Thongs melt into the bitumen, the toilet can feel like a sauna and boiling water bubbles to the earth's surface.

Welcome to the outback Queensland town of Birdsville, on the edge of the Simpson Desert, where temperatures soar to nearly 50C in summer and plummet to below freezing in winter.

This is a land of extremes that produces power bills to match. The average three-bedroom house haemorrhages more than $2000 a quarter on power to warm and cool its inhabitants.

Baker Dusty Miller's bill peaked at $8000 last summer when the mercury sat above 40 degrees for 29 consecutive days and soared to a record 49 degrees one day.

Birdsville's recent heatwave caught the attention of global insulation manufacturer Knauf Insulation.

The company has spent more than two weeks this month, and $350,000, insulating every building in the town, including the famous Birdsville pub.

It trucked in enough insulation to cover a football field and with professional supervision, residents helped pack their ceilings and floors with EarthWool - fibres of glass produced to have the same texture as wool.

Birdsville can now lay claim to not only being one of Australia's most isolated towns but also its most insulated.

The project also has a broader goal to help restore confidence in the do-it-yourself insulation industry after the fallout from the Rudd government's 2008 botched home insulation scheme, which led to four deaths and hundreds of house fires.

Knauf Insulation Australia and New Zealand managing director Stuart Dunbar says the industry has been struggling ever since and there's a general misconception that all insulation products are unsafe.

A group of companies are now suing the federal government in a bid to recover millions of dollars they lost when the scheme was canned.

Knauf is also preparing its own legal action and Opposition Leader Tony Abbott has made an election promise to launch a judicial inquiry into the debacle.

In the meantime, Mr Dunbar hopes the Birdsville project will let the public know there are safe insulation products such as EarthWool, which is fire-proof, doesn't conduct electricity and is soft to handle.

He said floor insulation will particularly make a big difference to Birdsville's 76-odd residents.

"People hose underneath their houses to stop the radiant heat from rising," he said.

"The insulation will keep the heat out during summer and the heat in during winter."

This means airconditioning and heating won't need to be used all day long, drastically lowering residents' energy consumption.