The excerpt below is from a series of articles on home remodeling ideas …
When remodeling a basement, it helps to understand the benefits of basement walls insulation and how it can save energy, resulting in lower energy costs. It helps to understand that heat is transferred from warm areas to cooler ones in one of three ways. The most common way is through direct contact, meaning that a warm area in physical contact with a cooler one will transfer heat fairly quickly and efficiently.
Convection is the method used to move heat by force such as a fan or other method of moving warm air to a cooler area. Radiation simply means that a warm object sends heat towards a cooler object, such as a hot water or steam radiator. Without insulating basement walls, the heat within the basement will travel towards the walls which are usually in direct contact with cooler ground on the other side of the wall. This transfer of heat is what keeps your basement cooler in the summer and a little cooler still in the winter as the ground gets colder.
Through basement walls insulation, the heat that is in the basement stays in the basement and during cold weather when a heater is turned on in the basement, it will not be trying to heat the ground around the house. There are various types of insulation that can be used in basements, mostly between wall coverings and the outer wall of the basement, and it should be installed without touching the interior walls to reduce the chance of transferring any moisture that may build up on the outer wall.
In addition to insulating basement walls, the insulation should be backed with a vapor barrier to prevent moisture from the outer wall from damaging the insulating material and subsequently the interior walls. Typically, plastic sheeting about 6mm thick will work well on basement walls, and is installed between the outer wall and the insulation. Some communities also set a standard for insulation so it may be a good move to check with local building codes as well …
Read the full article here: Basement Walls Insulation Tips

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