In this study, insulation thickness has been optimized by using exergy method and life-cycle cost concept for the case of using different lignites and natural gas separately. As a result, combustion parameters such as excess air, stack gas temperature, and combustion chamber parameters are much more effective on optimum insulation thickness. But fuel types, depending on its carbon and moisture content, are designative parameters on optimum insulation. The optimum insulation values are varied between 0.291 m and 0.1352 depending on the fuel types, wall types, and combustion parameters.