I recently overheard a couple at a hardware store exchange words as they peered down over a massive pile of insulation marked with various R-factors. "Just what IS an R-factor?, queried the woman. "Well, it has to do with how well the insulation does its job---so I guess an R-factor is kind of like the home's "utility I.Q."

It's an interesting analogy since insulation does make your home smarter where utility bills are concerned. But unfortunately, many people don't properly upgrade the insulation in their home when and where they should. And, in warmer climates, home owners often sidestep the importance of proper insulation all together. How can you gauge if your home is properly insulated and how can it potentially cut hundreds of dollars annually off your utility bills?

The R-factor, simply put, is the measurement of how well insulation resists (thus, the "R") heat flow. The higher the R-value, the better the insulating power. Heat (which is a form of energy) tends to gravitate towards cooler areas in the home (ie. the attic, the walls, the crawl spaces.) That's why it makes the most sense to have these areas with ample, high efficiency insulation.

But insulation isn't just for controlling heat. Resistance works in reverse where cool air is concerned, keeping the warm air from flowing into spaces you're trying to keep cool. That's why home owners in warm climates need to know their home's R-factors in order to keep a lid on their air conditioning bills.

What R-values are considered standard and how do they vary from climate to climate? Manufacturers clearly mark the R-value on the types of insulation they produce. Home owners can often use various types of insulation together to obtain a high R-value. (An example of this is hard-to-access exterior walls where insulation is blown in on top of existing insulation.) Standard R-values differ based on what part of the home you're trying to insulate. For example, since the attic is the biggest area for energy loss, colder climates require values ranging from R-38 to R-49. But in the South, R-19 in the attic should be ample.

Most local building codes require an R-value of R-19 for exterior walls. But if a home is built using 2 x 6 studs, there's enough space in the wall cavity to insulate up to a value of R-21.

A frequent cold air leak can be where the house meets the foundation. In fact, you can lose up to 20% of your home's heating/cooling energy from the foundation area in an non-insulated or poorly insulated home. That's why it's important to insulate around the area where the house meets the foundation, not just in the basement walls.

Just because insulation is thick doesn't mean it has a high R-value. Many manufacturers are now producing higher R-value in fiber glass products by merely increasing the density while keeping the thickness the same. Today you might see R-15 insulation in a wall where R-13 was previously the max due to physical constraints. The efficiency has changed while the physical size of the insulation remains the same.

The bottom line is that if your utility bills are calling "Uncle", it's high time you review the R-values in your home. Like the man at the hardware store said, they're your home's "utility I.Q."