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How You Can Save $1,000s With An Energy Efficient Basement

Sam Smith Foundation Repair Consultant

Picture of a beautiful, energy efficient basement

Are you wondering how to make your basement more energy efficient?

You’ve come to the right place!

In this article, you’ll learn:

  • Why basements tend to lack energy efficiency
  • Key areas to focus on when improving your basement’s efficiency
  • How an energy-efficient basement saves you money

And much more!

So, if you’re looking to save money on your energy bills and help lower your home’s carbon footprint, keep reading our guide below!


Why Energy Efficient Basements Matter

As the colder weather approaches, we’re all getting ready to shut off our air conditioning and crank up the heat. For most of us, that means our electric bills will be skyrocketing as we struggle to keep our homes warm and comfortable.

There are tons of guides available online on keeping drafts and heat leaks in your living area to a minimum, but what many homeowners don’t know is that basements can actually be a HUGE strain on the heating bill. Making your basement more energy efficient can keep you more comfortable through the winter and save you quite a bit of money in the meantime.

Below, I’ll be letting you in on some industry secrets of an energy-efficient basement: why it matters, how to do it, and how much $$ you can save. Let’s get started!

Why Do Basements Lose Heat?

Before we dive right into how to make your basement more energy-efficient, it would probably be helpful to explain why basements aren’t energy-efficient in the first place, right?

So, you know how your home is insulated, right? If you tear down sheetrock along any of your exterior walls, you’ll find insulation behind it, stuffed in between the studs. Insulation is required according to the building code in most areas throughout the United States, and for good reason. Insulation batts fitted in your walls help retain warmth in your home during the winter and cooled air in your living space during the summer.

Basically, insulation helps moderate the temperature inside your home by keeping air of an unwanted temperature outside; it makes your house liveable.

Insulation probably seems most important in your basement. After all, there’s just porous and non-insulative concrete separating the indoor space from the ground outside.

The thing is…

Basements aren’t usually insulated! If you have a finished basement and you pull down some sheetrock, you’ll very likely find a void made by studs and a concrete block wall behind them. THIS is the primary reason why they most often cost you more in heating and cooling!

There are several other reasons basements tend to be a massive draw on your heating and cooling system. I’ll discuss these below and offer some suggestions on how to fix the problem.

How To Make Your Basement More Energy-Efficient

There are several things you can do to make your basement more energy-efficient. In fact, most homeowners can save up to 20% on their energy bills just by following one or two of the below tricks!


As I explained before, the above-ground living area in your home is well-insulated, which is precisely why it’s more energy-efficient than your basement. So the obvious thing to do in order to save on your energy bills would be to insulate your basement. Sounds simple…

But it isn’t quite that simple. Insulating your basement can be a bit more challenging than a simple DIY project.

Insulating basement walls

The first home I bought had a finished and insulated basement. I thought I was all set to avoid heat loss from the space. Little did I know that the previous homeowner installed the insulation. To make a long story short, it got wet, harbored mold spores, and ended up costing me over $12,000 to remediate. After spending that much, I learned my lesson: my future basements would be set up and insulated properly.

For example, you need to know what R-value your insulation needs to have in order to provide ample protection from the outside temperatures. In extremely hot or cold climates, a higher R-value will be required to keep the uncomfortable air outside. Every home and location is different, so consulting a professional is your best bet when it comes to nailing down the R-value required in your basement.

You also need to ensure that the insulation is installed correctly. Throwing batts of insulation between studs that touch your concrete block wall is the worst thing you can do, and you’re likely to end up with a $12,000 mold remediation bill like I did.

There are two potential issues with insulating your basement as a DIY project: moisture and thermal bridges.

The most common insulation type — insulation batts — is made out of fiberglass, which is highly absorbent and loses its insulative property when it gets wet. If you own a property with a basement, chances are you know that water is an issue under your home.

Runoff can soak into the soil and make its way through cracks in your foundation. Hydrostatic pressure from saturated soil outside can force runoff through the pores in your concrete, even if there are no cracks or damages to the foundation.

Once the moisture enters your basement, it immediately gets to work saturating those precious insulation batts. Before you know it, your insulation will be soaked through. The batts will no longer insulate the space, and they’ll hold onto moisture that can promote mold growth.

Plus, even if you do avoid moisture, the studs placed against your concrete wall will act as a thermal bridge, allowing unconditioned outdoor temperatures to enter your under-home area, raising the temperature in the summer and lowering it in the winter.

Avid DIYers might not want to hear this, but basement insulation needs to be done by a reputable contractor. So…

How Do You Find a Reputable Contractor to Insulate Your Basement?

Glad you asked! There are a few red flags to watch out for as well as things to look for in a contractor who can insulate your basement.

A reputable contractor will ask if you’ve had or are currently experiencing moisture or water problems in your basement. If the contractor doesn’t ask, run — don’t walk — in the other direction.

Responsible contractors won’t install certain types of insulation in basements that have had issues with water intrusion. Instead, they’ll either help you solve the moisture problem first or direct you to someone who can. Neglecting to ask about moisture issues is a clear sign that the contractor doesn’t care about your home’s well-being and just wants to collect the paycheck.

Finally, you’ll want to be on the lookout for companies that offer options like fiberglass batts or rigid foam insulation installed against your concrete walls. These types of insulation up against your concrete block wall will inevitably hold any moisture that comes through, so you’ll be open to severe moisture build-up and mold growth.

Ditch the Old Windows

Homeowners often neglect basements. If yours is unfinished, it’s probably dirty, musty, damp, and maybe even has some insects crawling around. Not pleasant. Even if your basement is finished, there’s so little natural light and airflow down there that you may not spend nearly as much time in it as you’d like. The less you frequent your basement, the less likely you are to notice old, outdated windows.

That’s right: most basement windows are the last ones to get swapped out in a home renovation. While your big, beautiful bay window might be just a year old and help to insulate your living area, your basement windows are much more likely to be letting heat in in the summer and frigid air in in the winter.

Replacing your basement windows with new, energy-efficient models can go a long way in sealing the space from the outside. According to the Department of Energy (DOE), new windows in your basement could reduce your energy bills for your basement area by up to 30%! That’s a lot of money to save just by putting in new windows.

If you do decide to go with new windows, I strongly recommend hiring a contractor to do the installation for you. Replacing basement windows requires cutting out the old ones, which could potentially damage your foundation if you do it improperly.

I had a friend who swore by DIYing everything. He tried replacing his basement window himself and ended up having to seal an accidental cut in the concrete. It wasn’t terribly expensive — around $300 — but then he also had to pay someone to finish installing the windows! Avoid the property damage and embarrassment and hire a professional.

You can save some money by buying the windows in advance. I recommend EnergyStar windows, as the DOE approves them for good insulative properties.

Many homeowners choose Anderson windows, and their A-series casement options are among their best options for basements. Their Renewal by Anderson casement and awning windows will also do a great job of insulating your under-home area.

Some of the best basement windows on the market in terms of insulation belong to the Starmark Evo series from Okna. These windows have a super low U-value (the lower the number, the better they insulate), and they’re quite beautiful and durable.

Unsurprisingly, several basement window options from EnergyWall also have a very low U-factor and will help keep conditioned air inside your basement. Their 8450 casement window is one of their most popular options, but their 8460 awning window is another excellent choice.

You can also check out the DOE’s recent report on the most energy-efficient basement windows if you prefer a different brand or style.

Seal Gaps

Your foundation walls might appear impenetrable, but there are actually a few things that travel directly through them. If you take a look at your basement, you might notice plumbing pipes, HVAC ducts, and electrical conduits traveling directly through the concrete. If you have a sump pump in your basement, it breaches the concrete slab and dips into the ground below. Don’t forget about exterior doors and your new basement windows!

Any breach of the concrete means a potential gap through which unconditioned air can flow. Most utility experts will seal around their pipes or ducts, but some won’t, and any seal that is placed will deteriorate over time. An insulative sealant should be placed around any gaps that break your basement’s envelope.

Sealing these gaps yourself is possible, but I really recommend hiring a professional. You’ll pay just a few hundred dollars in most cases to get every opening sealed, and you can rest easy knowing that the job was done correctly. There’s not much damage you can do by applying it yourself, but you are far more likely to miss gaps or fail to get a good seal than a professional

A properly sealed basement won’t lose heat to the outside during the winter and will be more likely to stay cool in the summer. You’ll also stand to reduce moisture accumulation and issues with indoor humidity by reducing the amount of humid outdoor air that comes into your home.

Insulate Your Water Heater

Your next step should be insulating your water heater. Your water heater works tirelessly to heat up water for showers, washing dishes and clothes, and other appliances that require hot water.

Most homeowners have a traditional water heater that holds heated water in a large tank ready for use. It will cycle on and off to regulate the temperature and maintain hot water for whenever it’s needed.

Insulating a water heater in the basement

As you can probably imagine, the tank will lose tons of heat to the basement air. This constitutes a considerable energy draw year-round.

Let me explain…

Your water heater will naturally lose more heat to the cooler air downstairs in the winter, even if your basement is heated. It takes more energy to maintain hot water when it’s cold outside. In the summer, your cooling system will be battling your water heater. The AC will strive to make the air cooler, and your water heater will lose heat to the surrounding air. It’s a never-ending battle of energy loss!

So, what’s the solution? Insulation!

Water heater tanks can be insulated to help keep the heat where it belongs: in the water. A simple insulative wrap done as a DIY project can reduce your energy bill by 7-16%! Plus, your basement will be a more comfortable place to spend time no matter the season.

Get Better Lighting

I mentioned before that many homeowners neglect their basements in part because there is so little natural light down there. Some property owners choose to remedy that by using light fixtures. If you’re one of those people that turn on all the lights in your under-home area every time you’re down there, you could be putting a severe strain on your electric bill.

Replacing your light fixtures or even just replacing the bulbs could significantly reduce the energy draw every time you head downstairs.

You have five options for residential light fixtures and bulbs: incandescent, halogen, LED, compact fluorescent (CFL), and linear fluorescent. I’ve listed them here in order from least efficient (based on a measurement of lumens/Watt) to most efficient.

If you already have fixtures that accept standard light bulbs simply changing to CFL bulbs can save you on your basement energy bill. These bulbs are more costly than incandescents, but they’re about six times more efficient and can last nearly ten times as long. CFL bulbs are definitely worth your investment, especially because you don’t need to install new fixtures to use them.

If you do plan on installing new fixtures, the choice is yours which light bulb types you want to use. CFLs are most practical, but the highly efficient linear fluorescent lights last twice as long on average, and have the best energy rating in terms of lumens provided per Watt consumed.

Install a Smart Thermostat

You’re probably already familiar with smart thermostats, and you might even have one installed in your above-ground living space. These modern thermostats not only let you control multiple zones, but you can do so from anywhere by connecting to them via WiFi.

A smart thermostat, like a Nest or an ecobee, will help you maintain comfortable temperatures in your basement when you plan to be down there and energy-efficient temperatures when you don’t. For example, you can set the temperature on a timer if you only use your basement area at a particular time of day, or you can set it to a higher temperature in the summer or lower temperature in the winter when you’re at work or away on vacation.

I was doing some foundation work for a customer who told me he was paying around $250 a month for electricity before he installed a smart thermostat. Reportedly, he got that number down to an average of $215, which is pretty substantial savings for just swapping out the thermostat. The DOE estimates about 10% savings by switching to a smart thermostat.

Get Yourself a Dehumidifier

Installing a dehumidifier in your basement, whether it’s finished or unfinished, is one of the best ways to save on your energy bill. It may seem counterintuitive — pay less for energy by installing equipment that will draw more energy?

Let me explain!

Humid air naturally feels colder in the winter and hotter in the summer. Bumping up humidity by just a few percent can make the air in your home feel several degrees hotter or colder. Unfortunately, indoor humidity works against you and your energy bill because you’ll compensate in the summer by turning up the AC and demand more from your heating system in the winter.

While running a dehumidifier will most certainly draw energy, the equipment will pull less energy than you’d use by raising or lowering the temperature to compensate for the humidity.

Essentially, a dehumidifier will draw power but ultimately reduce your electric bill by limiting the strain on your HVAC system. It won’t run continuously and instead will cycle on and off to maintain a designated humidity. Not only that, but less moisture in your basement air also means a lower chance of mold growth!

I recommend you opt for an EnergyStar-rated dehumidifier to get the most bang for your buck. If you choose a standalone or portable unit, you can pretty easily install it yourself, although you will need to route the drain line to your laundry drain pipe or some other area for disposal. A whole-home dehumidifier will absolutely require a professional’s help to install.

Choose the Right Heat Source

Lastly, making sure you have the optimal heat source for your basement is crucial and could potentially save you hundreds of dollars on your heating bill each year.

Some basements have ductwork or baseboards extended from the living space upstairs into the under-home area to supply heat. Relying on your primary heating system for heat is usually the most energy-efficient way to keep your basement adequately heated in the winter.

If you don’t have HVAC ducts, radiators, or baseboards in your basement, you might be tempted to rely on electric heat. Electric baseboards and space heaters are sometimes popular options for homeowners looking to enjoy finished but unheated basements in the winter.

Baseboard radiator heating

I can tell you right away that this is almost always a bad choice! I’ve heard horror stories of high-powered space heaters getting knocked over and starting fires. In one case, the insurance company didn’t cover the tens of thousands of dollars in damage because using a space heater was apparently an irresponsible action that unnecessarily put the home at risk. Not something you want to hear after a house fire!

I once worked on a home that didn’t have a primary heating system…really. The entire upstairs relied on ductless units, and the basement had electric baseboards installed around the perimeter. I couldn’t help but ask what the electric bill was in the winter — I was surprised to hear that it was “only” $600 a month. Sure, the homeowner wasn’t paying for oil or natural gas, but $600 a month is insane to heat a 1,000 square foot home!

The bottom line is, your main heating system is the best equipped to heat your basement efficiently.

If you don’t have ductwork or baseboards installed downstairs, you should consider having a professional out to connect your basement to your HVAC system. Your upfront cost will be thousands, but saving $600 per month in electric costs will soon make it worth the investment!

If you’re not keen on spending that much or putting additional draw on your HVAC system, you can consider alternative heating methods, like wood-burning stoves or pellet stoves. These will cost around $1,000-3,000 to install upfront, and you’ll have minimal ongoing costs for wood or pellets.

I vividly remember visiting my wife’s parents’ house during the winter back when we were dating. It was below freezing outside, and they had their pellet stove cranking out heat in the basement. The heat quickly made its way upstairs into the living space, and all I remember is sitting on the couch sweating my butt off, all because of a pellet stove running on another floor!

It was a little embarrassing having to wipe beads of sweat off my face while we ate dinner, but at least now I know alternative heating methods are…effective.

At the end of the day, you need to optimize the method of heating for your basement. Relying on space heaters or electric baseboards might seem cheaper upfront, but you’ll pay far more in energy bills in the long run and potentially put your home at risk of a fire.

How Much Money Can You Save By Making Your Basement Energy-Efficient?

If you’re committed to making your basement more energy-efficient using the methods I’ve described above, you’re probably wondering just how much you’ll save in the process. Your exact savings will depend on a few factors.

Firstly, the size of your basement matters greatly. The bigger your basement, the more conditioned air it loses to the exterior, and the more you’ll save by making it more energy-efficient.

Secondly, if your basement is at a bare minimum as far as energy efficiency goes right now, taking even one of the above steps will very likely improve efficiency drastically. On the other hand, if your basement is already insulated and has relatively new windows, then updating the lights from incandescent to CFL bulbs won’t do nearly as much to reduce your energy bill. With that being said, you can still maximize efficiency and make a dent in your electric costs.

Finally, your climate will significantly affect how much these changes to your basement will reduce your energy bills. Colder climates naturally require a heavier load on your heating system, while hotter climates will necessitate more demand on your AC system. More extreme temperatures require more energy to maintain a comfortable living space.

You can find rough estimates of the percent of your energy that goes into heating and cooling by taking a look at a climate-based energy-saving map of the United States.

A Real-Life Example of Savings

For the purposes of this article, I reviewed energy bills with a customer I worked with over a year ago on making her basement as efficient as possible. She lived in a 2000-square foot house with an unfinished basement that was built in the late 1950s, so it was about as energy-efficient as pumping hot air from your HVAC system directly into your backyard to keep it warm in the winter…we had a lot of work to do.

We started by fixing her moisture issues. This took the bulk of the time because it involved sealing foundation cracks, installing a French drain, putting in a gutter system, and grading the soil. We also installed a dehumidifier as part of our moisture mitigation plan, but this was done after the basement was finished.

She then installed a vapor barrier, framework for the studs, and spray foam insulation. All of this was done by a professional who took the time to seal around ductwork and utility lines. The same contractor installed new Anderson casement windows.

Once all of that work was done, I helped her install a whole-home dehumidifier in the basement, and we wrapped the water heater with insulation. Basically, we took all of the steps listed above, although she opted for CFLs instead of the more efficient linear fluorescent light fixtures.

Before all of this work, she was using around 750 kWh of electricity each month and about 70 therms per month to heat her home. At approximately 19 cents per kWh and 94 cents per therm, her total utility bills for electric and gas totaled just under $210 per month on average. Keep in mind that these numbers reflect electricity and heat consumed by the whole house and not just the basement.

After the tens of thousands of dollars she put into making her basement more energy-efficient, she averaged 215 kWh and 28 therms per month for an entire year. After making her basement as energy-efficient as possible, her updated annual total for electric and gas is just over $67. That’s down from $210 per month – about a 31% decrease!!

Your savings will likely vary, but from this one example, you can see that it’s possible to save money each month, make your home more comfortable, and decrease your carbon footprint by making your basement more energy-efficient.

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Sam Smith Foundation Repair Consultant
SHORT BIO: Hey, I'm Sam Smith. I'm one of our service techs here at Regional Foundation Repair. I'm here to help you learn more about your home's foundation. I've been doing this for a while, so I have a few insider tips and tricks to share!

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