Looking for cost-effective ways to reduce your home’s energy consumption? Our section on how to save energy at home shares more than 30 changes that will cut costs—and help the planet—from cheap-yet-effective steps to upgrades that require some upfront spending, but quickly pay for themselves from lower utility bills.

For many homes, a big money-saver is to install or add insulation where needed, and to seal cracks and gaps to reduce air leakage. If your home is under-insulated or has a lot of air leakage, heat escapes during winter and your hard-earned money floats away with it. In summer, heat flows into cool spaces in your home, raising your cooling bill.

First, Check for Leaks

Before considering insulation improvements, first find and plug air leaks—holes, cracks, and gaps that let cold air in and warm air out in the winter—and do the reverse in the summer. If you feel drafts in the winter, that’s an obvious sign of leaks. If you consistently feel chilled between furnace cycles, that’s another sign.

One little leak might not seem like much, but the cumulative effect of several can add up to the equivalent of leaving open a small window. Identifying and fixing ways your home passively wastes energy usually costs very little money yet yields significant savings.

You can sleuth out major leaks on your own. Turn off your furnace on a cool, very windy day; shut all windows and doors, turn on all exhaust fans that blow air outside, such as bathroom fans or stove vents; light an incense stick and move around your house, watching where smoke is blown to identify drafts.

A good energy auditor can track down leaks for you, and can use equipment to identify leaks you might not find yourself. Most auditors offer quick assessments and full inspections. Utility companies often help pay for the quickies—typically, your share of the cost is $100 or even nothing.

A comprehensive audit typically costs $400 to $600, but you’ll get a lot more info out of it. The inspector will examine all features of your residence and evaluate your utility spending for the last year. For a full audit, the company should use a calibrated blower door to measure the overall air leakage of your home and perform a thermographic inspection using an infrared camera. Confirm in advance that it will do these tasks; if they’re not included, don’t do it. And you may as well hire one certified by the nonprofit Residential Energy Services Network (Resnet). Certified auditors must complete Resnet’s training program and carry a minimum of $500,000 in liability insurance.

Most leaks occur where different building materials meet—brick and wood siding, foundation and walls, and between the chimney and siding. Other common problem areas are around windows and doors; mail slots; points of entry for electrical and gas lines, cable/internet wiring, and phone lines; outdoor water faucets; where vents pass through walls; cracks or gaps in siding, stucco, masonry, and all foundation materials; and around window air-conditioning units.

Use caulk to seal any cracks or gaps measuring less than 1/4 inch wide and polyurethane foam sealant for larger ones.

To minimize leakage around doors and windows, install weatherstripping. Open-cell foams are inexpensive and relatively inefficient but easy to apply and suitable for low-traffic areas. Vinyl is more expensive and lasts longer. Metals last for years and provide a decorative element for older homes. Also add sweeps to the bottoms of all exterior doors to seal gaps there.

Prevent drafts around outlets and light switches located inside exterior walls by adding insulating receptacle gaskets, which cost less than $5 each.

If you have window A/C units, remove them during the winter, or insulate them from the outside with an A/C cover ($20-$60). During summer, install units so they fit tightly within windows.

Combined, these measures can save five to 20 percent of your heating and cooling costs.

Do You Need to Add Insulation?

All structural elements enclosing your home’s living spaces should be insulated. It’s most practical to add insulation when a home is built or during renovations. Otherwise, accessibility drives costs and often determines what’s worth doing.

Because warm air rises, your attic is the frontline in the battle to conserve energy in the winter. And because most attics are unfinished and contain a lot of empty space, adding a thick layer of insulation is an easy job.

In this region, the U.S. Department of Energy (DOE) recommends attics be insulated at R-49 or better. Check what type of insulation you already have (loose fibers, granules, batts, etc.) and measure its thickness. To achieve an R-49 rating, loose fiberglass particles should be laid at a thickness of about 20 inches, rock wool particles at 17 inches, cellulose (looks like shredded newsprint) at about 13 inches, and batts (blankets that come in rolls) at about 15 inches.

Click here for the DOE's insulation recommendations and guides to measuring what you have.

Unheated areas underneath ground floors like crawlspaces and basements are also good candidates for added insulation. Crawlspaces should be dry year-round (moisture causes insulation to deteriorate), and a vapor barrier should be placed on the floor of the crawlspace.

If your home was built in the 1970s or later, its exterior walls probably have adequate insulation. If your home is older, it might be worthwhile to install it or improve what has deteriorated. To do so, installers have to drill access holes between each pair of wall studs, blow in insulation, and then patch and reseal the openings. As you can imagine, this is much more time-consuming, messy, and costly than insulating an open unfinished attic, basement, or crawlspace. But if you’re doing a major renovation or replacing siding, it’s worth adding this task, if needed: For an average-size home in this area, adding R-11 of insulation to uninsulated exterior walls will likely save $300 to $400 in energy costs per year.

Is It Worth It?

Since for most homes attics are easily accessed and unfinished, they're ideal targets for improving insulation.

How much you’ll pay to improve attic insulation depends on how much you need to add—and whom you hire to do it. For one sample job, to add insulation to increase the rating of an unfinished attic from R-11 to R-49, Twin Cities area contractors quoted Checkbook undercover shoppers prices ranging from less than $1,500 to more than $3,500 for the exact same job.

You’ll find lots of online calculators that estimate projected savings and the payback period based on information you provide about your home, current energy prices, and other variables. But these projections often vary dramatically from actual experience. Particularly avoid calculators or estimates provided by trade organizations.

One useful calculator comes from the Lawrence Berkeley National Laboratory (LBL). Its Home Energy Saver tool provides a full assessment of your current energy use, possible cost-savings—including savings from adding insulation—and payback time for efficiency improvements. It also calculates energy and carbon emissions saved.

Using the Home Energy Saver tool, we found that, for a sample Twin Cities area home, the energy savings from adding insulation will eventually pay off project costs. For our sample home, improving attic insulation from R-11 to R-38 would generate utility savings of about $169 per year, which would recover $2,000 in installation costs in about 12 years.

Get a contract that details the size of the area to be insulated, how much insulation will be installed, the type of insulation, and the resulting R-value (the Federal Trade Commission requires firms to do this). For blown-in loose-fill insulation, the contract should also state the depth in inches of insulation present before new insulation is added and the depth after the work is done. If the firm will be sealing cracks and other infiltration points, make sure the contract specifies the location of these areas.

Before contracting with a company, get a written proposal and contract. Before work begins, a rep should inspect the job site and check for any issues—for example, to make sure there is no exposed wiring in any area before it is insulated. (Insulation cannot be installed over old knob-and-tube–style wiring.)

Other matters to cover in the contract—

  • In attic spaces, the contract should promise that the company will keep attic vents free of blockage. Typically, a company will use fiberglass batts to build a dam around spaces that should not be covered by insulation. In addition, be sure the firm will insulate the attic’s access panel or pull-down stairway.
  • Check for any recessed lighting fixtures (like can lights) that are exposed in the attic. If they are marked “IC,” it means insulation can contact them. If they are not IC-rated, be sure the contractor promises to keep insulation a minimum of three inches away to avoid fire hazard.
  • If ductwork, boiler pipes, or hot-water supply pipes run through the area to be insulated, the contract should require the contractor to insulate them with R-6 insulation.
  • If you will be insulating walls, the contract should specify where the company will create holes, how many, and how the openings will be closed and repaired.
  • Reference in the contract a material fact sheet, which the company should attach, describing the insulation that will be installed (contractors are legally obligated to provide a fact sheet, upon request).
  • Unless your job requires more than one day’s work (most don’t), don’t agree to pay for any work until all work has been completed.

Before paying, check that all cracks were sealed as agreed upon, that the amount of insulation added matches the proposal, and that loose-fill insulation was applied evenly. Also, make sure the crew has cleaned up the area.