Reducing carbon emission and energy consumption in buildings is becoming an important priority on global level. Buildings consume significant amount of energy for heating or air-conditioning in most countries. The drive to enhance the understanding of building insulation and its effect on energy use, is critical for improving public engagement to achieve reduce carbon emission towards more sustainable future. This paper presents the design and the development an educational and research simulation tool to study and understand the thermal performance and energy efficiency of buildings. The novel design includes small-scale multi-layered model of buildings where insulation layers can be added to or removed from the building model in a modular and interchangeable manner to allow changes to the thermal performance. The results show that this novel model will provide a new educational tool to enhance the understanding of energy consumption and insulation in buildings. The design can be used to engage the young generation regarding building insulation and energy efficiency. It also could provide an advanced research and teaching tool for energy in buildings, instrumentation and infrared thermography.