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Hi all, just to follow up with an answer, in case anyone faces the same questions in the future, hopefully it can help someone out. I will post the approach I decided to take in answering the initial question.
The question was: when simulating a below-grade building, do I need to account for the heat transfer through the ground, as well the below ground temperature. Or just one of the items.
As suggested by Denis on the forum, I also believe that the simulation should either account for the below ground temperature data, or the ground resistance adjustment - but not both methods. Contacting IES for clarity they stated that both should be used, however I believe that is incorrect.
I decided for my analysis to NOT account for the ground resistance, as I already had the ground temperature data. So I treated the below-grade walls as regular walls and calculated the U-values, then ran the simulation testing out different U-values and their impact on the overall energy.
One thing to note, several codes (such as IeCC) state that in hot climates, such as climate zones 1 and 2, do not need insulation for below-grade wall structures, and simulation results agree with that statement. The results showed than insulating below grade walls in my case, when the ground/soil temperature is 26degrees, the energy impact will be quite small. When running a test to see the effects when the ground temperature is significantly colder, the energy impacts were drastic, which obviously makes a lot of sense, as the delta T between indoor and outdoor temperatures is much greater. Which again is in line with code requirements, of not needing to insulate in hotter climate zones.
Now, when the other approach was followed, and both the ground resistance and the ground temperature data were accounted for in the simulation, the cold soil temperatures had minimal effects on the overall energy, due to the ground resistance improving the U-values.
So from the results, building codes, and the reasons mentioned, I believe you only account for one of the methods, not both. Hope I was able to explain that clearly.
Please feel free to contact me if any further clarity is needed on the analysis.