The best thing to do is to remove window air conditioners for the heating season. That way you can do a good job of sealing the window to keep heat in and cold out. But, if you choose to leave that heavy monster in the window, it will waste money on your heating bill unless you cover it.
Window air conditioners are designed to help ventilate your house with some outdoor air. The solid parts of the machine housing are made of metal that transfers heat very well. That means they do a poor job of blocking the flow of expensive heat out of your home.
Most folks think that air conditioner covers are intended to protect the outdoor parts of the machine from harsh winter weather. Actually, air conditioners are made to endure the weather. A cover on the outside of an air conditioner does look nicer and it keeps the paint from fading over the winter.
The real money savings is blocking the cold wind from blowing into the house. To do that the outdoor air conditioner cover needs to completely cover the unit and seal to the house.
I suggest using something like packaging tape to seal all the edges of the cover to the house. Looks doesn’t count for energy savings. You want some kind of tape that will seal well but peel off, in the spring, without damaging the house.
An outdoor AC cover needs to be a wind barrier only.
Save the insulation for indoors where it can block the escape of heat. A cover for the indoor part of a window air conditioner needs to both block air movement and insulate.
Think of an indoor air conditioner cover as a quilt to keep the warm comfort inside your home. There are store bought indoor air conditioner covers available to do the job.
You can make your own so it matches the décor of the room. An ideal indoor AC cover would have these features:
1. Air tight layer facing outdoors to seal the cold air out
2. Good thermal insulation to slow the escape of heat
3. A reflective foil layer to reflect heat back into the room
4. Pleasing appearance in the room
I have seen some foil bubble wrap packaging material that is intended to protect items in shipment form temperature changes.
They would make a great indoor air conditioner cover with the addition of decorator fabric on the room side.
To be most effective, an indoor air conditioner cover needs to be sealed around the edges to complete the weather seal.