How to choose the right insulation to maximise profit

How to choose the right insulation to maximise profit

Matthew Evans, Head of Technical at Kingspan Insulation, explains how you could achieve greater returns simply by specifying the right insulation.

Maximising returns from each plot is a key focus for all developers and one that requires careful planning, particularly in the restrictive and frequently oddly dimensioned spaces within urban and suburban areas. One limiting factor which should be considered as part of this is the thickness of external walls. As energy performance requirements have tightened, it has become necessary to incorporate more insulation within these constructions, shrinking internal living spaces. New research from Currie & Brown has now shown that by specifying thinner, more thermally efficient insulation materials, it is possible to increase the floor space within units and in many cases achieve a notable return on investment (ROI) on the additional cost of the insulation materials.

Over the past three decades, the thermal performance requirements for new homes have become increasingly strict and that process is set to accelerate over the next few years.

In the Spring, separate consultations into changes to Part L to the Building Regulations in England and Wales for domestic buildings (which governs conservation of fuel and power) closed. The consultations set out two uplift options over the current standards. Under option 1 of the English consultation, the external wall U-value (measure of the thermal performance for the wall) used in the notional dwelling would be tightened from 0.18 W/m2K to 0.15 W/m2K, whilst in the Welsh consultation it was set at 0.13 W/m2K. This means developers following this approach would need to achieve improved insulation levels within the construction.

Perhaps more significantly, the English consultation makes it clear that it expects the U-values within the notional dwelling to become the norm for all new homes when the Future Homes Standards are implemented in 2025. The requirements in Wales and Scotland are expected to be equally, if not more, demanding.

These changes mean it is particularly important to pay attention to the thermal conductivity of insulation materials when specifying them. The lower the thermal conductivity of the insulation, the more effective it is at preventing heat loss through conduction. This means a slimmer thickness of insulation can be used to reach a desired U-value. Cheaper insulation materials often have relatively high thermal conductivities and therefore must be specified in greater thicknesses. By investing a little more in insulation materials with lower thermal conductivities it is possible to notably reduce wall depths and increase floor area.

Currie & Brown undertook research to consider the value of this additional floor space.

The research project considered four commonly used external wall constructions:

• masonry cavity wall (with full-fill cavity insulation);

• masonry cavity wall (with partial fill cavity insulation);

• blockwork wall with external render; and

• rainscreen ventilated warm wall.

In each case, two build-ups were considered which differed solely in insulation specification. One build-up used rigid phenolic insulation with a thermal conductivity of 0.020 – 0.018 W/mK, whilst the other featured rock mineral fibre insulation with a thermal conductivity of 0.038 W/mK. All constructions were designed to achieve a U-value of 0.16 W/m2K although the limitations on available product thicknesses meant, in some cases, they achieved lower U-values.

A cost analysis was conducted for each construction. This included a deep review of cost differences such as materials, labour and sundries. Further costs such as preliminaries, contingency and professional fees were not included in the analysis.

20 building instances were then identified as being representative of the British housing stock based on factors such as size, location and rental value. Each building was analysed with the different build-ups to consider how much additional floor space could be recovered by using the phenolic insulation specifications. A ROI figure was then calculated by dividing the additional cost of the phenolic specification by the capitalised value of the space (in terms of rental income and yield). The saleable value of this space was also calculated.

Out of the 20 database buildings that were analysed, 100% showed a positive ROI on the additional cost of the phenolic insulation. The buildings also all showed a positive return on the ‘for sale’ element.

Future Proofing Investment
It’s clear that the changes to energy performance regulations will present additional challenges and costs to developers. The Currie & Brown research shows that by taking a considered approach and looking carefully at how the use of more thermally efficient insulation may benefit useable space within units, developers should be able to unlock additional returns whilst delivering high quality homes.

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