Energy Efficiency Affects Market Value

A study funded by the EPA concludes that energy efficiency substantially increases the market value of homes.
This peer-reviewed study, “Evidence of Rational Market Values for Homes Energy Efficiency,” conducted for EPA by Rick Nevin and Gregory Watson of ICF, Incorporated, was published in the October 1998 issue of The Appraisal Journal and showed:

  • Energy-efficient homes have a higher market or resale value regardless of how long you own your home.
  • Home value increases $20 for every $1 reduction in average annual utility bill.

R-Values: SIPS vs Stick Built

According to the Structural Insulated Panel Association (SIPA): The foam plastic core of a SIP provides its insulating properties. Depending on the type of foam used (eg., EPS, XPS, polyurethane or polyisocyanurate),  R-values are in the range of approximately 4 to 7 per 1 inch of foam thickness.  This results in superior energy performance characteristics in walls and roofs. For example, a 4 inch thick SIP wall is often used as a substitute for a 2-by-4 stud wall, also 4 inches thick overall. Both have 3 inches of insulation. The SIP wall has insulation R-values of 14 to 25, where as the stud wall with fiberglass or mineral wool only has R-values of 11 to 15.
The overall R-value of the stud wall must then be down-graded to account for the area where there is no insulation because of the space taken up by the stud framing. This space where there is a lack of insulation can be as great as 25%.
Because there is a rigid foam core in SIPs panels, there isn’t any settling or compression of the insulation as there normally is with fiberglass insulation in a stud framed wall. Other advantages to the solid, ridged foam core panel are far less moisture absorption, less dust saturation and fewer cavities that could permit convection or drafts. All these characteristics improve energy efficiency in a SIPs built structure.
The overall R-value of a conventional stud wall with 2 x 4 studs and 3” of R-13 fiberglass, as indicated in the Thermal Envelop compliance Guide to the Model Energy Code is R-13.1. A SIP wall with OSB encasing 3” of extruded polystyrene foam (R-value + 17.5) is R-20.

Energy Savings Potential

These R-Value figures do not tell the entire story however. In the real world, SIPs appear to outperform the conduction resistance of conventional walls even if they are assumed to be the same in R-values. This may be due to the differences between foams and fibers in the degradation of items that are not included in R-value calculations, like gaps, moisture, dust, settling and others. This was clearly illustrated in a recent field test conducted by the Florida Solar Energy Center (FSEC) under sponsorship of the US Department of Energy. Two identical houses were built side by side in Louisville, Ky. They were built simultaneously by the same builder. One had conventional framing; the other was built with SIPs. However, wall and roof thicknesses were adjusted so that both had the same calculated R-values. Both houses were monitored for heat loss performance and the SIP house dramatically outperformed the frame house. More importantly, efforts to forecast seasonal heating energy savings showed a 14 to 20 percent savings for the SIP house in Kentucky’s climate. In the published report, the researchers stated that, “…there seem to be other factors, which remain unaccounted for, which cause the panel house to use less heat energy.” Homeowners throughout the US are experiencing benefits through lower heating costs, draft-free houses and greater comfort.
In another study performed in 2008-2009, Oak Ridge National Laboratory performed a comparative test between a SIP-built and a stick-built house. The stick-built house used standard 2×4 framing and fiberglass insulation. The SIP-built house used 3 ½” foam core OSB panels. The SIP-built house used 53% less energy compared to the stick-built house.


As a result of high-energy savings due to the insulating performance of these homes, the U.S. Department of Energy and Environmental Protection Agency (see EPS/DOE Energy Star Program) are supporters of the use of SIPs in housing construction.

SIPs also offer savings in ecological terms. By minimizing the use of dimensional lumber, panels can reduce stress on old-growth forests, and the energy efficiency of the SIPs panel system reduces dependence on non-renewable fuel resources. SIPs structures are far more comfortable and economical to own and operate than conventional structures. While this is certainly important in owner-occupied structures, it also makes structures much more attractive to lenders, tenants and buyers as well. Perhaps even much more important in today’s construction industry is speed and simplicity of construction.