Hello HeyPally:
The method you have proposed would probably work. However, it seems very labor intensive in comparison and I would still use the heat tape, it won't use any eletricity unless the temperature drops below 36*.
Your are indicating that you will insulate the pipe from the indoor heat as well as the outdoor cold. Whichever way you choose to insulate the pipe, a heat tape will be the only 'trouble free' way to go.
Glenn
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