What is Insulating Sheathing?
Insulating sheathing is an insulating method using sheet/board products (common sizes 2×8, 4×8, 4×9) that are attached on the exterior framing before installing siding or other exterior covering. Extruded polystyrene (XPS) sheathing is designed to add insulating value to wall systems and are used in conjunction with code compliant wall bracing. (See Chapter 6 of the 2024 International Residential Code)
When can I use XPS insulating sheathing?
XPS sheathing can be used to cover the entire exterior wall area, when used in conjunction with code compliant bracing.
What are the benefits of using XPS insulating sheathing?
Although non-insulating wood sheathing, such as plywood and oriented strand board (OSB), is an option that provides structural integrity in wall systems, it offers little thermal resistance (with an R-value of only R-0.6). XPS insulating sheathing, which has an R-value of R-2 to R-7.5 (depending on thickness), offers the following added benefits:
- Energy savings
- Improved comfort
- Ease of installation
- Reduced potential for condensation within walls
- Lower cost than non-insulating wood sheathing

Using XPS insulating sheathing in wall systems increases the value of any home by reducing operating costs (lower energy bills). Insulating sheathing like XPS not only add significant R-value to wall systems, they also reduce air leakage. When air leaks into a home through the exterior walls, it compromises the efficiency of the insulation in the wall cavity. You can increase the comfort of your home, while reducing heating and cooling costs by up to 30% with just a few hundred dollars investment in proper insulation and weatherization products.
What types of residential wall systems can incorporate XPS insulating sheathings?
In residential construction, there are a variety of wall systems that incorporate XPS insulating sheathing. The following are examples of wall systems that are commonly used in new homes:
- Conventional Framed Construction with wood/vinyl/aluminum siding
XPS insulating sheathing is attached to exterior framing members prior to installing the siding. XPS, which is typically used in conjunction with building code compliant wall bracing, covers the entire wall surface, including the attic gable end walls. Building codes require that foam insulation on attic walls be covered unless specifically recognized for exposed applications. Consult the XPS manufacturer’s building code evaluation report for guidance. - Exterior Insulation Finish System (EIFS, Synthetic Stucco)
XPS insulating sheathing is attached to exterior framing prior to installing the exterior finish. XPS, which is typically used in conjunction with building code compliant wall bracing, covers the entire wall surface, including the attic gable end walls. A stucco lath (wire or fiberglass mesh) is installed over the foam and is secured to the underlying framing. A base coat is applied over the lath and is followed by a finish coat. It is important to consult the EIFS manufacturer’s installation instructions, since installation details vary. For further information, EIFS Industry Members Association (EIMA). - Conventional One-Coat Stucco System
XPS insulating sheathing is attached to exterior framing prior to installing the exterior finish. XPS, which is typically used in conjunction with building code compliant wall bracing, covers the entire wall surface, including the attic gable end walls. The surface of the insulating sheathing is prepared to accept the stucco covering by using a wire brush to roughen the surface rough. A metal lath is installed over the foam and is secured to the underlying framing. The cementitious exterior covering (stucco) is applied directly over the lath. It is important to consult the stucco manufacturer’s installation instructions, since installation details vary. - Exterior Brick Veneer
XPS insulating sheathing is attached to exterior framing prior to installing the brick. XPS, which is typically used in conjunction with building code compliant wall bracing, covers the entire wall surface, including the attic gable end walls. Brick ties are installed through the foam sheathing into the underlying framing. The brick is then installed with a nominal one-inch air space between the back side of the brick and the surface of the foam. For further information, contact the Brick Industry Association. - Insulating Concrete Form System (ICF)
Insulating concrete forms are hollow blocks, panels or planks made of XPS that are erected and filled with concrete to form the structure and insulation of exterior walls. These types of permanent modular formwork units have been used successfully in Europe for over 25 years and have been used in the United States and Canada for approximately 20 years. Homes built using insulating concrete form systems look like any other home. Stucco, wood siding, and other traditional exterior finishes can easily be used with these systems. Interiors are usually dry-walled. In addition, the forms readily accommodate plumbing and wiring.
The reinforced concrete wall system may be used as load bearing exterior walls, foundation walls, retaining walls, and lintels. All ICFs work on the same principle (filling foam forms with concrete), but differ in size of the form units (blocks, panels or planks) and unit connections, the shape of the cavities into which the concrete is poured, and whether the surfaces can accept the attachment of nails or screws.
For more information on insulating concrete form systems, visit the Portland Cement Association. - Steel Framing
Steel frame construction has historically been used primarily in commercial construction applications. However, due to the increasing cost of lumber it is now becoming more common in residential construction. Cold-formed steel is light-weight, easy to handle, cost effective and can be high quality alternative to traditional wood framing materials.
There are many advantages to steel framing in residential walls. However, steel will conduct heat and can influence the effectiveness of a wall system by allowing non-uniform heat transfer. For this reason, the American Iron and Steel Institute (AISI, www.steel.org) published the “Thermal Design Guide for Exterior Walls” (Publication RG-9405), which is intended to provide designers and contractors with guidance on thermal design of buildings that utilize cold-formed steel framing members.
The American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE) published a standard, ASHRAE 90.1, that applies an R-value correction factor for walls with steel framing members. The correction considers the heat loss through the steel framing and is based on the R-value of the insulation used in the studs. The International Code Council (ICC) has adopted the ASHRAE recommended values for wall sections with steel stud correction factors and provides alternatives for equivalent steel-framed wall cavity and rigid foam sheathing R-values.
Extruded polystyrene insulation board (XPS) not only meets the IECC recommendations for exterior insulating sheathing, it also offers the following important benefits to steel-framed wall systems:
- Proven thermal performance (R-value) prevents thermal loss through steel framing members.
- Superior moisture resistance ensures long-term insulating value in wet environments, such as behind exterior brick veneer.
- Decreased condensation potential (due to higher R-value) protects the wall system integrity.
- Outstanding dimensional stability and strength provides excellent durability.
- Lightweight product allows easy handling and installation.
- Helps reduce sound transmission through the wall assembly, contributing to a quieter indoor environment.
- Structural Insulated Panel Systems (SIPS)
A structural insulated panel (SIP) is a composite panel consisting of a thick rigid foam core, such as extruded polystyrene insulation board (XPS) sandwiched between layers of oriented strand board (OSB) to create a high R-value structural panel. These composite panels combine the high R-value of XPS with the strength of structural wood sheathing to create a panel system that offers more R-value than conventional 2×4 or 2×6 wood framed walls that have fiberglass cavity insulation. SIPs are commonly used to construct the floors, walls, and roofs of houses and buildings.
When a home is built with SIPs, the panels are pre-fabricated to specifications in a factory, where door and window openings can be pre-cut. SIPs can also be made in various thicknesses and sizes to accommodate custom specifications. Once the panels are fabricated, they are then shipped to the job site where they are quickly joined together using inset splines. The pre-cutting allows for fast, easy connections at the job site and, since the panels are prefabricated and are installed quickly, the potential for exposure to moisture during construction is greatly reduced.
SIPs are an energy efficient, cost competitive alternative to conventional stick-built construction and offer several advantages. For example, SIPs do not contain studs, so no heat is lost at uninsulated stud locations. Did you know that approximately 25% of the wall area for a typical wood-framed construction consists of framing members, which conduct heat, resulting in significant heat loss unless covered with an insulating sheathing like XPS?
SIPs were first introduced in the 1950’s and have grown in popularity as a result of the benefits and competitive cost versus traditional stick-built homes. Click here for more information on SIPs. - Manufactured Homes
A manufactured home is a single-family house constructed entirely in a controlled factory environment. These homes are built to the federal Manufactured Home Construction and Safety Standard (24 CFR Part 3280) also known as the “HUD Code”, which is administered by the U.S. Department of Housing and Urban Development (HUD). Manufactured homes may be either single or multi-section units that are transported to the site and installed on a permanent foundation or chassis with wheels. On-site additions, such as garages, decks, and porches, are often added once the house has been installed.
Manufactured homes are constructed similarly to traditional stick-built homes that have insulating sheathing, such as extruded polystyrene insulation board (XPS), on exterior walls to enhance the overall thermal performance of the wall system.
For more information on the value of manufactured homes, visit the Manufactured Housing Institute. - Modular Home
A modular home is a single-family house constructed entirely in a controlled factory environment. These homes are built to the local building code where the home will be located. Modular homes may be either single or multi-section units that are transported to the site on a permanent chassis with wheels and installed. On-site additions, such as garages, decks and porches are often added once the house has been installed.
Modular homes are constructed similar to traditional stick-built homes that have insulating sheathing, such as extruded polystyrene insulation board (XPS), on exterior walls to enhance the overall thermal performance of the wall system. Building materials used for construction of modular homes tend to be purchased in volume. Therefore, a home-buyer may be able to more easily purchase an affordable home.
For more information on modular homes, visit the Modular Home Builders Association. - Re-siding/Remodeling Applications
The best time to improve your existing home’s energy efficiency is when replacing worn siding. In older homes that have little or no insulation or in homes that have drafts, one of the best ways to save energy is to add XPS insulating sheathing or fanfold siding underlayments beneath the new siding. Not only will this reduce your energy bills, it will also improve your comfort level.
When removing old siding, you will have easy access to the original sheathing layer and it is often possible to install a layer of insulating sheathing on top of the original wall sheathing before installing the new siding. If you do not want to remove the existing siding, you could install XPS fanfold siding underlayment or XPS insulating sheathing directly over the top of the old siding prior to installing the new siding. You may need to modify the jambs, sills, flashings, etc. depending upon the thickness of the foam insulation installed.
Your energy savings will depend on several factors. Every house is different, and your savings will depend on the condition of your house and the retrofit option that you choose. The Department of Energy published the development of the “Retrofit Best Practices Guide”, which is now available on the Oak Ridge National Laboratory website. This guide describes estimated energy savings for three different retrofitted houses in ten different cities. The energy savings were estimated using a combination of experimental measurements and home energy modeling.