Hello,
I am looking for advice on “layers” and materials for insulating my shed as I electrify and convert it to a workspace. This is a small 16′ x 12′ structure in the near Seattle, Washington in the Pacific Northwest, building zone 4.

The walls use a siding+sheathing in one product, LP SmartSide, and it was not wrapped wit Tyvek between sheathing and framing during construction.

I’ve been told that putting fiberglass insulation up against the raw siding could wick moisture in and not to use that material. Someone suggested cutting 2″ R10 XPS foam insulation and either friction fitting with GapoTape (is there a similar product in the U.S.A.?) into the stud bays, or purposely leaving a 1/2″ gap on all sides and filling that with spray foam would be the way to go.

I’m wondering: 1) would it be advantageous to line it from the back with Tyvek? I’d have to wrap it around each stud, which would place both studs and the siding outside the barrier. Or will the XPS be enough of a moisture barrier? And 2) should I place the foam directly against the siding (or Tyvek if used) leaving an air gap between the foam and sheetrock, or have the foam flush with the sheetrock, leaving an airgap between the foam and siding? I’m thinking there would be an 1 1/2″ airgap between foam and either siding or sheetrock depending, unless I fill most of that with another layer of foam like 1″ R5. 

Although it’s “just a shed” the intention is to have a mini-split with heating and cooling and to create a nice work environment in both winter and summer.

The photo shows the construction. The overhead “shelf” has been removed.

Thank you