Insulation payback is one division: what you pay after rebates, divided by what you save each year. In Los Angeles, LADWP's attic rebate pays $0.50 per square foot plus a $0.25 bonus, and LADWP says attic insulation can save up to $374 a year.
So you need 3 numbers: a written quote, the rebates you qualify for and a savings estimate. Here's how to get each, from official pages checked on October 8, 2026.
How Do You Calculate Insulation ROI?
Payback in years equals your net cost divided by your yearly savings. In 2026, net cost is the contractor's quote minus utility rebates such as LADWP's $0.75 per square foot above R-19, and yearly savings come from your bills or your utility's estimate, up to $374 for LADWP.
| Step | What to use |
|---|---|
| 1. Installed cost | A written contractor quote for your attic (square feet and R-value) |
| 2. Rebates | Your utility's rate times your attic area, for example LADWP's $0.50 + $0.25 per sq ft |
| 3. Net cost | Step 1 minus step 2 |
| 4. Yearly savings | Your utility's estimate, for example LADWP's "up to $374 per year" |
| 5. Payback | Step 3 divided by step 4 |
We don't publish a typical installed cost, because we found no official source for one. Use your own quote.
How Much Does the LADWP Rebate Take Off?
LADWP pays $0.50 per square foot for attic insulation above R-19, or $0.30 per square foot for R-19 or below when the attic has less than 24 inches of clearance. Every participant also gets an extra $0.25 per square foot, and the rebate can't exceed what you paid.
| Attic size | Above R-19 ($0.75 per sq ft total) | R-19 or below ($0.55 per sq ft total) |
|---|---|---|
| 800 sq ft | $600 | $440 |
| 1,000 sq ft | $750 | $550 |
| 1,500 sq ft | $1,125 | $825 |
The program covers projects bought and installed on or after September 1, 2025, one per residence every 15 years. The insulation rebates savings guide covers eligibility and documents.
How Much Can Insulation Save Each Year?
LADWP says customers can reduce their electricity use and save up to $374 per year with attic insulation, depending on the size of the home and its location. Qualifying LADWP homes must have central, window or wall-mounted air conditioning.
"Up to" is a ceiling, so a smaller or milder home saves less. For a better estimate, compare a year of your own bills before and after. ENERGY STAR's recommended attic levels by climate zone are in the insulation R-value chart.
Did the Federal Insulation Tax Credit End?
Yes, for 2026 projects. The federal 25C credit, which covered insulation and air sealing up to the $1,200 annual limit, ended for property placed in service after December 31, 2025, according to IRS Fact Sheet FS-2025-05.
So a 2026 ROI calculation uses utility rebates only. Insulation installed in 2025 can still go on the 2025 return; the guide to the federal home energy credits that ended covers that.
Official Sources
The rebate rates and the savings figure come from LADWP's own Attic Insulation Rebate Program page, checked on October 8, 2026.
- LADWP Attic Insulation Rebate Program, rebate rates, savings estimate and rules
- ENERGY STAR: Recommended Home Insulation R-Values, recommended attic levels
- IRS: Energy Efficient Home Improvement Credit, the 2025 limits of a credit that ended after December 31, 2025
Frequently Asked Questions
What is a good payback period for insulation?
That depends on your own numbers: net cost after rebates divided by yearly savings. LADWP's figures show the inputs for its customers, a rebate of $0.75 per square foot above R-19 and savings of up to $374 a year, but the installed cost in your quote decides the result.
Is there a tax credit for insulation in 2026?
No. The federal 25C credit ended for property placed in service after December 31, 2025 (IRS FS-2025-05). In 2025 it covered insulation and air sealing up to a $1,200 annual limit. For 2026 projects, utility rebates such as LADWP's attic rebate are what lower the cost.
Does adding more insulation always pay off?
ENERGY STAR describes its R-value table as the insulation levels that are cost-effective for each climate zone and location in the home, so those levels are the sensible target. LADWP also pays a higher rate ($0.50 versus $0.30 per square foot) for insulation above R-19.
Working out your insulation payback? See the verified rebates for your address with the free rebate calculator.