Your builder is badly informed if he believes that slab insulation is of no benefit in northern MN. Furthermore, if you are planning to heat the slab, you need a bare minimum of 2" of foam under the slab, preferably 4". The sub-slab soil may be a lot warmer than outside air temperature in winter, but the area is huge.

Similarly, the three buried walls have a large surface area, and the soil temperature in winter are progressively colder as you move up the wall. Those walls need to be insulated well also. Details on the right way to insulate basement slab and walls are found in many places, such on www.buildingscience.com.

Getting a comfortable living space out of that basement will be difficult without slab and wall insulation. It's your new house, and it should be up to you, not the builder, to specify what will be done.

Dr. Lstiburek of Building Science Corp. has promulgated the 10-20-40-60 rule for homes built north of the Mason-Dixon line. That refers to the minimum recommended R value for, respectively, under slab, basement walls, above grade walls and the roof.

Nevertheless, I have never used sub-slab insulation except for a heated basement floor. For my own homes, there would be no payback over the average four to six years we live in them before moving. And the payback is getting longer and longer due to the sharp drop in natural gas prices and improved heating equipment efficiencies. I'm not using sub-slab insulation in the new home we're building this coming spring either.

When I've installed radiant heating in a basement floor it has clearly been a luxury option. Our carpeted basement floors in a relatively cold climate have never felt cold. However, marble and tile bathroom floors in the basement are another matter!

Here is a link that might be useful: Green Building Advisor: How Much Insulation is Needed?

We will have insulation on all the basement walls. I am only talking about the floor.

Yes, insulate the basement floor if you expect to use the basement space and want it comfortable. A wise architect told us over 35 years ago and we've never forgotten it: put your money in the ground...meaning it is way to expensive to impossible to fix what's underground later. So insulate, make sure you have curtain draining, waterproof the walls, etc etc.

yes, by all means, put it in the floor, especially since you have a walk out. Also make sure you insulate down the stem wall of the walk out foundation too. Subslab insulation leads to a warmer, dryer floor. I typically call for 2" XPS Formular 250 for under slabs. Tape and seal the foam as well. My go to floor structure is 4-6" of clean compacted rock, 2" xps F250 taped with joists foamed/caulked, 6 mil vapor barrier with the edges taped off, then a 3.5 or 4" slab.

So it isn't a walkout, it is a lookout? Does that just mean there are windows there?

Ask your builder what the ground temps are. I suspect they are close to 55 if it isn't a walkout. I really doubt comfort will be an issue. Sure there is an efficiency benefit but it probably doesn't payback.

When you start going for the 10-20-40-60, you really are going for everything. So I would do 10 under slab, if you are actually at 40 for the wall....

It is a lookout on some of the back wall. Most of the basement will be 8' below grade. The side that has the windows will be about 4' below grade.

So 3 sides are fully 8 feet below surface and 1 side is 4 feet below surface - I think you mentioned that already.

Underslab insulation has to be looked at with local climates and depth. Best practice is r-10 but in your situation, you could get by with none/less.

A walkout is a very different situation which is why blanket statements about underslab insulation aren't a good idea.

What is the rest of the house? Is it r-40 walls or code minimum or somewhere in between? What is your heating source? What is your energy use goal/payback?

We will have R11 on the below grade and r21 above. We plan to heat the house with a multi-zone forced air system. I have not set any energy use goals. We would like the house to be comfortable. What is the payback for adding better/more insulation? Our builder quoted us $10k+ for spray foam insulation and we did not feel the ROI was there.

the ROI is rarely there on spray foams in walls, if ever. Marketing BS has people thinking spray foam is the next step up from batts to ultimate energy savings. The truth is, unless you are going with closed cell (most do not) your wall r value increases 1 or 2 points, however you do get a boost in air sealing within the stud bays. However you still have a thermal bridge in either system, and spray foams can not address that, as well as air leaks at your top and bottom plates of your walls.
I would be curious to see how you are getting r21 in your exterior walls. if they are using fiberglass batts, you arent hitting r21. For zone 6, it would be money in your pocket to increase that value (especially after thermal bridge and batt insulation short falls your whole wall r value is closer to r16) by adding exterior foam sheathing. The extra upfront cost of adding a couple inches of foam on the exterior will be cheaper then the spray foam upgrade, as well as decreases the thermal bridge shortfalls (reduced "cold drafting" on your walls) and provide a better air seal assuming seams are caulked/foamed/taped. Get your HVAC guys to do a load simulation and adding foam sheathing should reduce your tonnage for the equipment, thus reducing the upfront cost of it and offsetting some of the cost of the sheathing. After that, depending on your energy usage, rates, size of home, etc your payback on your sheathing will typically be less then 5 years.
I would also recommend switching from batts (again, assume you are using them) and going with a blown product such as fiberglass or cellulose. It will do a better job of fully insulating the wall cavity.
Finally not everything needs to be looked at as ROI. Some things will provide added comfort but not always come with a payback. Full foam below slab could be one of those items. I have had clients that do it and are happy they have, and I have clients that save the couple k and dont, and wish they have. One even took up their entire wood floor (floating) and added foam on the slab after the fact since it was so cold. These are people in your same climate zone 6.
People never like to spend money on things they dont see, and insulation is typically the first area people do not always care about. Most builders do not understand air infiltration, thermal bridging, and how to do energy simulations and payback so most do not understand the advantages to increasing the shell insulation and tightness of the home. Most stick by code minimums (like in your case).
Energy rates may be low at the moment. But do keep in mind...energy rates will always keep going up.

"Plan to heat the house with a multi-zone forced air" - that doesn't really tell us what you are using to heat. Is it NG/Propane/geothermal etc.

If you are using propane, you have to upgrade the shell. The rest, you should upgrade the shell. R21 is basically 1/2 of best practice.

For $10k, you could/should do 4 inches of exterior foam sheathing. That would have some ROI. Certainly the first 2 inches are a no brainer.

We will be heating with natural gas.

Excellent information by lzerarc above re bridging and sealing and batts vs. blown.

What would be helpful is knowing how many heating degree days (HDD) in your location. The statewide Minnesotaaverage for 2006 was 7,334; some parts of the state had considerably more heating days.

IN that case, sub-slab insulation may be useful, as indicated by this energy modelling in a similar climate :

"3,000 SF house in Portland, Maine. 7,300 HDD. R-30 or so walls, R-50 code roof, R-20 basement walls, 1.0 ACH50 proposed leakage. Modeled in PHPP.

Slab R-1: 86,500 kBTU / year losses.
Slab R-10: 12,580 kBTU / year losses.
Slab R-20: 8,473 kBTU / year losses.

This assumes an interior basement temp of 68, which is higher than most people run in our area if only used for storage, which will magnify the losses. If I turn the house temp down to 55 degrees in the model instead of 68 the slab losses are as follows:

Slab R-1: 27,260 kBTU / year losses.
Slab R-10: 4,000 kBTU / year losses.
Slab R-20: 2,670 kBTU / year losses.

Those are big numbers for the uninsulated slabs with fuel oil at 140 kBTU / gallon and natural gas at 100 kBTU / CCF...

Jesse Thompson
Kaplan Thompson Architects
http://www.kaplanthompson.com/
Portland, ME" *

All these energy related questions would have been best ironed out and decided on with an independent energy consultant before contracting with a builder.

Hmm I am not technical at all but we finished our basement in Maryland and have carpet, laminate click, and tile flooring without any additional floor insulation. We have lots of vents and returns as recommended by the HVAC company. The basement is comfortable all year round, it is the best part of the house temperature wise. So much that in planning a first floor sunroom addition I want to add basement space as well so that I can have a separate office down there (my husband has pretty much taken over our "joint" office). However, our temperatures probably are significantly less extreme than Minnesota.

Have you considered geothermal heating (ground sourced heat pump). We did and are very happy with it. (zone 5) We got Econar which is made in Minn.