UL Environment’s Environmental Claims division. Plus, the company’s entire line of North American building products, including its EcoSeal System product family, received Greenguard certification for being formaldehyde free.
CertainTeed’s Hybrid Insulation System uses a three-step process combining a closed-cell foam air barrier with a blown-in insulation thermal barrier, and a vapor and air membrane in the wall cavity.
Material Choices
Location and cost are the biggest factors in deciding which kind of insulation to use, experts say. In Roan’s Midwestern market, the standard is batts in the walls, batts and blown-in insulation in the ceiling, and now (because of code) a blanket in the basement. Nationwide, fiberglass and foamed plastic accounted for 48% and 44%, respectively, of the market in 2011.
In warmer climates with more sunlight, radiant barriers and reflective insulation keep heat out, says Matt Zielenski, who led the Freedonia team’s analysis of the insulation market. His firm expects the market for radiant and reflective insulation to grow by nearly 9% annually through 2016 to $190 million.
Cellulose adds green value to the home without removing too much from buyers’ wallets, says Zielenski, and the largely residential demand for it is expected to more than double by 2016 to reach $175 million. “As housing completions rise very dramatically from their very low base, so too will demand for cellulose insulation,” he says. “If you are leery of fiberglass and you want to spray cellulose, you can.”
Higher construction costs and a need for more education at the builder, sales, and consumer levels are one outcome of the tighter codes. And the more builders and dealers know about the energy-saving value of their products, the higher their likely return. “If builders have 15 minutes of the homeowners’ time … they’re going to hit them with whatever they can in the 15 minutes to get that design right but also to help bring a value,” says CertainTeed’s Hamilton. He adds that if builders don’t know what they’re talking about when it comes to energy efficiency, they’re not likely to waste time talking about it.
Still, the codes’ performance-based and prescriptive approaches let builders decide whether to build at minimum code or tailor the project to individual buyers’ needs. “What the new codes are actually doing is forcing everyone to be on a more even playing field,” Roan says. The extent to which the codes are picked up will determine how much of that spending on extra finishes is redirected to thermal performance.
