Question: Should my insulation go to the bottom plate or stop a couple of inches above it?
Answer: When planning to insulate and heat a space, it is important to consider air leakage: Air that can circulate inside a wall will make your building inefficient by leaking heat and moisture through the wall. In the case of your garage, the vapor retarder (6 mil polyethylene sheet) must be continuous in order to act as your air retarder as well. That said, it should also have continuity inside the ceiling/attic area to make an efficient building. If you can apply the vapor retarder over the entire wall without interruptions (not including doors and windows) from the bottom of the wall to the top and the attic, you have an air barrier that will not leak (that implies caulking, overlapping edges and other detailed work). I also suggest adding insulation in the attic (R-40 minimum) on top of the vapor retarder.


