Insulating any industrial system involves a capital expense. Thus a critical factor in making the decision to invest is to analyze the cost of the proposed solution. But the effectiveness of insulation follows the law of decreasing returns, so there is a limit to the amount of insulation that can be justified as cost effective.
Beyond the point of optimization, an increase in the thickness of the insulation becomes un-economical, as it cannot be recovered through small heat savings. This limiting value is referred to as the ideal “economic thickness” of the specified insulation.