heugumper:
How much cost is involved on recessing the windows, getting them closer to the centre or the wall insulation? Seems to be the norm in some countries and certainly in passive houses, so maybe it is cost effective for the thermal improvement?
It comes down to detailing, and the type of cladding being used. It isn't so easy with timber weatherboard, and getting the detailing right. There are some recessed window system though for certain cladding types. I did some on a metal clad house. But windows lose a lot of heat anyway, so not sure if there is a huge difference in heat loss by not recessing them, but would be interested to see the figures.. It is possibly more cost effective to upspec the R values in the insulation. What R values are you using for walls and ceiling. We put R 5.0 in our ceiling.