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Return on Investment

Insulation: guaranteed return on investment

When it comes to energy saving technologies it makes sense to invest in the one which delivers the best results.

Of the many available choices – from heating, cooling and hot-water systems to lighting, cooking and electrical appliances - building insulation offers the easiest and most cost-effective method of saving energy in homes and offices. Insulation simply targets the greatest source of energy waste in buildings.

Heating and cooling requirements , more than electricity usage, make buildings voracious energy consumers. The quest for the ideal indoor temperature accounts for two thirds of a building’s total energy consumption. And most of this energy is wasted due to inadequate insulation. By using well-proven energy efficiency techniques, 80% of a building’s energy needs - be it for heating or cooling - can be cut.

Insulation: a proven money saver!

Insulation is the best investment you can make when renovating. In less than 4 years your can expect to recoup your investment. Over 30 years you can expect a return of sevenfold return on investment!

Families and companies who invest in energy efficiency benefit from lower energy bills, a great indoor climate, as well as, enhanced comfort and safety – as mineral wool also significantly reduces noise pollution and protects buildings against fire.

According to the German body, Deutsche Energie-Agentur, renovating a very poorly insulated 150m² house, built to 1970s energy standards, would reduce household energy demands by 3,600 litres of oil per year.  At German 2008 prices, the saved heating oil corresponds to more than €3,000 per year. Of course, not all buildings date from the 1970s, but, on average EU buildings could emit nearly five tonnes of CO2 less per year if properly insulated.

The European insulation industry is a world leader in energy efficiency systems for buildings. Be it pitched or flat roofs, external walls, internal partitions, ceilings, floors or frame construction, insulation is, by far, the most reliable way to reduce a building’s energy use; insulation accounts for more than half of total energy reduction potential.

Eurima’s Ecofys III study found that, when upgrading an existing building, return on investment is maximised if energy efficiency measures are coupled with general maintenance and retrofit measures. Such opportunities are rare, however. The normal retrofit cycle occurs just once every 30-50 years, although this cycle can be shorter for commercial properties.

Builders, planners and policymakers need to actively encourage building occupants to invest in proven energy efficiency solutions, such as mineral wool insulation, when other renovation work is planned. Even when general renovation is not foreseen, investing in retrofitting solely to upgrade the thermal performance of your building makes real financial sense. And cost savings are possible regardless of whether you live in a hot or cold climate.

Roof and cavity wall insulation are particularly cost-effective because they are easiest to install. Ecofys has demonstrated that such insulation provides guaranteed return on investment across all European countries and that buildings in warm and moderate climatic zones benefit significantly.

Case study

Roof insulation:  700% Return on Investment!

  • Insulating a pitched roof of a residential building in a moderate climate would need an investment of €30 per square metre (m2) of roof.
  • The insulation provides the building with annual energy savings of €7.5 per m2 of roof, per year.
  • The initial investment is thus paid back in 4 years.
  • Over a period of 30 years this amounts to more than a sevenfold return on the investment, or €225 per m2 of roof would be achieved. This is a return of 7.5 EURO per EURO invested. If energy prices continue to rise, the return on investment will even be higher.
  • The effective lifetime of mineral wool insulation can be as long as the house itself, so the cost-effectiveness and savings potential of insulation could equally be calculated over a 70-100 year period.