"breathing" in contractor jargon means the wall is permeable to water vapor which in a cold climate will naturally try to move from the warmer inside of the house to the drier colder outside of the house.

To be able to discuss this issue the entire wall design must be considered.

Actually, you're kind of on the right track....

If that "audit guy" is one who does the Energy Star ratings on homes, he ~should~ be qualified to advise you on what to put where. Bring him in as a consultant BEFORE you decide on what to do. The report they do after the fact shows the heat loss/gain and estimates savings. He'll be able to tell you what material will score best and where it should be applied. It's certainly possible that your total job could involve multiple types of insulation to give you the most performance for the dollar.

I hope you can find the time and the auditor to help!

Breathing in contractor jargon is a euphanism for leaking.

You don't want the moist air in your house to hit the colder air outside by passing through the wall insulation PERIOD. Closed cell foam is an effective vapor barrier. Plastic is another. Certain wall board techniques (rarely done in the US) can be another. Don't buy the bull*....

The only breathing your house needs to do if any is through the ventilation system.

Got my Energy star last week.
Love my foam.

Some good points made so far. I have Tyvek, so is the moisture migration to the outside cold in the winter an issue? I'll have the same situation if I stay with batting, right?

In some climates there is a concern that moisture could be trapped between an interior vapor retarder and exterior closed cell foam insulation. This is what people are talking about when they say a building needs to breathe; ironically it has nothing to do with air movement.

To solve these kinds of problems it is necessary to consider all aspects of the wall design and the climate not just the kind of insulation. A lot of misinformation and spinning of wheels occurs when the actual wall system is not clarified. Therefore, I try to stay out of it; I have enough trouble explaining it to my clients. If you study the subject thoroughly you would most likely avoid the thorniest issues by putting rigid foam insulation board on the outside of the sheathing in a cold climate and fill the stud cavity with less expensive fiberglass or cellulose.

re: mightyanvil

The first contractor who recommends closed cell tells me that there will be no moisture accumulation because the foam separates the cold outside air from the warmer inside air, and so there is no condensation. Does this make sense? I'm putting Hardiplank on the exterior over Tyvek, and I'm not sure how exterior rigid foam insulation board you mention would work with that. Thanks for any comment.

Tyvek will not have any effect on interior moisture migration.
You don't want the moisture condensing to start with, hocus pocus that says it will some how magically continue to breathe out the Tyvek is spurious.

Closed cell stops the vapor migration because it is not permeable to the moisture. It's got nothing directly to do with the thermal properties.

The best bet is to KEEP VAPOR OUT OF THE WALLS. A continuous barrier which is a property installed and sealed plastic, or closed cell foam, or whatever (the kraft paper on your fiberglass batts by and large sucks).

I've included a link to the Energystar government site...
At first glance it looks like the max credit for insulation is $1500.

Find a local inspector and ask him how much he'd charge to come out before hand. You're going to have to pay him anyhow for the audit to get the credit, you might as well have him part of the process from the onset.

My guess is that the audit is $350 to $400. Add (guessing) $150 for an early consult and you're into it for about $500.

$500 to get $1500... doesn't sound bad to me!

That's not even taking into account the potential for savings in the insulation method, nor the long-term savings in energy costs.

Here is a link that might be useful: Energystar website

Thanks bungeeii. I actually made contact with a spray company that had a certified Energystar auditor working with them. They did an energy audit today and took measurements to estimate the job. They estimated the following rebates, and will put these terms in the contract as stipulations before any work is done:
1. audit costs $400 with $125 rebated if the work is done.
2. $1000 govt rebate off the top for a thin barrier spray in the attic floor. I don't have the exact terminology in front of me, but it is basically a skim coat of foam onto which is blown cellulose or other for attic insulation.
3. up to 50% rebate ($5000 max) depending on the results of the energy audit. Because I have high efficiency furnaces and on-demand hot water, she says that I will rate at a 25%+ energy savings, which will put me at the 50% rebate from the govt. The rebate takes about 10 weeks.

So, in their example, if the job costs $11,000, I pay $10,000 plus the $400 for the audit ($1000 "instant" rebate for the attic thing), then get $5000 + $125 back in 10 weeks. After my contractor subtracts out what he was charging me for fiberglass, I should net out at a very reasonable number.

The people today were my third estimate, and I believe they were the most knowledgeable about the right thing to do. I'm just waiting till next week for their estimate.

Thanks again, I think I'm finally getting the right game plan together!

The only thing that I really have to add is that the foam is far superior to fiberglass. Both in terms of comfort, efficincy and (I believe) resale value. If you can swing the $ for it, you wont be sorry.

danielj_2009 - Did you ever receive your 3rd estimate, and what did you finally decide on for your insulation?

To my knowledge, there is no $5000 rebate from the federal government. Just a clarification here - we must be talking about a state program. I am building an energy star house and we get exactly zero government incentives to do so. All the federal stuff is for remodels and replacements, not new construction (except for solar, geothermal but certainly not conventional HVAC or insulation).

I've been looking into the same thing recently, and it seems that closed-cell is the way to go.
I read of one installation where they sprayed 1" of closed cell foam, then filled the walls with blown-in cellulose. Apparently 1" is all that's needed to really seal against air & moisture.
I've also read that using a closed foam on the outside is another strategy. If you're not already sheathed & sided.

Daniel,
I live in northern NJ and I read your post about spray foam confusion. What did you guys decide to go with. We are in the same situation and we are trying to decide which direction to take. Also, can you tell me some of the insulation contractors you used and liked. Thanks so much!

We live in SW Louisiana and faced the same dilemma last year when we built. We were so overwhelmed with advice from foam contracters, our builder and online research.
Our house is just under 3000 sqft. We ended up going with 2" closed cell foam in the exterior walls and open cell for the roof deck (unvented attic)
The r- value is the same in the walls as if we had 4" of cellular or fiberfill, and would have cost us $4000 instead of $13,500. (we do have more rigidity to the exterior walls which is desirable in hurricane country).
I think for price and r-value, rock wool or the above types seem to be a better value.
Perhaps someone here has that type of insulation, and can give you more input.