ConclusionThis study deals with the effect of insulation location on the heattransfer characteristics of building walls and optimization of insu-lation thickness. The investigation is carried out for a south-facingwall in the climatic conditions of Elazı˘g, Turkey. For this purpose,insulation is placed at outside, inside and middle of wall. Firstly,thermal characteristics such as yearly cooling and heating trans-mission loads, yearly averaged time lag and decrement factor aredetermined using an implicit finite difference method under steadyperiodic conditions for three different insulation positions. Resultsshow that yearly transmission loads are unaffected by insulationlocation, whereas insulation location has a significant effect on theyearly averaged time lag and decrement factor.Secondly, insulation thickness is optimized by using a costanalysis over lifetime of 20 years of the building. The optimum insu-lation thickness is found to be 8.2 cm for three different insulationpositions. It is seen that optimum insulation thickness is unaffected