Analysis of financial benefits for energy retrofits of owner-occupied single-family houses in Germany

Abstract

In many industrialized countries, a significant number of buildings were constructed prior to any energy-related building construction standards. Today, single-family houses (SFH/pl. SFHs) from this time still have a comparably poor thermal quality. This paper aims to examine and model the incentive effects of the German energy retrofit funding schemes for owners of SFHs constructed shortly before the introduction of the first German thermal insulation ordinance in 1979. We develop a novel mixed-integer economic optimization model that determines the financially optimal energy retrofit configuration for owner-occupied SFHs. In a case study, we consider German framework conditions such as governmental incentives, standards, regulations, retrofit costs, and energy prices. We calculate economic burdens and benefits in 48 different retrofit scenarios for two representative SFHs constructed in the 1960s and 1970s. In the majority of cases, the return on investment is positive. For heating system retrofits, energy savings are comparatively small, but the cost-benefit ratios of retrofits are better than for measures on the building envelope. Overall, we find retrofits to decrease operational costs to between 15% and 62% of the initial value. The financial incentive effect of the German funding instruments can lead to financially optimal savings of CO2 emissions in the range of 82–94%, however our findings show that the conditions of the German funding programs are not designed to maximize CO2 savings per funded euro. We show that the funding invested to reduce the annual tons of CO2 ranges from 493 € to 3747 € in our case study.