Waste management in Lagos State is an unrelenting issue as the population increases exponentially per annum; there is a constant struggle with organization, transportation, and disposal of the daily waste generated per capita within the city. Of the waste generated in households in Lagos, plastic makes up a large percent of the non-organic waste found in dwellings. Waste from residences often end up pooling by the street side, and recycling is slow in gaining traction within the city. In addition, tropical cities like Lagos use HVAC systems to deal with high temperatures; this gives rise to high energy consumption in dwellings and offices alike. This is noteworthy because high energy consumption usually translates to energy expenses and in this city, with a population of 22 million, about 8.5% live in poverty with the middle-income earners toeing the line. Although a passive strategy like the use of thermal mass in buildings could improve energy efficiency, it is deemed more effective in regions with a significant difference in diurnal temperatures (>10°C). In Lagos state, however, there is no such significant range in temperatures. This served as the motivation for the inclusion of another strategy to support what is already existing – thermal insulation. This study explored the impact of thermal insulation made from plastic waste on energy savings and energy costs with the aid of DesignBuilder used to model dwellings with the climatic conditions of Lagos state. The focus of this study was on middle-class citizens in Lagos State and a survey was conducted using an online tool called Survicate, to assess their perception of the use of plastic waste on their facade. From the data, it was deduced that there is a possibility that people are willing to use plastic waste as thermal insulation when they are aware of the reduction of energy costs. For this study, five variations of thermal insulation were constructed, and experiments were carried out with the use of a hotbox to determine the thermal conductivity of these samples. The first sample was made from PET bottles with its cavity filled with textile waste; the second sample, a mould created from melted PET plastic that had been cut into tiny bits; the third variant was constructed from PET bottles with its cavity filled with water sachets (LDPE); the fourth sample, was built from crushed PET bottles and water sachets; and the last sample was made from empty PET bottles stacked on top of one another. The test sample with the least capability produced an expense reduction of N774.36/m2.year (€1.94/m2.year), while the best performing had a cost reduction of N1100.57/m2.year (€2.75/m2.year). Regardless of which insulation sample is applied, there would be savings in energy consumption, the cooling load demand of RAC (residential air-conditioning) systems would also decline, and there would be monetary savings as well. Resulting from the study’s outcome, it was recommended that a physical model be built in Lagos State to be studied further to see how well the materials perform under the actual climatic conditions in Lagos.