As the thickness of the insulation increases, the cost of material and installation also goes up. The cost of lost energy, on the other hand, goes up. The cost of lost energy, on the other hand, goes down up to a certain thickness. Above this thickness, the gains due to drop in the surface temperature are compensated with increase in the surface area of the insulation. In other words, the energy saving also goes up, but at a slower rate of increase than the cost of the materials and installation.

At a particular point, the total cost, which is the sum of the lost energy and the material cost, reaches a minimum point; which is the economic thickness of insulation. Figure 1 illustrates the method of determining the economic thickness.

The recommended insulation thickness for mineral wool which is commonly used in various industries is given in table 4.4.