The standard Backyard Pod comes with Permastop fibreglass insulation for the roof and sarking (flexible insulative lining) for the external walls. For exempt Backyard Pods, not being occupied for significant periods, this amount of insulation would be sufficient.

Approved Backyard Pods will have their energy-efficiency rating requirements noted in the plans for you (as the DIY builder) or your builder to comply with. Projects in bushfire-zone areas will also have insulation requirements. These are matters to be resolved in the construction process.