The basement often tends to get overlooked when it comes to insulation even though it can be beneficial to many homes. The EPA, for example, thinks that anyone living in a “Zone 5” or colder location should get their basement insulated to save on energy costs. Basically, the colder your region is, the more money you will save by insulating your home.
With that said, insulating your basement only works when the rest of your house is well-insulated. If you have drafts coming in from other areas of your home, you should get those fixed first. Otherwise, the heat (and the savings) will escape.
Insulating the exterior walls of your basement keeps the foundation heated and dry, which eliminates water condensation and therefore mold and mildew. Exterior insulation will not reduce the square footage of the basement (interior insulation will).
If you are constructing a new home and live in a colder area, then you should insulate your interior walls. If you already live there, don’t insulate the exterior walls. The process is lengthy and will take a long time to earn your money back through energy savings (depending, of course, on which basement contractors you choose).
Insulating the ceiling is cheaper than insulating the walls, but it’s not always worth it. First, there are many pipes and wires to maneuver around, which makes this a job only expert basement remodeling companies can handle. Second, this is often less effective at keeping heat in than simply insulating the walls. Sometimes the perimeter of the ceiling is insulated when the walls are insulated, but insulating the entire ceiling (unless for soundproofing purposes) is generally not done.
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