Financial Viability of Energy Efficiency Measures for Single-Family Houses in Three Urban Areas of Europe

Abstract

The financial viability of energy efficiency measures for single-family houses in three urban areas of Europe, each having different climatic conditions, building codes and energy prices, were investigated in this paper. Athens, Copenhagen and Stuttgart were selected for the purpose of the task. The energy efficiency measures are: upgrading of building thermal insulation and air-tightness, use of energy efficient windows instead of standard windows and installation of a mechanical ventilation heat recovery (MVHR) system. Present building codes, energy prices and economic parameters were incorporated in a computer code with hourly weather data of the selected locations. The level of financial viability for the specific energy efficiency measures is assessed through the net present value (NPV), the savings to investment ratio (SIR) and the payback period for the incremental costs. The existing building codes in Copenhagen are very strict and the single-family house, upgraded to passive house levels, could gain modest financial savings only in case of gas or oil heating. The price of district heat and its annual inflation rate are relatively low, thus no energy improvements with positive financial balance are possible. In Stuttgart, where the single-family house complies to less severe building codes, basic energy efficiency measures present more attractive SIR values and shorter payback periods, especially in case of oilheated houses. Advanced upgrades, such as a 90% efficient MVHR system combined with passive house thermal insulation and air-tightness, are financially viable only in oil-heated houses and in case of a 10% oil price inflation rate. In this case, the corresponding incremental cost of about 26 000 € is repaid through energy savings after 22 years, yet the payback period and the overall financial viability of the energy efficiency measures depend largely on future energy price. Codes for the energy performance of building are lenient in Athens, therefore both basic and advanced energy efficiency upgrades are financially positive, even for a wide range of values of costs of capital and energy prices inflation rates. In Greece, the present oil price (0.127 €/kWh) is nearly equal to the price of electricity (0.13 €/kWh), thus an effective cash saving action would be the installation of an air-to-water heat pump instead of a common oil boiler.