I use normal styrofoam that I find in trash cans, etc. The stuff use for packing or for beer coolers, it all works. And yes, it prevents so much heat loss that you can actually downgrade your heater. I just used black duct tape and wrapped the back and sides. Simple, ugly and effective. This is in the basement fish room, so ugly is perfectly acceptable. You might want to paint yours first, then tape it on.