Affordability Assessment of Energy-Efficient Building Construction in Italy

Abstract

This research tries to investigate, in the current condition of the Italian real estate market, the economic advantage of investing in energy retrofitting of existing buildings or in expenditure aimed at obtaining higher energy performances in the construction phase of new buildings. A cost-benefit analysis is developed referring to the construction industry entrepreneur. Firstly, the increase in value due to a different measurement of the energy performance of new buildings or newly redeveloped residential buildings is achieved through an innovative statistical approach. Energy performance is measured by taking as a reference the category of energy certification, as required by European legislation. In the estimate of the contribution, the measurement of energy performance, expressed on an ordinal scale, is treated as a categorical variable in the implementation of an iterative regression model, called the alternating least squares model. Afterwards, this contribution is compared to the cost of sustainable building, trying to define a percentage increase in cost compared to a minimum condition according to different and increasing levels of energy performance. In the developed case studies, the comparison between likely benefits and investment spending showed that the entrepreneur would have no convenience at an expense for energy retrofitting while obtaining a positive balance in the construction phase of new buildings. The financial advantage grows if the investment is aimed at achieving the best energy performance and in areas where the price level of the real estate market is lower. The finding can be used as a guide for construction industry investors to make decisions in energy-efficient residential buildings production or transformation.